Matthew Hughes found the Martha silver deposit while looking out the window of his pick-up truck.
It had just rained and a red line streaked across the dirt road in southern Argentina’s Deseado Massif.
The geologist stopped and took 10 samples. Nine had no value but one returned 500 grams of silver per tonne.
He took 30 more samples — one of which graded 5,000 grams silver — and then drilled a hole that returned a 6-metre intercept averaging 260,000 grams silver.
“The core came out almost blood red — it was the most beautiful thing I have ever seen come out of the ground,” recalls Hughes, who at the time of the discovery was working as a senior geologist for Yamana Resources, now called Yamana Gold (TSX: YRI; NYSE: AUY; LSE: YAU).
“It was the Mina Martha vein and we just followed it up into the hills, which were two football fields away, and it turned into a more massive vein, and that was it,” Hughes says. “For a geologist it’s a dream come true, and I didn’t even have to get out of my truck to find it.”
Yamana went on to build an underground mine at Martha and started direct-shipping ore from the mining operation to Quebec in late 1999, or early 2000. The average grade mined, Hughes says, was 2% silver, or 20,000 grams silver per tonne.
“When it started it was the richest silver mine in the world,” he says. “We threw 5,000 grams silver per tonne into the waste dumps — that was our cut-off grade.”
Yamana sold Martha in 2001 to Coeur d’Alene Mines Corp., now Coeur Mining (TSX: CDM; NYSE: CDE).
“The first winter Yamana had an absolutely bizarre snowstorm and the mine had to close — and they weren’t doing well at the time,” Hughes says of his former employer, explaining its rationale for the sale to Coeur.
After Coeur acquired Martha it “made a killing” shipping ore from the mine to processing facilities at its Cerro Bayo mine in Chile, Hughes says, until the provincial government of Argentina’s Santa Cruz province put pressure on the silver miner to process the ore locally. Coeur then spent $17 million to build a flotation mill and tailings facility, Hughes says.
The mine last produced silver in 2012, and according to Coeur’s 2013 annual report, Martha’s measured and indicated resources at the end of that year stood at 57,000 short tons grading 13.60 grams silver for 775,000 contained oz. silver. Inferred resources measured 204,000 short tons grading 4.75 grams silver for 969,000 oz. silver.
In early May Hunt Mining (TSXV: HMX) bought the Martha mine and mill from Coeur for US$2.7 million, and founder and CEO Tim Hunt expects to recommission the mill and put the mine back into production before year-end.
The company has also hired Leon Hardy as its chief operating officer. Hardy, an engineer, is a former chief operating officer and senior vice-president at Coeur, and spent five years in Argentina overseeing the initial start-up of the Martha mill through to full-scale operations from mid-2007 until 2012.
The Martha mine and mill complex is within trucking distance of Hunt Mining’s La Josefina and La Valenciana projects, 110 km north.
“Martha is a key asset in our portfolio that can support us going forward,” Hunt says in a telephone interview from Liberty Lake in Washington state. “Not only do we have our existing properties where we have a phenomenal amount of production opportunity, but we are looking at developing resources that are still at Martha.” (The bottom of the underground mine workings sit at 300 metres below surface.)
Hunt says Coeur produced more than 25 million oz. silver and 25,000 oz. gold at Martha, and the complex comes with infrastructure investments worth over US$30 million, including a lab, offices, warehouses and a 60-person camp. Hunt Mining also has full access to explore the 350 sq. km property.
Hughes notes that Santa Cruz is “probably the best jurisdiction in the world, in terms of mineral access,” and that the state — roughly the size of Nevada — is underpopulated, with 90% of people living in just two cities.
“There are more operating mines and discoveries in Santa Cruz than all of the other provinces combined in Argentina,” Hughes says, adding that the discovery potential “is probably the best in the world, because the geology is absolutely straightforward.”
He says that “it’s not like Nevada where you get crust faulting and strange stratigraphy, and all that weird stuff. There are just straightforward, epithermal vein systems, and epithermal bulk-mineable projects are our expertise.”
Other mines and projects in the district include Pan American Silver’s (TSX: PAA; NASDAQ: PAAS) Manantial Espejo silver-gold mine (30 km from Martha); AngloGold Ashanti’s (NYSE: AU) Cerro Vanguardia gold mine (105 km from Martha); Goldcorp’s (TSX: G; NYSE: GG) Cerro Negro gold mine (170 km from Martha); McEwen Mining (TSX: MUX; NYSE: MUX) and Hochschild Mining’s San Jose gold-silver mine (220 km from Martha); and Yamana Gold’s Cerro Moro gold-silver development project (260 km from Martha).
Hunt notes that he and Hughes looked at more than 50 properties throughout Alaska and North and South America before concentrating on Santa Cruz in 2006. The company then hired local geologist Danilo Silva as its general manager for Argentina. Silva had previously worked as a senior geologist at Yamana Resources and Buenaventura, among other companies, and like Hughes, had several discoveries under his belt. (Silva and Hughes found the Don Nicolas and Martinetas deposits. Don Nicolas is 100 km west of Martha, and Martinetas is 70 km west.)
In 2007, Hunt Mining acquired its advanced-stage La Josefina silver-gold project, adding its La Valenciana project in late 2012. Since setting up in the province a decade ago, the company has drilled 64,000 metres, carried out 416 line km of induced polarization geophysical surveys and taken more than 20,000 surface soil, sediment, channel, chip and trench samples at its properties.
The company is one of the largest landholders in the region, it says, with mineral rights to more than 31 properties over 2,867 sq. km. Hunt says that the company — which listed on the TSX Venture Exchange in 2009 — plans to spend $15 million on exploration across its property portfolio over the next five years.
“We like the wide open country of Santa Cruz and the fact that it hasn’t had much modern exploration, with the exception of the last 25 years,” Hunt says. “There were just a couple of mines when we got there in 2006, and now you’ve got a number of them … and we’re going to be the next producer.”