Pan American acquires Hog Heaven silver play

The recent acquisition of the Hog Heaven property in Montana represents a first step for Pan American Minerals (TSE) to become a pure silver company.

The junior is headed by Ross Beaty, also president of Da Capo Resources (VSE), a junior active in Bolivia. In keeping with its corporate focus, Pan American intends to acquire other silver properties in North and South America, and recently raised $3 million for this purpose.

The 10.5-sq.-mile Hog Heaven contains 11.02 million tons grading 4.23 oz. silver and 0.022 oz. gold per ton in all categories, for a total resource of 46.6 million oz. silver and 240,000 oz. gold.

Pan American intends to await higher silver prices before proceeding with development. The project is advanced, with extensive drilling, metallurgical testing and prefeasibility evaluations having already been carried out. Beaty said this is in keeping with the company’s goal to acquire silver projects that can be brought on-stream quickly to take advantage of an upturn in silver prices.

Pan American agreed to buy the project from Hecla Mining (NYSE) for an undisclosed cash payment. Hecla will retain a 5% net profits royalty on commercial production and holds 1 million shares of Pan American (or 10% on a fully diluted basis).