Mining entrepreneur and investor Pierre Lassonde, Chairman and CEO of Firelight Investments, has purchased 2 million common shares of Mexico-focused Prime Mining (TSXV: PRYM), bringing his stake in the junior explorer to 11.9%.
Lassonde acquired the latest shares for “investment purposes” and now directly owns 143,000 common shares of the company, and indirectly owns another 7 million common shares and 3 million warrants, according to a press release.
Prime Mining’s flagship asset is the Los Reyes gold and silver project, 43 km southeast of Cosala in Sinaloa state. It acquired the project from Vista Gold (TSX: VGZ; NYSE-AM: VGZ) in 2019.
In April 2020, ten months after picking up the project, Prime Mining completed an in-pit oxide resource estimate on Los Reyes, outlining a measured and indicated resource of 19.8 million tonnes grading 1 gram gold per tonne and 26.1 grams silver per tonne for 633,000 oz. of contained gold and 16.6 million oz. of silver. Inferred resources stand at 7.1 million tonnes grading 0.78 gram gold per tonne and 29.9 grams silver per tonne for 179,000 oz. gold and 6.8 million silver ounces. The resource was based on a cut-off grade of 0.22 gram gold per tonne and is open along strike and at depth.
The company amended its option agreement with Vista Gold in July 2020 by cancelling all of Vista’s net smelter return royalty and back-in rights in consideration for accelerating a final US$1.5 million option payment owing to Vista and completing a series of additional cash payments totalling US$2.1 million.
According to the company, Los Reyes was on track to become a heap leach mine in 1998 but was mothballed when gold prices fell. It also notes that previous owners have spent more than US$20 million on exploration and engineering work on the project over the last 25 years and seven open-pit deposits have been delineated on the property.
In addition, Prime Mining says there are eight to ten new and underexplored surface discoveries ready for drill testing.
The company said work to date “has been conducted over less than 40% of the known structures,” adding that “the depth potential of what is essentially an intact epithermal gold-silver system has been inadequately explored” and “this leaves significant opportunities to materially expand known resources.”
Prime Mining kicked off a 15,000 metre phase one drill program in December that it expects to complete in the first half of 2021.
The company says it hopes to achieve a number of objectives during the drill program, including expanding the in-pit resources along strike and down-dip; infill areas to move inferred resources into the indicated category; and obtain silver assay data that is lacking in the historic reverse-circulation drill data.
In addition it plans to target deeper sections for extensions and higher grade material; and target undrilled mineralized structures. It then plans to re-model the Los Reyes deposit during the rainy season, which runs from June to October, and develop additional resource expansion targets.
Los Reyes is typical of low sulphidation epithermal gold/silver systems, the company says.
Over the last year, the junior has traded in a range of 25¢ and $2.80 per share and at presstime in Toronto was trading at $2.46 per share. Prime Mining has about 86 million common shares outstanding for a market cap of about $211 million.