Colombia, Ecuador and Peru all host prospective geological settings for mineral exploration. While they remain under-explored by modern-day standards, South America’s reputation as an established mining destination gives a head start to companies looking to develop projects in these countries.
Auryn Resources (TSX, NYSE: AUG) is an exploration-stage company with a portfolio of precious and base metals assets in the Americas.
In Peru, the company holds the Sombrero, Curibaya and Huilacollo properties.
The 1,300-sq.-km Sombrero property is located 340 km southeast of Lima and is interpreted to be on the western extension of the Andahualylas Yauri belt. The main target at the property is copper-gold skarn mineralization with four mineralized intrusive centres identified to date. In February, the company announced that it received its environmental permit for Sombrero, covering 10.3 sq. km, allowing it to drill up to 33 holes from 23 platforms on the Ccascabamba Sombrero main target area. Auryn has filed the paperwork to obtain an authorization for starting activities at the property. The company is earning an 80% interest in this project through an option agreement with Alturas Minerals (TSXV: ALT).
The wholly owned Curibaya property, at 110 sq. km, is within a copper porphyry belt host to some of the country’s largest porphyry deposits. At the end of February, Auryn announced that it has identified a new high-grade vein corridor over approximately 400 metres, within a 4 km by 4 km alteration system.
At the company’s 33-sq.-km Huilacollo project, Auryn has identified intense hydrothermal alteration consistent with epithermal gold-silver mineralization over an area of 4 km by 6 km. The company may earn a 100% interest in this property through a combination of work expenditures and cash payments.
The company’s wholly-owned Committee Bay project in Nunavut covers over 3,000 sq. km along the Committee Bay greenstone belt and is 180 km northeast of Agnico Eagle Mines’ (TSX: AEM; NYSE: AEM) Meadowbank mine. The Three Bluffs deposit at the property features indicated resources of 2.1 million tonnes grading 7.85 grams gold per tonne for a total of 524,000 oz. gold, with additional inferred resources of 2.9 million tonnes at 7.64 grams gold for 720,000 ounces. Both resource classifications include a near-surface and underground component. The deposit remains open for expansion.
At the 75-sq.-km Homestake Ridge project within northwestern B.C.’s Golden Triangle district, Auryn has defined a high-grade gold-silver deposit. Current indicated resources stand at 624,000 tonnes grading 6.25 grams gold and 47.9 grams silver for a total of 125,000 oz. gold and 1 million oz. silver. Additional inferred resources are comprised of 7.2 million tonnes at 4 grams gold and 90.9 grams silver.
Auryn Resources has a $169.5-million market capitalization.
Azincourt Energy (TSXV: AAZ) is an exploration-stage company with uranium projects in Saskatchewan and Peru.
In Peru, the company holds the Escalera group of holdings in the Puno district where three separate concessions cover a total area of 74 square kilometres. The Lituania, Condorlit and Escalera concessions feature volcanic-hosted uranium and lithium prospects within the Picotani Plateau. Minsur (BVL: MINSURI1), a Peruvian mining company, as well as Rio Tinto (NYSE: RIO; LSE: RIO), Bear Creek Mining (TSXV: BCM) and Plateau Energy Metals (TSXV: PLU) are operating and exploring in this area.
In 2018, Azincourt completed the first phase of ground work at Escalera, with sampling identifying two areas prospective for uranium mineralization with a total strike of 6.5 kilometres. Grab samples from the property assayed up to 0.95% U3O8 (uranium oxide) with a total of 11 rock samples coming in above 0.12% U3O8. The proposed uranium mineralization model for the property is similar to that at Plateau Energy Metals’ Macusani uranium deposit, located 100 km to the northwest.
In Canada, the East Preston project on the southern edge of Saskatchewan’s western Athabasca Basin covers over 250 sq. km and features a number of drill targets. This portion of the basin features near-surface targets with East Preston situated along a parallel conductive trend.
In 2017, the company entered into an option agreement with Skyharbour Resources (TSXV: SYH) and Clean Commodities (now Dixie Gold (TSXV: DG)) to acquire a 70% interest in the project by spending a total of $2.5 million and making cash payments of $1 million. This property is contiguous with NexGen Energy’s (TSX: NXE) Arrow and Fission Uranium’s (TSX: FCU) Triple R deposits.
In February, Azincourt started a drill program at East Preston, focused on electromagnetic conductors in structurally disrupted areas as well as the 7-km long Swoosh zone located 5 km southwest, a structural feature with geochemical and geophysical anomalies. Azincourt completed the first phase of drilling at the project in 2019, intersecting formations similar to those at nearby uranium deposits.
Azincourt Energy has a $3-million market capitalization.
Caldas Gold (TSXV: CGC) started trading on the TSX Venture Exchange at the end of February, following a spin-off transaction of Gran Colombia Gold’s (TSX: GCM) Marmato mining assets. Gran Colombia owns about 72% of Caldas.
The Marmato mining assets within the Zona Baja mining license, 80 km south of Medellin, include the producing Marmato underground mine, a 1,200 tonne per day processing plant as well as the area of the Deep zone mineralization below existing mine workings.
Last year, Marmato produced 25,750 oz. gold and expects production this year will be in a range of 32,000 oz. to 37,000 oz. gold.
Current resources at Marmato, updated in July 2019, stand at 23.6 million tonnes in the measured and indicated category at 3.8 grams gold per tonne for a total of 2.9 million oz. gold with a further 52.9 million tonnes inferred grading 2.6 grams gold for an additional 4.4 million oz. gold.
In October, Gran Colombia released the results of a preliminary economic assessment (PEA) for Marmato, suggesting two separate operations: the first would be the existing mine at the Upper zone with the second consisting of a new Deep zone operation underneath the Upper zone vein system. The study outlined a combined underground mine with a 19-year life, producing an average of 115,800 oz. gold a year at all-in sustaining costs of US$882 per ounce. The Deep zone would contribute 73% of the gold produced.
The initial capital outlay for development of the Deep zone was pegged at US$269 million with a resulting post-tax net present value estimate, at a 5% discount rate, of US$207 million.
The Upper zone operation extends over 300 vertical metres and runs along about 900 metres of vein structures with six production levels. The Deep zone mineralization has been traced over 600 vertical metres; based on the PEA, its extraction would require an additional 4,000 tonnes per day of processing capacity with dry-stack tailings and cemented paste backfill in mined stopes.
In March, the company announced that it extended a new zone of mineralization, discovered by Gran Colombia earlier this year and outside of the Deep zone, by over 200 metres down-plunge with an intercept of 87.15 metres of 3.9 grams gold and 1.7 grams silver; this zone is within 50 metres of planned future underground development.
A pre-feasibility study on the Deep zone expansion at Marmato is underway and is expected by mid-year. Gran Colombia acquired the Marmato assets back in 2011 as part of its merger with Medoro Resources.
Caldas Gold has a $108.6-million market capitalization.
Cornerstone Capital Resources (TSXV: CGP) is an Ecuador-focused explorer with a portfolio of properties in the country. The company’s strategy is to advance its assets through joint ventures.
The best-known of these is the Cascabel holding in northern Ecuador, where Cornerstone holds a total interest of 22.2% (SolGold (TSX: SOLG) owns 85% of Cascabel, Cornerstone also has an 8.5% stake in SolGold). The Cascabel property features the Alpala gold-enriched copper porphyry deposit with indicated resources of 2.1 billion tonnes grading 0.6% copper-equivalent for a total of 8.4 million tonnes copper and 19.4 million oz. gold. Additional inferred resources stand at 900 million tonnes at 0.35% copper-equivalent. The deposit features a high-grade core of 400 million tonnes at 1.49% copper-equivalent.
In 2019, a preliminary economic assessment (PEA) for Alpala suggested an underground block cave operation with a 55-year mine life producing an average of 207,000 tonnes copper, 438,000 oz. gold and 1.4 million oz. silver annually in the first 25 years of operation at operating costs of US$0.9 per lb. copper, after precious metals credits, for an after-tax net present value estimate of US$4.3 billion, at an 8% discount rate.
Exploration at Alpala is ongoing to update both resources and design parameters for the project, with a pre-feasibility study expected in the second quarter of this year.
Cornerstone also has a joint venture with Enami, an Ecuadorian state-owned mining company, at the Rio Magdalena, Playa Rica and Espejo properties, which lie southwest and northeast of Cascabel.
In February 2019, Cornerstone signed a farm-in and option agreement with Newcrest Mining for the Cana Brava gold-copper project in south-central Ecuador; Newcrest has the right to earn up to a 75% interest in the property.
Cornerstone also has a 12.5% interest (87.5% Sunstone Metals) in the 49-sq.-km Bramaderos concession in southwestern Ecuador’s Loja province, which is underlain by a cluster of gold-copper porphyries. A 5-km-long gold and copper in-soil anomaly has been traced at the property with additional gold-silver targets identified. Drilling is ongoing.
The company also wholly owns the 23-sq.-km Vetas Grandes property in southern Ecuador, prospective for epithermal gold-silver mineralization and the 10.4-sq.-km Bella Maria project in the southwestern part of the country, which features gold-copper targets.
Cornerstone Capital Resources has a $92.3-million market capitalization.
Gran Colombia Gold
Gran Colombia Gold (TSX: GCM) wholly owns and operates the Segovia complex of underground mines, 180 km northeast of Medellin in Colombia.
Last year, Segovia produced 214,000 oz. gold with over 200,000 oz. expected this year. At the 90-sq.-km project, three active underground operations feed the 1,500 tonne per day Maria Dama processing plant with additional ore contributed by third-party miners who work on the company’s concessions through an artisanal miner model.
The company’s operating mines at Segovia are exploiting three of the 27 known veins within the mining title with additional targets identified for follow-up exploration. Proven and probable reserves stand at 1.9 million tonnes grading 11 grams gold per tonne for a total of 700,000 oz., within measured and indicated resources of 3.5 million tonnes at 11.8 grams gold. Additional inferred resources are at 3.6 million tonnes grading 10.1 grams gold.
In February, the company announced the discovery of a new high-grade vein, the 1180 Vein, and confirmed the down-dip extension of the Manto vein by over 1,000 metres at the El Silencio mine within the Segovia complex. Intercepts included 0.95 metre of 48.39 grams gold and 55.5 grams silver from the 1180 Vein as well as 5.62 metres of 12.13 grams gold and 13.6 grams silver from the Manto vein.
The Segovia complex features high-grade mesothermal quartz-sulphide veins within a mining district that produced over 6 million oz. gold over the past 150 years. Gran Colombia acquired the Segovia assets in 2010.
Also in February, Gran Colombia completed the spin-off of the Marmato mining assets in Colombia to Caldas Gold; it retains a 72% stake in the new company.
At the end of January, the company announced a non-brokered private placement for total proceeds of up to $40 million. The offering, subscribed for the full amount, closed in early February with net proceeds intended for working capital and corporate purposes, including repurchases of the company’s listed warrants.
Gran Colombia has a $360.6-million market capitalization.
Lara Exploration (TSXV: LRA) is a company focused on generating precious, base and industrial metal prospects in South America. Lara holds pre-production projects in Chile, Brazil and Peru.
On the joint venture front, it holds interests in three properties in Brazil and Peru.
Lara has a 30% stake in the Planalto project in northern Brazil (70% Capstone Mining (TSX: CS)), which features iron oxide copper-gold (IOCG) mineralization with the option to purchase a 100% stake for total cash payments of US$500,000; it has paid US$200,000 to date. The company also has a 49% interest in the 85-sq.-km Liberdade copper project in northern Brazil’s prolific Carajas district. Chilean state-owned Codelco earned a 51% stake in the property and has elected to increase its interest by another 24% through funding additional exploration. Lara believes that there may be a large IOCG system at this site, based on exploration results received from Codelco in 2013.
Also in Brazil, Lara is earning a 100% interest for US$580,000 in the Damolandia nickel-copper-cobalt project. The 18-sq.-km property presents potential for disseminated and stringer-style sulphide mineralization.
In Peru, Lara also holds a 45% interest (55% Redzone Resources, now Global Battery Metals (TSXV: GBML)) in the Lara project, 400 km south of Lima. This 18-sq.-km property features three mineral concessions with mineralization within a quartz-diorite porphyry traced over an area of 2,000 metres by 500 metres to 800 metres.
In the royalty space, Lara has interests in three projects in Brazil, three in Peru and one in Chile.
One of these is the Celesta copper-gold mine being developed in northern Brazil, within the Curionopolis holding where the company has a 5% interest and a 2% net smelter return royalty (NSR). Lara’s joint venture partner, privately held Tessarema Resources, can earn a 100% interest in the project by putting the mine into commercial production and paying Lara US$750,000.
Peruvian royalties include the 83-sq.-km Corina gold project in southern Peru, nearby Hochschild Mining’s (LON: HOC) Pallancata and Immaculada mines and Selene mill. Lara optioned the project to Hochschild for US$4.2 million and a 2% NSR royalty.
In the Peruvian base metals space, Lara holds the Puituco and Buenos Aires zinc projects. Puituco, at 4 sq. km, is adjacent to BHP Group’s (LON: BHP) claims whereas the 16 sq. km Buenos Aires project lies 25 km northeast of Puituco.
Lara Exploration has a $22.4-million market capitalization.
Regulus Resources’ (TSXV: REG) wholly owns the AntaKori copper-gold project in Peru’s Yanacocha-Hualgayoc mining district.
The company acquired AntaKori in 2014 through a merger with Southern Legacy and has been drilling at the project since 2017.
AntaKori is just north of the operating Tantahuatay and Cerro Corona mines. Compania Minera Coimolache’s Tantahuatay gold mine (40% held by Buenaventura (BMV: BVNN) who is the project operator, 44% Southern Copper (NYSE: SCCO) and 16% ESPRO, a private company) is a heap leach gold-silver operation, mining the oxide cap of an extensive copper-gold sulphide resource. Gold Fields’ (NYSE; JSE: GFI) 100%-owned Cerro Corona is a gold-copper mine, where a porphyry deposit feeds a 20,000 tonne per day concentrator.
In 2017, Regulus finalized a definitive agreement with the owners of the Coimolache grounds to the southwest (which include the Tantahuatay mine), allowing it to see all of the drilling on the agreement grounds with mutual rights of access. In 2017, the company also entered into an agreement with Buenaventura regarding the Colquirrumi grounds to the northeast of AntaKori, allowing it to earn up to a 70% interest in this area by drilling 7,500 metres within three years of obtaining the required permits. Buenaventura retains a one-time option to claw back to 70% by paying Regulus US$9 million, leaving it with a 30% interest.
In March 2019, Regulus released an updated resource estimate for AntaKori with indicated resources of 250 million tonnes grading 0.74% copper-equivalent for a total of 4.1 billion lb. of copper-equivalent with a further 267 million inferred tonnes grading 0.66% copper-equivalent for an additional 3.9 billion lb. of the base metal equivalent. The conceptual pit, both on Regulus and Coimolache grounds (with reported resources only on the Regulus wholly owned area), includes high-grade, near-surface mineralization with an overall strip ratio of 0.85 to 1.
Drilling to date has been focused on the southern claims at the project with additional targets for potential skarn and porphyry mineralization identified to the north. In January, Regulus released the results of drilling at AntaKori, which extended the known zones of mineralization. Intercepts of note included 341 metres of 0.85% copper-equivalent and 168 metres of 1.15% copper-equivalent.
This year, the company plans to continue with drilling at AntaKori, complete metallurgical test work to optimize the resource flowsheet and test geophysical targets at Anta Norte. An updated resource is currently expected by the end of the year.
AntaKori mineralization is a copper-gold skarn in sedimentary rocks with a potential porphyry centre to the north, and a high sulphidation epithermal system that developed in overlying volcanic rocks to the south.
Regulus was formed in 2010 with the former management of Antares Minerals (acquired by First Quantum (TSX: FM) the same year for $460 million). The company is the result of a spin-out of assets following the Antares acquisition.
Regulus Resources has an $81.5-million market capitalization.
Sierra Metals (TSX: SMT; NYSE: SMTS) operates the Yauricocha, Bolivar and Cusi mines in Mexico and Peru, producing silver, copper, lead, zinc and gold.
The company’s largest production contributor is the 82%-owned Yauricocha underground mine in Peru’s Yauyos province, which produced 188 million lb. zinc-equivalent last year at all-in sustaining costs of US$0.88 per lb. and has been operating since 1948. This year, the Yauricocha mill is expected to increase its capacity to 3,600 tonnes per day, up from 3,150 tonnes per day currently. Ongoing exploration at the operation has traced zones of mineralization that is higher grade and wider than suggested by the current resource model. Sierra has also identified additional prospective areas at depth and extending laterally out from the current mine workings, which are contained within a 180-sq.-km land package.
The company’s wholly owned underground Bolivar mine in Mexico’s Chihuahua state generated 27 million lb. copper equivalent last year at AISCs of US$2.09 per lb. The 5,000 tonne per day operation sits within a 152-sq.-km land holding, with Sierra exploring and developing additional targets at the property. Beyond Bolivar, the company holds an additional 748 sq. km of ground in the country.
Also in Mexico, the company’s 100%-owned Cusi mine in Chihuahua state churned out 1 million oz. silver equivalent last year at AISCs of US$20.70 per oz. The underground operation, feeding a 1,200 tonne per day mill, sits within a 117 sq. km land holding. Sierra’s grounds cover a 12 km-long stretch of the prospective Cusi fault, a 64 km regional structure. The company’s focus at the property is on infill and definition drilling.
This year, on a company-wide basis, Sierra expects to produce 331.1 million lb. to 371.2 million lb. zinc equivalent; AISCs at Yauricocha are expected at US$0.77 per lb. zinc-equivalent.
Sierra Metals has a $324.6-million market capitalization.