Vancouver – Argentex Mining (ATX-V, AGXM-O) has announced a proposed $7.3 million private placement by the International Finance Corporation (IFC) that will help further the development of its southern Argentinean polymetallic projects.
The World Bank-associated IFC is a deep-pocketed organization that invests in private companies to foster sustainable economic growth in developing companies.
Ken Hicks, president of Argentex, said in an interview that not only was it the largest amount of money the company has ever raised, but it also provides greater credibility.
“I think it’s a very solid stamp of approval on what we have down there, what we’ve accomplished, our people and organization,” said Hicks. “I think that it is really a boost of confidence for us.”
The deal has Argentex selling 9.2 million units to the IFC at 80¢ each. Each unit will consist of one share and one warrant, with each warrant entitling the holder to buy an additional share for $1.34 for five years after the closing. Argentex expects to close the deal by the end of July.
Hicks said the IFC, which has invested in mining projects in Colombia and Peru as well as other parts of the world, was available for advice. The organization can help guide the company in terms of community relationships, the environment, health and safety and having its projects achieve world standards.
Southern Patagonia, where the company’s projects are located, is arid and remote with few economic opportunities.
“Mining is a big part of economic development down there,” said Hicks.
The investment will go towards exploration as well as the development of Argentex’s flagship Pinguino polymetallic project. The company is currently working on a scoping study for the Pinguino project that it expects to complete by the end of June.
Recent limited metallurgical testing was done on both the oxide precious metal and polymetallic sulphide mineralization found at Pinguino. Using cyanide leaching, the company achieved gold extraction of 95 – 98% and silver extraction between 74 and 96%. Lead and zinc recoveries were greater than 90%. Hicks said more detailed metallurgical work was ongoing.
The company plans further infill drilling at Pinguino to convert more of the resource to the indicated category. The current resource, released last September, contains 7.3 million indicated tonnes grading 169.64 grams silver per tonne and 35.4 million inferred tonnes grading 123.63 grams silver.
Hicks said with the resource in place, the company could use Pinguino as a backstop and explore more of its 79,000 hectares of mineral rights in Santa Cruz province.
“It’s a huge property, a big big mineralized system. I think it’s out there we just have to go and find it,” said Hicks.
In a recent trenching program in the northwest corner of the Pinguino property, Argentex sampled 1.72 metres grading 487 grams silver, 7 metres grading 116.8 grams silver and 1.8 metres grading 313.8 grams silver. Trenching on the recently discovered Isla vein returned 2 metres carrying 20.72 grams gold per tonne and 75.4 grams silver.
Meanwhile, on the Marta Norte vein, the company recently drilled 4.03 metres grading 297.4 grams silver from, 24.8 metres grading 114.7 grams silver and 1.04 metres grading 808.9 grams silver, all from less than 10 metres depth.
In the past the company used the Patagonian winter to compile data and plan for the future, but Hicks said the injection of funds might just cause them to drill more this winter.
“When you get more money, you get more aggressive in what you want to do with it,” said Hicks. “I don’t think I’ve ever had a problem with finding a good use for it down in Argentina. Really it’s a fantastic place to go and explore.”
Argentex discovered the sulphide system after acquiring the project from AngloGold Ashanti (AU-N) in 2004. Hicks explained that the big player was looking for quartz veins but almost all the mineralization on the property was covered by overburden. It was only after Argentex did induced polarization geophysics that they discovered the sulphide veins lurking below the surface.
“It’s a big huge long continuous vein system, completely unexposed on surface,” said Hicks. “So we feel like a bit of a giant killer I guess, coming into a project that a big company had before, they walked away didn’t see what’s there.”