The last few months have been particularly brutal for the junior mining sector. The TSX-Venture composite has declined from 629 on July 31st to a low of 511 earlier this week, a decline of nearly 20% over the span of three months. Positive company news releases have been used as liquidity events that traders have used to sell into, and overall trading volumes across the sector have continued to trend lower.

One of the companies that has suffered a sharp decline in the last few months is Eloro Resources (TSX:ELO, OTC: ELRRF). Since August 29th, Eloro shares are down ~50%. The reason for the sharp decline is multi-faceted, but largely has to do with what investors viewed as a disappointing maiden resource estimate (MRE) for the company’s flagship Iska Iska Project in Bolivia.

The day after the MRE release I spoke with Eloro CEO Tom Larsen. With Eloro recently providing an update on the ongoing 5,000 meter metallurgica/definition drilling program, I felt it was time for another update conversation with Tom.

This is a sponsored post on behalf of Eloro Resources Ltd.


The last couple of years have not been kind to the junior mining sector. In fact, the TSX-Venture Composite is down to 2015 levels:

TSX-Venture Composite (Monthly - Ten Year)

Eloro has been sold down much more aggressively since early September. ELO shares are down roughly 50%. What is your take on the share price decline? And what would you say to investors here in November, as we enter tax loss selling season?

Tom Larsen:

Since August 30th (my birthday by the way) when the highlights of the maiden 43-101 compliant mineral resource estimate press release was made public, Eloro's share price has been pummeled. However, currently the oversold condition seems to be losing its bite.

We delivered an enormous silver/polymetallic resource "670 million tonnes containing 1.15 billion in-situ Ounces Silver Equivalent". Iska Iska is probably in the top 3 largest deposits discovered to date in Bolivia, you can ask Dr Osvaldo Arce, deemed as one of the most prominent Bolivian Geologists that Bolivia has produced.

It was a mistake to put a timeline on the MRE release when the metallurgical testing was a time consuming process. I take responsibility for that and I will not make that mistake again.  Then there were complaints that the grade was too low, and I believe that some people totally misread this and we will demonstrate why the grade is not too low. The fact that Micon International geological engineering is the author of the report and to keep the exchange happy, had to report with NSR initially confusing many investors.

The share price decline is the result of an overstretched and restless junior resource sector. This sector has been underperforming dating back to early 2022 when Treasury yields began lifting higher. There have also been some resource funds in need of liquidity and I believe we have seen some leveraged participants that were forced to sell when ELO broke below $2.00.

Eloro Resources (Daily)

In addition, I believe there is some skepticism of XRT oresorting from those that do not know about the recent advancements of this technology. In addition, our XRT oresorting work is being overseen by one of the top metallurgists globally, Mike Hallewell.

The good news is that Eloro is now in the enviable position of being able to prove the naysayers wrong. Iska Iska is set to demonstrate operating costs in the lowest quartile, benefitting from a 1 to 1 stripping ratio in the starter open pit bulk tonnage deposit. The upper 130 to 140 million tonnes has a 3km strike length and a $35 NSR value with a $9.20 operating cost per tonne. The net asset value (NAV) is not hard to figure out although management cannot state the obvious until PEA is produced. We will also be demonstrating how XRT oresorting benefits the project, and above industry average recoveries due to the nature of stockworks where the metal values are mainly located. In addition, the mineralized host rocks are conducive to both met recoveries and bulk scale XRT ore sorting. All of this results in lowering operating costs!


I think the NSR presentation in the MRE definitely confused some people. And obviously, the delays didn’t help. But we’re here now and you have to look forward and communicate with shareholders the best you can now.

Last week, Eloro announced that it completed drilling 3 metallurgical holes, two in the higher-grade Polymetallic (Ag-Zn-Pb) Domain Type and one in the higher-grade Tin (Sn-Ag-Pb) Domain Type. Usually when investors hear "metallurgy" their eyes roll back in their head. However, a smart junior mining CEO once told me "in mining, grade is king but metallurgy is God" - why is metallurgy so important and how will the metallurgical test work on these 3 holes help to guide Eloro going forward?

Tom Larsen:

Three PQ sized metallurgical holes were completed, two in the higher-grade polymetallic(Ag-Zn-Pb) Domain Type and one in the higher-grade Tin(Sn-Ag-Pb) Domain type. In addition, 10 tonnes from 657.9 meters of drill core was shipped to Wardell Armstrong Intl in Cornwall, England for crushing sizing and then +9.5mm crushed product is now being sent to TOMRA GmbH based in Wedel, Germany for cascade "ore -sorting" tests..

All of this is taking place under the supervision of Mike Hallewell, a highly regarded International Tin metallurgist that lives in Cornwall, England. Mike also oversees Mick Davis of Cornish metals and the South Crofty Tin metallurgy. Suffice to say, Eloro is in capable hands. The point of this exacting work is to produce the most efficient recoveries that we can and any waste separation techniques that would assist in optimizing eventual NSR or gross profit on our large scale bulk tonnage operation which will be in the PEA.

We have the advantage of the 1 to 1 stripping ratio for low mining costs..this is the point that lower grade material can be very profitable with low opex numbers..look at the large scale copper porphyry systems in Chile or Peru that make substantial profits with .5% or .6% per tonne copper grades on large daily throughput..another case in point is Filo Mining and the Filo Del Sol deposit that has those similarities...Iska Iska at this early stage is demonstrating higher potential NAV per tonne of rock than most of these giants. I believe that the PEA will demonstrate this more convincingly.


Eloro also announced that definition drilling is in progress to expand the shallow higher-grade mineral resource in preparation for the PEA. I have heard you say that this drilling could actually increase the average grade of this domain (inferred mineral resource of 132 million tonnes at 1.11% Zn, 0.50% Pb and 24.3 g Ag/t) - please explain what makes you confident of higher grades in this area?

Tom Larsen:

We have selected infill drilling averaging 50 meter spacing that are closer to the previous higher grade intercepts that made up some of the 130 million tonne higher grade starter pit. It would stand to reason that these higher zones of metal value would add to the higher grade averages contributing to a higher overall grade within the 130 to 140 million tonnes. Total volume should increase marginally but we are only doing a 4,000 meter infill program which should be finished in the next two weeks. This limited drilling campaign should demonstrate faster payback with higher NSR for the starter pit. We can then decide when to continue to infill after initial results.


One of the more intriguing aspects of the Iska Iska project has been the prospect for a buried tin porphyry (slide 22 of presentation). In fact, Eloro intersected 0.17% Sn over 52.75 meters in reconnaissance drilling at Casiterita 2 km southwest of the Santa Barbara deposit. What are the plans for following up on this extensive magnetic intrusive body located immediately southwest of Iska Iska?

Tom Larsen:

The Iska Iska giant discovery is turning into a two domain mining operation. The one, being the silver Lead Zinc Polymetallic open pit deposit that the PEA is focused on. And then next step, the enhancement of this study by increasing more tonnage within the deeper mineralized envelope to show a 50 year mine life, there is potentially a 250 to 300 million tonne deposit within this domain.

Secondly, the drilling campaign that will be needed to drill out the tin & silver domain adjacent to the first PEA model with similar bulk tonnage characteristics and further down the valley continued work on developing La Casiterita.

The second PEA will be more focused on potentially showing one of the largest bulk tonnage tin by-product silver deposits worldwide. We have to proceed one step at a time as Iska Iska is a giant with a multi-metal assemblage, therefore, more step by step detail must be expected in order to bring forth unlimited potential upside.

Eloro insiders have purchased more than 20,000 shares on the open market in the last two weeks


Eloro has an impressive set of advisors, including Peter Marrone and Quinton Hennigh. What have some of your recent discussions with them been focused on? In particular, Peter Marrone joined to help Eloro with M&A strategy. How has the share price decline affected long term strategy, if at all?

Tom Larsen:

What I can say was that Peter Marrone's major comment about the MRE was that having a 1 to 1 stripping ratio for an initial lower grade open pit bulk tonnage operation with a 3 to 4 kilometer strike length is very impressive. Both Quinton and Peter are extremely supportive and both realize that obtaining a higher NAV number will be attainable, which will translate into a higher share price.These values and numbers will become more clear upon reaching the PEA stage.


Thank you, Tom. This was a good update conversation and I look forward to seeing the results of the metallurgical/definition drilling program.  The maiden PEA at Iska Iska will be an important milestone for the company, and shareholders. 

Disclosure: Author has been compensated for marketing services by Eloro Resources Ltd.

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