Livin’ the Mexican dream

SITE VISIT

La Luz, Mexico — It was another gruelling day as a geologist for Pierre O’Dowd, vice-president exploration for Normabec Mining Resources, (NMB-T, NBEMF-O) and he was seriously considering calling it quits.

Out of water and overcome by heat, the rugged mountain terrain of San Luis Potosi state, Mexico, had gotten the best of O’Dowd as a property owner took him on a wild goose chase for a non-existent silver vein.

This type of day was nothing new for O’Dowd, who has spent much of his 25-year geology career looking for minerals in South America, Canada, China and Africa. But when he found himself frustrated and alone on the side of a mountain while the rest of the group went on, he began to contemplate his future.

The next day, O’Dowd demanded a horse, and set off with a guide in search of another vein. Although what he found that day was insignificant, the tranquility of the horseback ride through the vast wilderness of the Sierra Madre calmed and motivated him to continue his search for a Mexican property.

“The whole point of me going into geology was about being free, travelling, seeing new things, places and people, and not being confined to a desk job,” O’Dowd says.

That experience was just a few months before he was shown what he calls a “geologist’s dream” — the Real de Catorce property in San Luis Potosi, which Normabec acquired in 2006.

Accessible by road, O’Dowd’s first visit to Real de Catorce was far less taxing. Beyond that, he was immediately impressed with the 44-sq.-km property — a former world-class silver district that has never been explored with modern technology.

Real de Catorce came with a historic resource of 533,000 tonnes grading 275 grams silver per tonne, as well as about 2 million tonnes of tailings with grades between 60 and 100 grams silver per tonne. The majority of the resource comes from the Santa Ana mine, which hosts the Veta Madre vein, and was the most recent mine in production. A small percentage is based on the San Augustin and Candelarina mines.

A year and half after the property’s discovery, official numbers are on the way — a National Instrument 43-101 resource is due soon, along with a prefeasibility study that will evaluate the project’s open-pit potential, as well as metallurgy, mine and mill design.

O’Dowd says his goal is to build the resource to 20 million tonnes before making a production decision.

An underground sampling program earlier this year showed some positive results — 100 samples taken every 2 metres from Veta Madre averaged 310 grams silver per tonne, 40 samples from the Anden vein averaged 200 grams, while another 21 samples from another portion of the same vein averaged 1,037 grams.

Samples taken from the exposed vein on surface averaged 200 grams silver per tonne over 535 metres, an area where 2,000 metres of drilling will take place as a part of an 11,000-metre program launched in July.

First, Normabec is drilling 3,000 metres from surface along the southeastern extension of Veta Madre that will intersect 6,000 metres of drilling done in a fan pattern from underground.

“Veta Madre been partially mined out by the old guys who took the richest portions,” O’Dowd says. “We want to see if the whole vein is mineralized.”

Previous miners lost track of the Veta Madre at a flection point where the vein changes direction. A junior company discovered the continuation of the vein in 1997.

Most mining on the property stopped where the water table started, so the company is optimistic about finding more mineralization at depth.

Silver mineralization was first discovered here in 1772 and 40,000 miners soon covered the hillsides of Real de Catorce. Stone chapels and homes sprung up atop every exposed vein.

The evidence of that silver rush remains. The village of La Luz, where the mining office and several mine entrances are located, is inhabited by about 200 people who’ve made homes of the stone ruins.

The nearby town, Real de Catorce, has become a haven for tourists and historians — the cobblestone roads and stone buildings are relics of a time when the area was the third largest silver producer in all of Mexico.

More than half of the silver that has come from Real de Catorce was extracted between 1773 and 1776 with a total of 230 million oz. produced up until 1990 at an average grade of 1,350 grams silver per tonne.

Since the first major boom, mining has been sporadic with economics and politics each playing their part in the upswings and downswings of mining.

Real production

Restauradora de las Minas de Catorce, which holds a 3% net smelter return royalty on the project as the property vendor, was the last company to produce silver from Real de Catorce. Restauradora stopped mining in 1990, when workers went on strike — Restauradora was feeling the pinch of low silver prices and its employees were demanding better equipment.

Much of what the company mined was old fill left in the stopes that graded about 500 grams silver per tonne.

With hundreds of years of mining activity and all the high-grade stuff gone, some might think Real de Catorce has had its day.

Not so, O’Dowd says.

“Back in the 18th and 19th centuries, they were mining for kilograms per tonne — we’re looking for 200 grams,” he says.

Before the drill program, Normabec had spent about $400,000 on the property. For the next year, the company has about $4 million budgeted.

O’Dowd — who talks minerals, metallurgy and mining from morning to night — has his sights set on more than Veta Madre.

Although he complains of getting little sleep, on a tour of the property, his swift pace never slows as he races about from vein to vein along the steep, arduous landscape that climbs 3,100 metres above sea level.

The Purisima chute was one of the first ore chutes in the district in the 18th century and also the largest. It was never mined below the water table.

The San Augustin vein, which is sub-parallel to Veta Madre, had some of the highest grades in the past and though the vein is narrow in comparison, silver production was similar to Veta Madre.

The stone frame of an old building with arched windows makes the San Augustin fault easy to find.

“As usual, they built a church right on it,” O’Dowd says.

The church won’t be in the way though — most of the drilling will need to be done from underground anyway, because of the angle of the vein.

Normabec has discovered about seven new veins between the Veta Madre and San Augustin alone, and about 20 in total. But further exploration will have to wait until next year.

“We need a lot of money and a lot of people to cover all the favourable ground,” O’Dowd says.

That’s not a complaint, but a challenge that keeps O’Dowd and Normabec going.