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TABLE OF CONTENTS Oct 22 - 28, 2012 Volume 98 Number 36 - 0 comments

Mirasol makes the grade with Patagonian silver

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By: Matthew Keevil
Vancouver 2012-10-22

Argentina-focused silver-gold explorer Mirasol Resources (MRZ-V) has a budding joint-venture with U.S.-based producer Coeur d’Alene Mines (CDM-T, CDE-N) at the Joaquin silver-gold property in Argentinas Santa Cruz province, 80 km north of Coeurs Martha silver mine. And with a portfolio of promising earlier-stage projects, it looks like Mirasol may be on its way to multiplying that success through regional expertise and a strong exploration model.

Coeur holds a 51% interest at Joaquin, and has completed 23,000 metres of diamond drilling at the property. According to Mirasol president and CEO Mary Little, Coeur has indicated its intent to take the project through the feasibility stage, which would result in the silver producer earning a 61% stake.

On Aug. 7, Mirasol updated the resource at Joaquins La Negra and La Morocha deposits, which totals 13.7 million measured and indicated tonnes grading 90.1 grams silver per tonne and 0.1 gram gold, for 90.1 million contained oz. silver and 42,600 contained oz. gold.

Little explains during a phone interview that the program moved more than half of Joaquin's resource into the measured and indicated categories, which will allow Coeur to use those ounces in its feasibility study. Roughly 44 holes from the program missed the cut-off date and were not included in the resource estimate."

La Negra is the larger of the two at the moment, but the additional ounces and higher grades included in the infill drilling at La Morocha will be a great addition," Little comments, referring to drilling not included in the latest resource calculation. "La Negra is a low-sulphide system overall with great geometries for an open pit. The La Morocha deposit is an inclined shoot that also has great geometry for an open pit. Joaquin is one of maybe a half-dozen silver-dominant deposits in the world that can be taken by open pit."

Mirasol is hoping for a second home run with its wholly owned Espejo silver-gold project, 145 km northwest of San Julian, Argentina. On Oct. 4, the company finalized an exploration option agreement for Espejo with Vancouver’s Pan American Silver (PAA-T, PAAS-Q).

Under the agreement Pan American can earn a 51% interest in the property by spending US$4 million on exploration over four years. Pan American can bump that to 61% by taking the project to feasibility.

Mirasol used its proprietary targeting process to identify a number of low-sulphidation epithermal precious-metal targets similar to known mineralization at Pan American’s nearby Manantial Espejo mine, which produced 880,000 oz. silver at cash costs of US$15.46 per oz. during the second quarter.

With Coeur and Pan American moving ahead at Joaquin and Espejo, Mirasol has turned its attention to a pair of earlier-stage assets that have already provided strong exploration returns for the company: the Virginia and Claudia projects.

The Virginia vein zone is located on Mirasol’s wholly owned Santa Rita land package 100 km southeast of Las Heras, Argentina. Santa Rita was staked in 2004, but the company made headlines when it discovered the Virginia zone in 2009. A follow-up prospecting program identified silver-bearing veins that outcropped, and created a target-rich environment for Mirasol’s geological team.

Virginia is a high-grade quartz vein system ranging from 1.5 metres to over 6 metres in width, depending on the shoot. Mirasol has identified seven shoots so far.

Mirasol’s seven deposits are highly oxidized at lower drill limits, start near surface and cover over 3.4 km of strike length. On June 21 the company released results from a diamond-drilling campaign that focused on the Julia, Naty, Ely South and Ely North veins. Highlights include 3.4 metres averaging 486 grams silver in hole 143A; 4 metres grading 240 grams silver in hole 157; 3.3 metres of 199 grams silver in hole 164; and 10 metres averaging 209 grams silver in hole 174.

Mirasol is working on its geological model at Virginia in anticipation of a maiden resource at the project. Little notes that regional high-grade silver veins are often encased in a broad halo of silver-mineralized wall rock that can yield favourable conditions for bulk-tonnage open-pit mining."

Were at a major milestone at Virginia. We feel this resource is going to set a baseline for minimal value," Little says of the upcoming resource estimate, which she expects to be in hand by year-end. "Since its discovery three years ago, we’ll have taken the project from discovery outcrop to first resource. I think that’s a real credit to our team, and speaks to the unusual nature of the deposit."

Mirasol maintains blue sky potential on the Santa Rita package, which runs nearly 40 km north–south. The company has drilled under 3.5 km of outcropped veins that run for 9 km. Trenching and geophysics at Santa Rita have also identified additional targets that Little calls the next phase of exploration.

Mirasol’s wholly owned Claudia silver-gold property lies 30 km south of AngloGold Ashanti’s (AU-N) Cerro Vanguardia gold-silver mine, marking a fourth asset in Argentina’s Santa Cruz province. The junior ran a field exploration program earlier this year at Claudia, including rock-chip assays that hosted up to 20.1 grams gold and 34 grams silver. Mirasol is focused on the Laguna Blanca-Ailen zone, the 15 km Curahue trend and the Rio Seco vein zone."

We’re excited about Claudia because we believe it could be a significant gold property, and we have full ownership," Little says, citing a database that includes 6,000 metres of reverse-circulation and diamond drilling. "Most of the targets were gravel-covered geophysical targets, though not all of them. [Drilling] was focused on only a couple of areas, and we’ve since defined a number of other areas that were previously unknown, with major float-subcrop vein trending."

Mirasol remains active on the project generation front, having turned some of its attention to precious metals in Chile. The company maintains an active project portfolio in Argentina, and held roughly US$13 million in cash and equivalents at the end of March.

Little says Mirasol’s share price has tracked closely with the silver market since the Virginia discovery in 2009. The company is up 50% — or 83¢ since late August — on the back of rallying precious metals markets, closing at $2.24 at press time.

Mirasol shares have a 52-week trading range of $1.37 to $4.45 apiece. There are 42.7 million shares outstanding, for a market cap of $96 million.

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