Northern Andes Snapshot: Eight active juniors

The northern Andean countries of Colombia, Ecuador and Peru are fertile ground for mineral explorers and mine developers, with their rich mineral bounty, underexplored terrain and pro-mining cultures. What follows are eight Canadian juniors with active exploration and mining programs in the region.

ATICO MINING

Vancouver-based Atico Mining (TSXV: ATY; US-OTC: ATCMF) is operating its 90% owned El Roble copper-gold-silver mine in Colombia, 145 km by road southwest of Medellin.

Atico describes the asset as the only copper-gold volcanogenic massive sulphide (VMS) deposit in production in the country. The underground mine has been in production for over 30 years, and had at last count 1.87 million tonnes of measured and indicated resources grading 3.46% copper, 2.27 grams gold per tonne and 8.87 grams silver per tonne. The deposit remains open along strike and at depth.

With Atico as operator, El Roble has been scaled up and upgraded to run at a rate of 800 tonnes per day, and produce copper concentrate with gold and silver credits. During the second quarter of 2017, Atico produced 5.15 million lb. copper and 2,570 oz. gold in concentrate, up slightly from the first quarter.

There is further exploration potential within the El Roble mining district, where the company has found a favourable 10 km contact that may host more VMS bodies.

Atico has a broader goal to grow its copper business by acquiring advanced exploration assets or small mines with exploration potential in Colombia, Peru and northern Chile.
The company had 98.2 million shares outstanding for an $84-million market capitalization at press time.

AURANIA RESOURCES

Toronto-based Aurania Resources (TSXV: ARU; US-OTC: AUIAF) is best known as being the new gold exploration vehicle for Keith Barron, who cofounded Aurelian Resources, which went on to discover the world-class Fruta del Norte gold deposit in Ecuador, now being built into a mine by Lundin Gold.

Aurania is seeking gold at its Lost Cities project in southeastern Ecuador in the Cordillera del Cutucu region, which is contiguous with the Cordillera del Condor. The Cutucu forms part of the Northern Andean Jurassic metallogenic belt, which contains clusters of porphyry copper, gold-copper skarn and epithermal gold deposits.

In August, Aurania began a helicopter-borne geophysical survey of its Lost Cities property to target potential epithermal gold and porphyry copper mineralization. The survey will include 12,000 line km flown at a terrain clearance of 80 metres in east- to west-orientated parallel lines spaced at 400-metre intervals.

Veteran gold explorer Richard Spencer joined Aurania as president in May. In past decades he worked for Gencor and Iamgold in Ecuador, as well as for Crystallex International in Venezuela. He will continue as president and CEO of uranium junior U3O8, which is exploring in Argentina, Colombia and Guyana.

BEAR CREEK MINING

Bear Creek Mining (TSXV: BCM; US-OTC: BCEKF) is exploring and developing silver assets in southern Peru.

The Vancouver-based junior describes its flagship Corani project east of Cusco as “one of the largest undeveloped silver deposits in the world, and stands alone by virtue of its substantial base metal credits, location in a mining-friendly jurisdiction and overwhelming community support.”

According to an updated feasibility study, Corani could produce over 8 million oz. silver plus lead and zinc credits annually over an 18-year mine life.

Bear Creek notes the project is highly leveraged to metal prices, with the net present value rising US$120 million for every US$1 gain in the silver price, with proportional changes in lead and zinc prices.

The company says it has the financial strength to fund Corani through to a development decision, which could come before year-end.

It has only put two press releases on its website in 2017, one in February about granting stock options, and a second in May to state that it had signed an agreement with Peru’s Ministry of Energy and Mines and ProInversion that allows the company to recover, at its discretion and on an accelerated basis, the 18% IGV taxes applied to engineering and construction costs associated with future development of Corani.

CORDOBA MINERALS

Junior explorer Cordoba Minerals (TSXV: CDB; CDBMF) is looking to discover copper-gold deposits in Colombia.

The company’s current focus is the San Matias copper-gold project, located on the northern extension of the prolific Mid-Cauca gold belt, where it had been involved in a joint venture with Robert Friedland-controlled High Power Exploration (HPX), whereby HPX could have earned up to a 65% interest in San Matias by funding the project and completing a feasibility study.

Cordoba describes the San Matias property as covering over 200 sq. km of “ideal open-pit topography,” with excellent infrastructure.

However, on July 31, Cordoba acquired HPX’s 51% interest in the San Matias joint venture in return for 137.4 million Cordoba shares and 6.2 million warrants. As a result, Cordoba is now full owner and operator of the San Matias project.

Earlier in July, Cordoba raised $10 million by privately placing subscription receipts sold at 81¢ apiece. Each receipt entitled the holder to a share and half a warrant exercisable at $1.08 for two years.

Cordoba says the proceeds will be used to advance San Matias, repay up to $1.5 million of expenses by HPX that are not covered by the acquisition agreement and for general corporate purposes.

GPM METALS

GPM Metals (TSXV: GPM; US-OTC: GPMTF) is a Toronto-based, zinc-focused junior led by Patrick Sheridan that has exploration projects in Canada, Australia and Peru.

In June, the company started a 2,000-metre drill program at its Pasco zinc property in the Central Peruvian zinc belt, 30 km northeast of the Cerro de Pasco mine. The drilling follows a ground geophysical survey that helped delineate two zones of interest, and a program in 2015–2016 of trenching, rock sampling and mapping.

GPM describes the wholly owned Pasco claims as comprising 63 sq. km of contiguous land suitable for a district scale, greenfield base metal discovery. It says the concessions have not seen modern mineral exploration or drilling before the staking and acquisition of the properties by its Peruvian agent in 2014.

GPM has an $11-million market capitalization, with shares last trading at 12.5¢ apiece.

INV METALS

INV Metals (TSX: INV; US-OTC: ILNLF) is a Toronto-based junior long focused on exploring and developing the wholly owned Loma Larga (formerly Quimsacocha) gold property in Ecuador.

INV’s chief operating officer is Bill Shaver, a cofounder of Dynatec and past president and CEO of DMC Mining Services. INV’s CEO is Candace MacGibbon, an accountant by training who who had past stints with RBC Capital Markets, BMO Capital Markets, Deloitte and Inco.

In June INV started a feasibility study of Loma Larga, which INV envisions as being developed into an underground mine capable of producing 150,000 oz. gold annually over a 12-year mine life. The study is due towards the end of 2018.

A prefeasibility study prepared in 2016 calculated a 26% after-tax internal rate of return, initial capital of US$286 million, all-in sustaining costs of US$590 per oz. gold and an after-tax net present value of US$301 million.

In mid-2016, INV calculated a “probable reserve” at Loma Larga of 11.6 million tonnes grading 4.98 grams gold per tonne (1.8 million contained oz. gold), 28.0 grams gold per tonne and 0.29% copper (73.6 million lb. contained copper).

SIERRA METALS

Sierra Metals (TSX: SMT; NYSE-MKT: SMTS) owns and operates three precious and base metal mines in Latin America: the Bolivar and Cusi mines in Mexico, and the 82%-owned Yauricocha mine in Peru.

Located in Lima Department, the Yauricocha mine produces silver, lead, zinc, copper and gold from a high-temperature, carbonate-replacement deposit. It’s an underground mine with miners using sub-level caving & cut-and-fill methods, with ore processing in a flotation plant.

During the second quarter, Sierra Metals said its Yauricocha operation saw “continued production improvements” and it had found a high-grade oxide zone — referred to as the Esperanza North zone — between the Esperanza zone and Cachi-Cachi Mine at Yauricocha.

Company-wide, Sierra Metals’ second quarter was headlined by revenue of US$48.6 million and adjusted EBITDA of US$17.6 million on throughput of 454,805 tonnes and metal production of 2.7 million silver equivalent oz., or 23.1 million copper-equivalent pounds.

TINKA RESOURCES

Vancouver-based zinc explorer Tinka Resources (TSXV: TK; US-OTC: TKRTFF) is developing its 100%-owned Ayawilca zinc project, which comprises 150 sq. km located 200 km northeast of Lima and 40 km northwest of Cerro de Pasco in the silver-lead-zinc belt of Central Peru.

Since early 2017, Tinka has drilled 12,000 metres to test new targets and extend known mineralized zones.

Tinka has already defined three National Instrument 43-101 compliant resources on the Ayawilca property: the Zinc zone, with an inferred 18.8 million tonnes at 8.2% zinc equivalent (5.9% zinc, 74 grams indium per tonne, 15 grams silver per tonne, 0.2% lead); the Tin zone, with an inferred 5.4 million tonnes at 0.89 % tin equivalent (0.76% tin, 0.31% copper and 18 grams silver per tonne); and the Colquipucro silver zone, with an indicated 7.4 million tonnes at 60 grams silver, and an inferred 8.5 million tonnes at 48 grams silver in a preliminary open-pit shell.

Newest drilling highlights include 36.3 metres of 5.2% zinc, 0.2% lead and 65 grams indium per tonne from 273 metres deep in hole 17-79 at West Ayawilca.

Tinka shares last traded at 60¢ each, for a $127-million market capitalization.