MINING IN MEXICO — Brock group’s Northern Crown active on

On display in the Vancouver office of John Brock are several huge tusks of the woolly mammoth, a prehistoric elephant that lumbered across the Yukon until shifting climatic conditions drove it into extinction.

For Brock, who is head of the Western Prospector Group of exploration companies, the tusks are a constant reminder that those who cannot adapt to changing times will not survive.

For Canadian companies operating in the 1990s, survival is increasingly a matter of exploring opportunities abroad. That is why Brock, together with partner Wayne Roberts and their group of investors, has structured a stable of companies that, for the past four years, has been exploring properties throughout the world. Previously, much of their focus was on Western Canada. As well, each of the group’s four exploration companies has been structured to tap specific markets. Yet, while they may be geographically separate, the companies have the advantage of sharing geological and technical expertise. Notwithstanding this increasingly global focus, Brock has no intention of pulling out of his home base, British Columbia. Last year, American Bullion Minerals (VSE), over which he presides, acquired an 80% interest in the Red Chris gold-copper porphyry deposit in that province’s northwest. And to date, drill results have justified Brock’s decision to continue pursuing projects in the province.

Meanwhile, two other Brock companies — Northern Crown Mines (VSE) and Zappa Resources (VSE) — are exploring ground in Mexico and Ecuador, respectively. And a third, Columbia Gold Mines (VSE), has set its sights on prospects even farther afield — in China.

Indeed, about 60% of the group’s $10-million exploration budget for 1994-95 will be spent outside Canada. Roughly $2 million will find its way into Mexico, with Ecuador receiving $3.5 million. The remainder is earmarked for China and elsewhere.

In both Mexico and Ecuador, the company is using its experience with porphyry and epithermal deposits to prove up new finds.

Brock says the decision, in late 1990, to enter the Mexican market was based on work carried out by Canadian prospector Roy Martin, combined with local government incentives aimed at attracting foreign investment. Since then, changes to the country’s mining law have made it possible for foreign companies to own mineral titles, and the North American Free Trade Agreement was signed.

For these and other reasons, the group perceives Mexico as a land of immediate opportunity. Moreover, until recently, Mexico had not been subjected to extensive exploration by modern techniques.

Small mines built around high-grade veins have generated gold and silver in the country since the 16th century, but the potential for larger, lower-grade deposits has generally been ignored.

“Mexico is only now being explored in a modern sense,” explains Brock, referring to the technology that has led to the large, bulk-tonnage, heap-leach gold operations in the southwestern U.S.

Martin, he points out, has spent much of the past 26 years prospecting in the country. And today, the explorationist is lending his expertise to Northern Crown, which has entered the market quickly.

Brock says Mexicans, especially those in rural regions, are more comfortable working with small (as opposed to large) companies, as the bureaucracy associated with the larger companies can prevent decisions from being made quickly. “When people visit our offices, they can talk to the president on the spot,” he says.

It is estimated that 120 North American companies are currently working in Mexico. Many of these are Canadian firms with programs under way in the popular Sonora gold district, which extends for more than 600 miles along the western flank of the Sierra Madre mountain range, through Sinaloa and Sonora states.

“At one point, during the rush in 1992-93, there were more than 100 VSE-listed juniors active in the area,” Brock recalls.

Northern Crown’s strategy is to examine previously worked claims that have been abandoned. It has acquired five properties in Sonora, the two major ones being Guadalupe De Los Reyes (a 12,000-acre project encompassing 90% of the entire Guadalupe epithermal district) and Mesa Galindo (which features widespread gold and silver mineralization in a zone of altered porphyry, measuring 2 by 3 miles). Both properties are near productive mines and placer operations.

The best results have come from Guadalupe, where a prefeasibility study may be undertaken in 1995. (Less advanced is the Mesa Galindo, where drilling is expected to begin shortly.) The Zapote zone — one of four epithermal deposits on the property — is estimated to contain more than 300,000 oz. gold.

To date, 69 holes have been drilled on both the Zapote and the Noche Buena zones, where two rigs will soon begin a program of infill drilling. (The second rig will work the other two zones, as well.) The objective is to identify, by year-end, 500,000 oz. of gold reserves with an average grade of 0.05 oz. per ton.

Brock points out that Northern Crown is primarily an exploration and development company, not a mine operator. “After we reach the later stages of exploration and prefeasibility, we will look to operate with industry partners in a joint venture,” he says.

With many major companies also active in the region, finding a joint-venture partner should not be a problem, he says. A partnership with a senior would free up the company to explore Mexico further. Much of the southern region, for example, has remained virtually untouched because of its poor accessibility.

“We are operating very much on the premise that we will be playing a significant role in the exploration of Mexico,” says Brock, who, unlike the mammoth, clearly expects to be around for a long time.

— The author is a freelance writer in Vancouver, B.C.