Ximen sizes up gold, silver potential in southern BC

VANCOUVER — It’s early days for the team at Ximen Mining (TSXV: XIM; US-OTC: XXMMF), but president and CEO Christopher Anderson has big plans for its historic gold and silver projects in southern B.C. Ximen has locked down a pair of well-known gold prospects in the region and, assuming it can close a proposed $5-million financing,  the company is looking to carry out substantial exploration this year.

During an interview with The Northern Miner at Ximen’s Vancouver offices, Anderson recounts how he met geologist Linda Caron in early 2013. Caron is under contract with Kinross Gold (TSX: K; NYSE: KGC) at its Kettle River–Buckhorn gold complex to dig up more mill feed sources in northern Washington State and southern B.C. Kinross hauls Buckhorn ore to their Kettle River mill 75 km southeast, with a reported 18-month mine life.

“Linda brought the Gold Drop opportunity to our attention,” Anderson says. “As I understand it, Kinross geologists had been interested in putting some drill holes in the project, but it has been tied up since the 1980s under private ownership. I said: ‘If you can show there’s a shot at a bulk sample, I think we have a vehicle that might work.’ In early October we did a lot of diligence work on the property that returned high-grade, low-sulphidation gold mineralization. So we pulled the trigger on the deal.”

Ximen ended up acquiring the 12.5 sq. km Gold Drop property — 9 km northeast of Greenwood, B.C. — for $175,000 in staged-cash payments, 750,000 shares and a 2% net smelter return royalty. According to a recent technical report by Caron, the project hosts at least eight low-sulphide, gold-bearing veins or vein systems, including: the North Star, Gold Drop, Amandy, Lakeview and Moonlight occurrences.

The predominant deposit style is characterized by tabular veins in more competent host rocks. Veinlets, stringers and stockworks form in less competent lithologies and within broad fracture zones.

During 2013 nine chip-and-grab samples were collected at Gold Drop from the North Star vein, with results highlighted by 81 grams gold per tonne and 427 grams silver per tonne in one chip-sample, and 11.25 grams gold and 52.1 grams silver in another.

“We’re looking at going in and opening up some of the surface-quartz veins, which were running high grades, historically. I’d point out the project is actually closer to the Buckhorn facility than where Kinross is trucking in its ore,” Anderson continues. “We have a twofold strategy here: We want to advance and identify three 2,500-tonne bulk samples, and we want to understand the overall geologic structure to see if we can identify any other sources of mill feed.”

Gold Drop was discovered in the 1890s, with high-grade vein material shipped from a crosscut tunnel excavated to the Gold Drop vein in the late 1930s. From 1936 to 1937, 2,550 grams gold and 45,000 grams silver were recovered from 214 tonnes of material grading 11.92 grams gold and 210 grams silver.

During discussions with Caron and his geological team, another opportunity came across Anderson’s desk in the form of the Brett epithermal gold project, 29 km west of Vernon, B.C. Ximen ended up signing a deal for a 100% stake in the property with Running Fox Resource (TSXV: RUN; US-OTC: RFXRF) for $1 million in cash and 1 million shares, with another $350,000 in stock due over the next two years.

Exploration work at Brett has confirmed a number of gold-bearing mineralized zones associated with north-trending altered shear-fracture zones. Previous work consisted of geochemical surveys, trenching, 10,000 metres of diamond drilling, 2,800 metres of reverse-circulation drilling and 460 metres of underground development.

Most historic work has concentrated on a small area of the property running 200 metres laterally and 76 metres deep, along what is jointly known as the Main Shear zone and RW vein.

Historic hole 93-19 cut 16.8 metres grading 35.8 grams gold at Brett, and in 1996 a 290-tonne bulk sample taken from the RW vein and Main Shear zone was shipped to Trail and returned a grade of 27.74 grams gold and 63.7 grams silver. Work was halted in late 1996, with the property tied up in litigation over the past several years.

“Brett has a ton of history. One of the most exciting things about the project from our point of view was it was one of the first epithermal gold discoveries in B.C., but back in the day we didn’t have the same understanding of epithermal deposits as we do now,” Anderson says, noting that only $750,000 has been spent on exploration over the last decade.

“Most of the work has been isolated to just a single shear zone, but it’s a big structure. I think the last work done here was in 2004, and there are several other zones and a lot of unexplored area. I’d add that Brett is another project Kinross took a serious look at in the early 2000s,” he comments.

Ximen set out to compile the historic data at Brett — down to hand-drawn graphs — into a geographic information system (GIS) model to understand the epithermal structure. According to Anderson, the company is permitted for a 32-hole drill program at the site and will test alternate zones, as well as complete confirmation holes on the Main Shear zone.

Ximen has hired GIS specialist John May — who was formally with Kinross, and has a 30-year history in epithermal systems in the region — to work with Caron. The company mobilized its exploration team at Brett on May 6 with the intention of kick-starting a surface-mapping campaign and finishing a ground magnetometer geophysical survey.

The final piece to Anderson’s B.C. puzzle is beleaguered Huldra Silver (TSXV: HDA, US-OTC, HUSIF), which had been advancing the Treasure Mountain silver–lead–zinc project, situated 29 km northeast of Hope, B.C. 

Huldra sought creditor protection in June 2013 due to outstanding loans with Waterton Global Resource Management, but Anderson sees an opportunity with the recently built Merritt mill.

“I’ve been building a land position around Huldra since 2006. I have quite a bit of the southern Treasure Mountain area locked down, but we’d like to consolidate the entire play. The mill and mining facility, which is part of that package, is actually closer to Brett than the Buckhorn complex,” Anderson says. “So we view that as a potential regional milling hub. We’re doing our due diligence and exploring an avenue where we could deal with that debt and convert Huldra shareholders into potential Ximen shareholders.”

Huldra received an offer for the Merritt complex worth US$8 million from U.S.-based Concept Capital Management in April, though the company has yet to accept.

Ximen has a notable financial backer in the form of Eric Sprott, who holds a 10% equity stake. Ximen shares have jumped 310%, or 93¢, since early January, en route to a 52-week high of $1.23 per share at press time. Ximen has 13 million shares outstanding for a $16-million market capitalization.

“We’re underpinning our opportunity with Brett as a key asset, but we’re really looking to bring the right expertise on-board and move into that mining and milling space,” Anderson says. “I think our timing is perfect. I was trying to raise a little money in December and it was horrendous, but all of a sudden it seems to have changed.”