VANCOUVER — Argentex Mining (ATX-V, AGXM-O) has announced a proposed $7.3-million private placement by the World Bank’s International Finance Corp. (IFC) that will help further the development of its Argentine polymetallic projects.
Argentex president Ken Hicks says in an interview that, not only was it the largest amount of money the company has ever raised, it also provides greater credibility.
“It’s a very solid stamp of approval on what we have down there, what we’ve accomplished, our people and organization,” says Hicks. “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 consists of one share and one warrant, with each warrant entitling the holder to buy another share for $1.34 within five years. Argentex expects to close the deal by the end of July.
Hicks says the IFC, which has invested in mining projects around the world, was available for advice. IFC can help guide the company with 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,” says Hicks.
The investment will go towards exploration as well as the development of Argentex’s flagship Pinguino zinc-lead-indium-silver-gold-copper project. The company is cur- rently working on a scoping study for Pinguino 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 says more detailed metallurgical work is 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 says with the resource in place, the company could use Pinguino as a backstop and explore more of its 790 sq. km of mineral rights in Santa Cruz province.
“It’s a huge property, a big mineralized system. I think it’s out there, we just have to go and find it,” says Hicks.
In a recent trenching program in the northwest corner of the Pinguino property, Argentex sampled 1.72 metres of 487 grams silver, 7 metres of 116.8 grams silver and 1.8 metres of 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 at 297.4 grams silver, 24.8 metres at 114.7 grams silver and 1.04 metres at 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 says the injection of funds might cause them to drill more in the coming months.
“When you get more money, you get more aggressive in what you want to do with it,” Hicks says. ” I’ve never had a problem with finding a good use for it down in Argentina. 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 explains that the big player was looking for quartz veins but almost all the mineralization on the property was covered by overburden. Only after Argentex did induced polarization geophysics did it discover the sulphide veins lurking below the surface and then the quartz veins.
“It’s a big huge long continuous vein system, completely unexposed on surface,” says 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.”