LATIN AMERICA: Peru Project Roundup

By Ellsworth Dickson

Peru has a long history of gold mining dating back to pre-Columbian times; however, the country is endowed with other metals too being the world’s third largest producer of copper, silver, zinc and tin. It is also the seventh largest producer of gold. Copper accounts for 60% of exports.

As with other exploration and mining operations elsewhere, the COVID-19 pandemic has resulted in some delays and suspensions of activities that are now gradually returning to normal or near-normal.

Below is a selection of Peruvian exploration and mining activities.

Auryn Resources Inc. [AUG-TSX, NYSE American] has three projects in Peru: Sombrero, Curibaya and Huilacollo. The Sombrero copper-gold project in southern Peru consists of the North Sombrero and South Sombrero properties, comprising over 130,000 hectares owned or optioned by Auryn Resources. The main targets at Sombrero are copper-gold skarn and porphyry systems and precious metal epithermal deposits. Drilling is planned.

At the 100%-owned Curibaya Project, a new zone of mineralization with grades of up to 946 g/t silver and 1.96 g/t gold has been identified approximately 1 km northeast of previous sampling. Drill permits are expected in 2020.

The Huilacollo epithermal property features intense hydrothermal alteration that is consistent with epithermal gold-silver mineralization over a 4 km by 6 km area. Contiguous to the Huilacollo property are the Tacora and Andamarca properties, which the company acquired in August 2017.

Bear Creek Mining Corp.’s [BCM-TSX] 100%-owned Corani silver-lead-zinc deposit is one of the largest, fully permitted silver deposits in the world and is highlighted by its substantial base metal credits, location in a mining-friendly jurisdiction, and overwhelming community support.

 

 

 

Camino Minerals Corp. [COR-TSXV, CAMZE-OTCQB, XC01-FSEankfurt] has released the results of surface sampling at its Los Chapitos copper discovery in southern Peru.

Sampling at the Adriana Zone near copper-mineralized outcrop returned: 41.5 metres of 0.78% copper, 68 metres of 1.27% copper and four segments totalling 86 metres of 0.65% copper over 140 metres. Sampling at the Lourdes Zone returned 32 metres of 0.72% copper and 13 metres of 1.16% copper.

 

Candente Copper Corp. [DNT-TSX] is developing the large scale Canariaco Norte copper deposit in northern Peru. The deposit contains measured and indicated resources totaling 752.4 million tonnes, grading 0.45% copper, 0.07 g/t gold and 1.9 g/t silver (0.52% copper equivalent), containing 7.53 billion pounds of copper, 1.7 million ounces of gold and 45.2 million ounces of silver. In addition, the deposit contains 157.7 million tonnes of inferred resources containing 1.434 billion pounds of copper.

A second mineralized copper porphyry, Canariaco Sur, has also been discovered adjacent to Canariaco Norte. The company has said it sees evidence of a third porphyry deposit at the Quebrada Verde target, both of which offer the potential to significantly expand the scope of the Canariaco copper project.

Chakana Copper Corp. [PERU-TSXV] has advanced the mineral occurrence and geological model of breccia pipe 1 (Bx 1) at its Soledad project in Ancash, Peru. Bx 1 is one of 23 outcropping breccia pipes at Soledad and part of a cluster of 92 targets awaiting drill testing. Chakana can earn a 100% interest from Condor Resources Inc. [CN-TSXV].

 

 

 

Dynacor Gold Mines Inc. [DNG-TSX; DNGDF-OTC] is a gold producing corporation engaged in production through the processing of ore purchased from the ASM (artisanal and small-scale mining) industry. At present, Dynacor produces and explores in Peru. In 2019, Dynacor produced 80,677 ounces of gold, in line with 2018 (81,314 ounces).

On March 16, 2020, Dynacor temporarily stopped its operations following the state of emergency declared by the Peruvian authorities in response to the COVID-19 pandemic. Due to the high level of ore inventory at the end of 2019 and despite the temporarily shut-down since the third week of March, the plant was able to process 22,901 tonnes of ore in Q1-2020.

Fortuna Silver Mines Inc. [FVI-TSX; FSM-NYSE] has a 100% interest in the producing Caylloma silver-lead-zinc mine 240 km northwest of Arequipa. The underground mine production rate is 1,430 tonnes per day. Due to the uncertainties related to the impact of the government constraints on the company’s business and operations due to the COVID-19 pandemic, Fortuna has withdrawn its production and cost guidance for 2020. Q1-2020 silver production was 249,111 oz and gold production was 471 oz.

 

The Coricancha gold-silver-zinc-copper mine in Peru. Source Great Panther Mining Ltd.

Great Panther Silver Ltd. [GPR-TSX; GPL-NYSE American], on June 30, 2017, closed the acquisition of the Coricancha Mine in the central Andes of Peru from Nyrstar NV [NYR-BR]. The Mine is located in the Province of Huarochirí, approximately 90 km east of Lima.

The Coricancha Mine is fully permitted to re-start operations. The project includes an operational 600 tonne-per-day flotation and gold BIOX® bio-leach plant along with supporting mining infrastructure. The mine has been on care and maintenance since August 2013 when it was closed due to falling commodity prices.

Gold-silver-lead-zinc-copper mineralization (approximately 80% gold-silver by value) occurs as massive sulphide veins that have been mined underground by cut and fill methods. Great Panther completed a Preliminary Economic Assessment in May 2018 and a Bulk Sample Study in June 2019. Planned production is 3.1 million oz AgEq per year.

 

Open pit mining at HudBay’s Constancia polymetallic mine in southern Peru. Source: HudBay Minerals Inc.

HudBay Minerals Inc. [HBM-TSX, NYSE] experienced operational and supply chain disruptions, including a temporary suspension of operations at its 100%-owned Constancia Mine 100 km south of Cusco for a period of approximately eight weeks as a result of a government declared state of emergency in March.

On May 14, Constancia received recognition and approval from Peru’s Ministry of Energy and Mines for its restart protocols and is planning to ramp up operations shortly at the open pit copper-molybdenum-silver-gold mine.

During Q1-2020, the Constancia Mine produced 19,290 tonnes of copper, 8,254 oz precious metals and 354 tonnes of molybdenum. Production results were lower than Q4-2019 2019 as a result of planned lower copper grades, in line with the mine plan, and lower ore production due to the temporary suspension of operations in March following a government declared state of emergency in Peru.

 

Lida Resources is developing the San Vicente Mine Project near Trujillo, Peru. Photo courtesy Lida Resources Inc.

Lida Resources Inc. [LID-CSE] owns and operates the San Vicente Project near Trujillo. In the development stage, the underground lead-silver-zinc-gold mine has tunnels driven on three veins. Currently, bulk samples are being extracted and processed in the concentrating plant. The objective is to place San Vicente into commercial production.

Lida also owns the exploration stage Las Brujas gold project near Cajamarca.

 

 

 

 

 

 

Miramont Resources Corp. [MONT-CSE; MRRMF-OTCQB] executed a definitive agreement with Kuya Silver Corp., whereby it will acquire all of the issued and outstanding shares of Kuya in exchange for shares of Miramont.

Kuya is a privately held Canadian-based silver-focused mining company, earning into an 80% interest in the Bethania silver mine in central Peru. Bethania was in production until 2016, toll milling its ore at various other concentrate plants in the region, and Kuya’s plan was to implement an expansion and construct a concentrate plant at site before restarting operations.

Miramont also has two 100%-optioned projects in Peru: the Cerro Hermoso gold project and the Lukkacha copper project.

 

Newmont Mining Corp. [NEM-NYSE] reported that on March 17, the Yanacocha operation safely ramped down in response to travel restrictions imposed by the Peruvian government. Limited personnel remained on-site to perform essential work, including security, water treatment, environmental protection, and gold production continued from leach pads. In early May, the operation began remobilizing following the confirmation that the Peru Economic reactivation plan allowed surface mining. The site is implementing a safe restart plan with milling operations starting on May 16th and surface mining activities expected to begin by the end of May.

Pan American Silver Corp. [PAAS-TSX, NASDAQ] has a number of operating mines and exploration projects in Peru. Shahuindo is an open-pit, 36,000 tonne-per-day heap leach gold mine. Commercial production began in 2016 with current estimated mine life until 2028. Proven and Probable Reserves are 1,763,000 oz gold. Cash costs are $570/oz.

The 100%-owned La Arena open pit, heap leach, 36,000 tpd gold-copper mine is 480 km northwest of Lima. Proven and Probable Reserves are 410,000 oz. Cash costs are $644/oz.

The 99.94%-owned La Huaron open pit, 2,500 tpd silver, lead, zinc, and copper mine is 320 km northeast of Lima. Proven and Probable Reserves are 53.7 million oz silver.

The 92.3%-owned Morococha silver-lead-zinc-copper mine at Yauli has Proven and Probable Reserves of 31.9 million oz silver.

at the Cotabambas Project in Peru. Source: Panoro Minerals Ltd.

Panoro Minerals Ltd. [PML-TSXV, Lima; PZM-FSE] has completed the sale of the Cochasayhuas gold project to Mintania SAC of Peru for a total of US$2.45-million to be paid in instalments plus a 5% NSR for 15 years from start of commercial production.

Panoro is advancing its flagship Cotabambas Project in the fast developing copper mining district in Southern Peru. The project is a porphyry copper-gold-silver deposit, located 48 km south west of Cuzco and is comprised of two clusters of mineralized areas. A Preliminary Economic Assessment was filed in April 2015 and updated in September 2015.

A mineral resources estimate for the Cotabambas Project tallied 117.1 million tonnes at 0.42% Cu, 0.23 g/t Au and 2.74 g/t Ag and 0.0013% Mo as Indicated and 605.3 million tonnes at 0.31% Cu, 0.17 g/t Au, 2.33 g/t Ag and 0.0019% Mo as Inferred .

The 3,600-hectare Humamantata polymetallic property is located in Southern Peru where two exploration campaigns have been completed.

Plateau Energy Metals Inc. [PLU-TSXV; PLUUF-OTCQB; QG1-FSE] has completed a preliminary test work program for the recovery of potential by-products such as sulfate of potash (SOP), caesium and rubidium from its Falchani Lithium Project in southern Peru. The program was conducted by ANSTO Minerals, based in Sydney, Australia.

“These preliminary results are encouraging and support potential by-products that our Falchani project could supply in addition to lithium carbonate,” stated Dr. Laurence Stefan, President and COO.

Plateau’s Macusani uranium-lithium project has an NPV of US$603 million, an IRR (8%) of 40.6% and a payback of 1.8 years. Measured and Indicated Resources are 52.9 million lbs U3O8 with Inferred Resources at 72.1 million lbs U3O8.

Sierra Metals Inc. [SMT-TSX, Lima; SMTS-NYSE American] reports that the Peruvian government has activated Phase two of its economic recovery plan effective June 5, 2020. Phase two includes mining and mining-related activities. Sierra Metals will begin to recall required furloughed employees and contractors and will start to progressively ramp the mine operations back up to full capacity.

Proven and Probable Reserves are 1,257 million ZnEq lbs. Measured and Indicated Resources are 2,034 million ZnEq lbs. A preliminary economic assessment released in June 2018, studies increasing production to 5,500 tonnes per day in 2021.

Sierra Metals also has a number of exploration projects in Peru.

Southern Copper Corp. [SCCO-NYSE, Lima] has several producing mines in Peru: the Cuajone copper mine, Tantahuatay gold-copper mine, Toquepala copper mine as well as the Los Chancas exploration projects.

 

 

 

 

SSR Mining Inc. [SSRM-TSX, NASDAQ] has the 100%-owned San Luis development project, located in the Ancash Department, central Peru. The project is centered on a high-grade, gold-silver vein, the Ayelén vein.
Indicated Resources are 9.0 million oz silver averaging 578 g/t and 0.35 million oz gold  grading 22.40 g/t. Inferred Resources are 0.2 million oz silver averaging  270 g/t. A Feasibility Study was completed in Q2-2010.

Highlights of the Feasibility Study include:

• Mine life: The underground mine planned to exploit the Ayelén vein has an estimated life of 3.5 years.
• Robust project economics: A net present value of $39.2 million (5% discount rate) at base case metal prices and an internal rate of return of 26.5% at base case metal prices (gold price of $800/oz and silver price of $12.50/oz).
• Capital expenditures: $90.4 million (+/- 15%) for a 400 tonne/day underground mine.

Exploring the Tinka Resources Ayawilca zinc and tin project in Peru. Source: Tinka Resources Ltd.

Tinka Resources Ltd. [TK-TSXV] is now able to resume exploration at its Ayawilca property in the Pasco region of central Peru. The state of emergency in Peru is expected to continue until June 30. As such, reactivation of exploration activities will require additional and carefully planned logistics.

The next phase of the drill program at Ayawilca is planned to start in August and continue until December, all going well. This program is expected to include at least 7,000 metres of infill and step-out drilling, with a focus on growing and upgrading the high-grade zinc-silver resources at the West and South zones.

Ayawilca is one of the largest undeveloped zinc-silver resources in a junior  with strong fundamentals: PEA in 2019 showed strong economics with a modest CAPEX, and opportunities to optimize further.

 

 

Mining’s Santander zinc mine in west-central Peru. Source: Trevali Mining Corp.

Trevali Mining Corp. [TV-TSX, Lima; TREVF-OTCQX, 4T1-FSE] owns and operates the Santander Mine approximately 215 km northeast of Lima  and is comprised of an underground mine, a 2,000-tonne-per-day processing mill, a conventional sulphide flotation mill, and associated infrastructure.

Trevali is currently mining the Magistral North, Magistral Central and Magistral South deposits.

Hannan Metals discovers 2 km of copper-silver in Peru

Hannan Metals Ltd. [HAN-TSXV; HANNF-OTC] provided an update on its exploration and social programs at the 100%-owned San Martin copper-silver project in Peru. San Martin is a newly discovered, basin-scale high-grade copper-silver project that extends for 120 kilometres along the foreland region of the eastern Andes Mountains in north-central Peru.

Peru remains on a state of emergency until the end of June to contain the COVID-19 outbreak. From December 2019 through to mid-March 2020, Hannan completed an active field work program at its San Martin Project. Numerous new copper and silver discoveries were made over a 20-km trend within the 60-km long Sacanche claim area. The first set of assays from some of these areas are reported below.

Highlights:

A new 2-km-long zone of high-grade copper-silver mineralization has been defined by mapping at the Nueva Esperanza prospect within the Sacanche claim:

• Mineralization was located within three E-W creeks during follow up of previously reported outcrop and boulder samples that assayed 0.6 metres at 8.7% copper (Cu) and 59 g/t silver (Ag) and 30% Cu and 595 g/t Ag respectively.

Best new results from boulders in adjacent creeks include 10.0% Cu and 70 g/t Ag and 1.5% Cu and 31 g/t Ag. A total of 25 boulders have been sampled at Nueva Esperanza, which average 1.9% Cu and 31 g/t Ag, and range from 0.0% Cu to 30.1% Cu and 0.04 g/t Ag to 595 g/t Ag. A total of 19 outcrop samples have been taken at Nueva Esperanza, which average 0.54% Cu and 4 g/t Ag, and range from 0.0% Cu to 8.7% Cu and 0.04 g/t Ag to 59 g/t Ag.

The Nueva Esperanza Zone remains open to the north, south and down dip and regional results suggest an inferred strike of the mineralized position is greater than 10 km.

Nueva Esperanza lies within a regional trend of previously reported outcrop samples from the Sacanche claim. Outcrop sampling 5 km north of Nueva Esperanza returned high-grade results including 2 metres at 5.9% Cu and 66 g/t Ag and sampling 16 km south of Nueva Esperanza returned 3 metres at 2.5% Cu and 22 g/t Ag.

Michael Hudson, Hannan’s CEO, stated: “While our exploration program delivers excellent discovery successes with copper and silver mineralization at all scales, the critical path for Hannan at San Martin has always been social permitting. We have a quarter of a century of operating experience in Peru, our directors have deep in-country experience, and we appreciate the great diversity of topography, climate, social groups and operating requirements across the country.

“Through professional and respectful social programs, the company has gained field access during our first full exploration season at San Martin, and we are thankful for the support and working relationships that we have developed with all stakeholders. We look forward to releasing further results from this year’s field programs and having our field teams return to the project area when it is safe and permitted to do so.”

Dr. Quinton Hennigh, an internationally-renowned economic geologist, with over 25 years of exploration experience and expertise with major gold mining companies, is a geological adviser to Hannan and visited the project in late February 2020.

Dr. Hennigh stated: “In late February prior to COVID-19 travel restrictions, I visited Hannan’s San Martin Project. At the time, exploration crews were pushing their way into new areas where, day after day, they would return back from the field with new samples from new outcrops and boulders collected from along the prospective trend along which the redox boundary within the Sarayaquillo Formation outcrops.

“Assays from these samples demonstrate compelling evidence Hannan is likely dealing with a stratigraphically-controlled high-grade Cu-Ag system that is quite extensive. Combining this evidence with that from other explorers in this region who are seeing similar style mineralization extending northward across the border into Ecuador, it is starting to appear as though we are dealing with a basin wide mineralizing event.”

Channel samples are considered representative of the in-situ mineralization samples and sample widths quoted approximate the true width of mineralization, while grab (boulder) samples are selective by nature and are unlikely to represent average grades on the property.

The San Martin Project is an early stage exploration project. Previous mineral exploration in the area is limited.

The project consists of a total of 87 mining concessions (mineros petitorios), 40 concessions which have been granted.

Company Updates From Management – Wed 29 Apr, 2020

Palamina Corp – Project updates in Peru and overall strategy when Peru opens back up

Andrew Thomson, President and CEO of Palamina Corp. (TSX.V:PA – OTC:PLMNF) joins me for a quick overview of planned work in Peru after the COVID-19 shutdown ends. We also discuss the potential of changes coming out of Peru when it comes to permitting and exploration work.

If you have any follow up questions for Andrew please email me at Fleck@kereport.com.

Click here to visit the Palamina website to learn more about the portfolio of properties in Peru.

Company Updates From Management – Fri 17 Apr, 2020

Auryn Resources – Broad Exploration and Operational Updates and Comments On The Homestake PEA

I am diligently working to get update from all of the companies all of you, my listeners, are sending in. Please keep the emails and questions coming to Fleck@kereport.com.

Today I get an update from Auryn Resources through the Executive Chairman Ivan Bebek. Ivan and I start with a general operational update with more of a focus on future work in Peru – which is planning to end its lock down on April 26th. We also discuss the Homestake PEA and the environment for potentially monetizing an asset from the Company’s portfolio.

Click here to read over the recent news out of Auryn Resources.

Company Updates From Management – Fri 6 Mar, 2020

Auryn Resources – Updating the progress in Peru and the possibility of a spin-out company

Auryn Resources (TSX:AUG, NYSE:AUG) has been busy this year on its properties in Peru (Sombrero and Curibaya) and raising $15million to fund its exploration plans for the year.

Ivan Bebek, Execuative Chairman of Auryn joins me to recap the recent news from this year. We start with the DIA being obtained for the Sombrero Project and the new high grade targets at Curibaya. Next Ivan outlines the possibility of spinning out the Homestake and Committee Bay Projects into another company.

If you have any follow up questions for Ivan please email me at Fleck@kereport.com.7

Click here to read over the recent news releases at the Auryn website.

Company Updates From Management – Fri 17 Jan, 2020

Auryn Resources – Following up on the news today regarding the age of rocks at the Sombrero Project

Ivan Bebek, Executive Chairman of Auryn Resources joins me today to further explain the importance of the news release today. Linked below, the news outlined the age of the “intrusives directly associated with mineralization at the Sombero project” to those in the Andahuaylas-Yauri belt.

Click here to read over the full news release.

Company Updates From Management – Thu 16 Jan, 2020

Palamina Corp. – With the DIA secured for the Coasa Gold Project here’s what’s coming next

Last week Palamina Corp. (TSX.V:PA & OTC:PLMNF) announced it received the much anticipated DIA for the Coasa Gold Project in Peru. News also released back in mid-December outlined two new hires by the Company – William McGuinty as its Vice President of Exploration and Christina McCarthy as an advisory board member.

Andrew Thompson, President and CEO of Palamina joins me for a recap of 2019 work completed on a wide range of the Company’s properties. He also outlines the importance of both news releases mentioned above. Now with the DIA Andrew shares what steps come next to get drills on the ground and start testing some of the targets. We wrap up the call with the expected news flow in the near term.

Click here to visit the Palamina website and a recap of the recent news.

Company Updates From Management – Wed 15 Jan, 2020

Auryn Resources – Updating the progress on the Sombrero Project DIA and other exploration updates

Over the past few weeks I have been receiving a number of emails asking for an update from Auryn Resources. The questions ranged from the status of the DIA on the Sombrero project in Peru, to what the company has planned for the newly acquired Curibaya Project also in Peru, and for the other projects – Homestake and Committee Bay.

Ivan Bebek, Executive Chairman of Auryn Resources joins me to address all of these questions as well as touch on finances of the Company.

If you have any further questions for Ivan please email me at Fleck@kereport.com.

Click here to visit the Auryn website and read over the full Company presentation.

Weekend Show – Sat 12 Oct, 2019

Hour 2 – A Full Hour For Resource Investors!

The full second hour is dedicated to all of you resource investors! I chat gold, silver, copper, battery metals, and oil. Please update me with any companies that cross your radar. My email is Fleck@kereport.com.

Click here to listen to the first hour that focuses on major markets and the near term recession fears.

I hope everyone in Canada has a happy Thanksgiving and you all enjoy this weekend’s show!

  • Segment 1 & 2 – Joe Mazumdar, Editor of Exploration Insights joins me for a discussion on the environment in Peru for exploration companies and what he thinks is the best investment strategy. We also dive into the copper market.
  • Segment 3 – Brien Leni, Editor at the Junior Stock Review website chats about investor interest in precious metals compared to the base and battery metals.
  • Segment 4 – Josef Schachter, Editor of the Schachter Energy Report updates us on the oil . We discuss the recent price moves and the stocks he thinks will be the best investments this winter.

Joe Mazumdar
Brien Leni
Josef Schachter