Silver Standard, Intrepid take on Argentine properties

Financial troubles in Argentina have not deterred two juniors with Latin American interests from taking on precious-metal properties in Argentina. Silver Standard (SSO-V) has agreed to purchase a 43% interest in the Pirquitas silver project in far-northwestern Jujuy province, while Intrepid Minerals (IAU-V) has signed an option to purchase the Casposo gold-silver property in San Juan province.

Pirquitas, which was ceded to creditors of Sunshine Mining and Refining (SSMRE-O) earlier this year, was in production as a tin and silver property from 1933 to 1990. Sunshine, which took over the property in 1995, completed a feasibility study in 1999 on a resource of 28 million tonnes grading 161 grams silver per tonne, with additional resources in the tailings and around the proposed open pit.

The feasibility study indicated a capital cost of US$133 million and suggested the project could produce 11 million oz. silver a year at a cash cost of US$1.33 per oz. The cost includes by-product credits from 3,200 tonnes tin and 16,300 tonnes zinc annually. Permits for mining were granted in 1999.

Silver Standard is paying US$4.3 million on closing, currently scheduled for June 14. The vendors get US$3 million of that in cash and the rest as a note, bearing interest at 10%, convertible to shares of Silver Standard at $5.80 (Canadian) per share.

Intrepid’s purchase, Casposo, has a resource of 1.1 million tonnes grading 14.1 grams gold and 192 grams silver per tonne. Under the option to purchase, Intrepid must pay US$300,000, spread over two years, and a total of US$450,000 in advance royalties. Intrepid also agreed to work commitments of US$600,000 over two years, with at least half to be spent in the first year.

Intrepid is planning a 2,500-metre drill program and metallurgical testing, as well as initial drilling on some outside targets on the 36-sq.-km property. A preliminary feasibility study is planned once the resource drilling and metallurgical work are complete.