VANCOUVER – Most junior explorers face the same quandary. They own a prospective project, or perhaps several, but have no sources of income, which means finding the funds to explore their prospective lands is a constant struggle.
El Tigre Silver (ELS-V) is in that same boat, but hopefully not for long. If things work out according to plan the junior will be producing silver before the end of the year from historic tailings dumps at its Mexican property, and those ounces will give El Tigre the income it needs to keep drilling for the untapped silver and gold still hiding in those Sonoran rocks.
El Tigre's namesake project is in northeastern Sonora state, less than 100 km from the US border. The project has deep history: between 1903 and 1938 the El Tigre mine churned out some 75 million oz of silver and 320,000 oz of gold, pulled from three high grade epithermal veins laced through the hills.
The historic mine was no small operation, with 15 mine levels extending along 1.5 km of strike and reaching across 450 metres of vertical. It was shut down in 1938, not for lack of ore, but for lack of returns. The price of silver had collapsed from 60¢ per oz. to just 30¢, rendering the mine uneconomic.
The result today is a property rife with opportunity.
First, there is certainly still gold and silver in those hills. The property sits at the north end of the Sierra Madre belt, an area renowned for precious metal mineralization, and the old El Tigre mine is proof that the Sierra Madre's mineralization made it this far north. Ore extracted from the mine averaged roughly 1,200 g/t Ag and 8 g/t Au.
The mine's 15-opt Ag cut-off grade means miners left behind any rocks carrying less than 460 g/t Au. As such the supposedly mined out sections of the veins still contain a lot of silver. The mine also ceased operations before reaching the known limits of the three main veins, which translates into another stash of remnant mineralization.
The real excitement for El Tigre, though, is the potential to find faulted extensions of known veins and as yet undiscovered new veins – in other words, to find new mineralization. To test that theory, the company has spent the last few years slowly probing the hills along strike from the old mine.
Between surface mapping and almost 18,000 metres of drill data from owners old and new, El Tigre has mapped the prospective strike for more than 5 km. In the current 5,000-metre drill program, the company is focused on a 1.2-km long segment of the 5.3-km long zone. The southern portion is of interest because El Tigre thinks it might host bulk-tonnage disseminated gold mineralization alongside the known high grade veins.
Results from the latest seven holes support that notion, with good grades over 20 to 70 metre widths. Hole 51 returned three such intercepts: 22 metres grading 0.89 g/t Au and 6.38 g/t Ag, 25.5 metres of 2.93 g/t Au and 20.9 g/t Ag, and 25.1 metres grading 1.35 g/t Au and 43.9 g/t Ag, all lying between 22 and 134 metres depth.
Hole 56 cut 70.4 metres of 1.04 g/t Au and 55.8 g/t Ag from surface. Hole 55 hit into 47.5 metres of 0.53 g/t Au and 34.7 g/t Ag from 12 metres depth. And hole 53 returned 46 metres carrying 0.74 g/t Au and 14.4 g/t Ag.
Those holes tested an area known as Brown's Shaft, which is near the divergence of the El Tigre and Seitz-Kelly veins. El Tigre was the primary vein mined in the old operation; Seitz-Kelly was also mined, but to a lesser degree.
The previous six holes tested the El Tigre vein farther down dip. Each hole penetrated the mineralized stockwork that makes up the vein's hanging wall and footwall. Notable results included 57.6 metres grading 0.68 g/t Au and 17.8 g/t Ag from 18 metres down hole 50, 119.5 metres grading 1.21 g/t Au and 29.5 g/t Ag from 3 metres down hole 49, and 48.7 metres grading 0.595 g/t Au from 19 metres down hole 45.
The current 5,000-metre drill program is nearing completion, with many of the results still pending. Once they are in, El Tigre will be able to calculate its first resource estimate after several years of drilling.
"We did a drill program in 2011 that was broadly spaced," said Stuart Ross, El Tigre president and CEO. "In 2012 we were a little more targeted. This year it is strictly limited to a 1.2 km length, which will give us the spacing we need for a block model. There is a lot of ground to test, but for us to get a block model we just had to focus on a smaller length."
Ross is certainly pleased that the drill program at El Tigre is going smoothly and producing good results. However, he is somewhat distracted by another task: raising the $5 million his company needs to start processing the silver-rich tailings sitting in dumps around his property.
There are between 800,000 and 1 million tons of tailings piled at El Tigre that carry approximately 80 g/t Ag and 0.3 g/t Au. Metallurgical test work indicates agitated leaching works well to recover those precious metals, at a rate of 79% for silver and 94% for gold.
El Tigre would like to build a facility that grinds the tailings once and then sends them through the agitation leach process at a rate of 400 t/d. To do that will cost roughly $5 million. El Tigre has enough money in the bank to fund its exploration program through the year, but it needs to raise the cash to fund the tailings project separately.
"We're currently looking for a reasonable, non-equity type of funding for the procurement of the equipment to go ahead and build it," said Ross. "At this point there are some funding arrangements available that are either very dilutive or very expensive, so we're being a little picky in finding one that suits our shareholders and our board of directors."
Ross says they have been looking for the full $5 million to fund a 400 t/d facility, but they are also open to spending half that amount to build a 200-t/d operation.
"At 200 tonnes per day, if you look at the grades and the recoveries there's still a significant amount of cash that will come out of the operation," said Ross. That cash would let El Tigre focus on its real goal: finding enough new mineralization to get this historic silver-gold mine back in action.
El Tigre's share price has been range bound for the last year, moving between 18¢ and 30¢. It currently sits just above 20¢. The company has 53 million shares outstanding.
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