Global Minerals seeks silver in historic Slovakian mine

A common story heard in many of the former communist countries of Eastern Europe is the one about an historic, state-run mine that fell into disrepair after freedom blossomed in the 1990s.

Explorers like Vancouver-based Global Minerals (CTG-V) are now looking at these historic mining jurisdictions as opportunities, where existing infrastructure and exploration records can offer capital savings and an opportunity to kick-start operations.

Global has targeted an area in eastern Slovakia that has a mining history dating back to at least the Middle Ages. Just outside the small town of Roznava lies the now-defunct Maria iron ore operation that was run by the Czechoslovakian government from the end of the Second World War through the mid-1990s.

But according to Global CEO Bill Pincus, the iron potential isn’t what first attracted the company.

“The principle mineral that they were mining was siderite, which is iron carbon,” Pincus explains during an interview. “The main mineralogy is a quartz-siderite-tetrahedrite. It’s the tetrahedrite that carries the copper, gold and silver. Going back to the regional political period, steel is what they were making and they needed the iron ore. There are some sketchy records of a bit of copper-silver extraction, but it was basically just iron mining.”

Underground iron-ore extraction focused almost exclusively on a main vein called Maria, though later in the mine’s life a number of exploration initiatives were undertaken that resulted in discovering Global’s main target: the Strieborna vein.

Located 500 metres from Maria, the Strieborna deposit carries a measured and indicated resource of 1.9 million tonnes grading 232 grams silver per tonne, 1.1% copper and 0.7% antimony for 14.3 million contained oz. silver, 48 million contained lb. copper and 29 million contained lb. antimony.

“What they did as part of an exploration program is follow an exploration drift perpendicular to Maria, and intersected a number of other veins, including Strieborna,” Pincus comments. “They recognized a greater concentration of tetrahedrite, and so it was explored through the 1990s underground. There is something like 3,000 metres of footwall drift on this deposit, and they even test mined around 30,000 tonnes before low prices at the time forced a shutdown.”

Historic operations have left Global with a bevy of infrastructure opportunities, including on-site offices, access to power and water, 3 km of underground development and a 1.6-km haulage tunnel.

Nearby Roznava also has a rich mining history, and Pincus says the community radiates optimism about the region’s return to mining, with turbulence from the eurozone crisis triggering a spike in unemployment.

“It’s really turned out to be gratifying in regards to the local economy, and there are a lot of skilled contractors, good underground drillers and miners,” he explains. “We’re dealing with knowledgeable regulators on-site that understand underground operations. We’re going to find out in regards to permitting — it is the European Union, and there are established standards and norms that have to be met. Having said that, no one has permitted a metal mine recently, so that’s another issue.”

A separate issue involves draining the underground infrastructure and tunnel systems, which were flooded following the mine’s closure. The company has relied on surface drilling and historic data at Strieborna but is closing in on a 200-metre-deep drainage target that would allow it to enter Maria’s sixth level, and provide underground access to Strieborna through an available crosscut.

“Our intention is to start with bulk sampling and re-establish underground drill stations as we refurbish the mine, eventually aiming for reserve upgrading and reserve extension,” Pincus says. “There’s quite a bit of infrastructure on surface. We rehabilitated and installed some industrial towers so we have power. The hoisting mechanism is being refurbished and we’ll bring in underground power, water and air as we move down through the two shafts.”

Global is targeting a preliminary economic assessment on its existing deposit by year-end, with dewatering and mine rehabilitation expected to wrap up by the third quarter.

The company may have to deal with metallurgical concerns regarding its antimony content. Though conventional, low-cost flotation processes have demonstrated 96% silver and 97% copper recoveries, carrying antimony in a concentrate results in profit-denting smelter penalties.

Global is contemplating a more costly hydrometallurgical process that would allow it to strip the antimony and produce a separate saleable metal, though Pincus speculates the company could develop favourable economics on the deposit even with a smelter penalty for antimony.

Though the historic infrastructure and existing resource were a major draw, Global is also optimistic about regional exploration potential, with much of the surrounding area being greenfield and featuring intriguing geophysical anomalies.

“There is just some incredible exploration potential,” Pincus says. “The geologic model that really drew us to the property was the comparison to the mineralogy at the Sunshine silver mine in Idaho.”

Global believes there is resource potential in the Maria I and Maria II veins, which lie adjacent to the historic mining area. The company holds 135 sq. km surrounding the Strieborna project, with documented exploration by Slovakian authorities recording 90 separate vein occurrences. Global also found gold mineralization during surface exploration, including 18 grams gold per tonne during grab and dump sampling at its Cucma target.

“Though there is no historical record of gold production, we’ve found some high grades during grab-sample campaigns,” Pincus comments. “My strong suspicion is that there was gold mining in the region that just wasn’t recorded. We have some surface targets but it’s pretty wide open, and we’ll be focusing on underground exploration initially.”

Global remains cashed-up with  US$12 million at presstime. The company believes it should be financially solid through production, and maintains 111 million shares outstanding with a $37-million market capitalization.

“We think we have enough money to make it into production and look at project-type financing, whether that be through equity placements, debt financing or potential royalty or metal streams,” Pincus concludes.