Canadian Junior Revives Centuries Old Silver MineWed, 10/21/2015 - 08:56
It is no secret that junior exploration companies experienced a tumultuous year in 2014. But while Defiance Silver is one such company, it retains high expectations for the future, thanks to a combination of the right project, the right location, and the right support. Defiance is engaged in the acquisition of advanced silver exploration projects in Mexico, and lists its principle asset as the San Acacio Mine, located in the historic Zacatecas silver district of central Mexico.
San Acacio is a vein project that has produced over 100 million ounces of silver during its 500-year production history. It has also undergone almost no modern exploration, apart from a brief drilling program in the mid-nineties, and has never been drilled below 200m in any significant way. Essentially, San Acacio is in the same situation that Capstone Mining’s Cozamin mine found itself in during 2004. Cozamin was an older mine and mill combination that Capstone brought back into production as well as performing modern exploration to expand the resource space. “Capstone now carries that resource down to 600m on the main vein and 1,000m on the footwall vein,” explains Bruce Winfield, President and CEO of Defiance Silver. “That is what we see in the future of San Acacio; a tremendous upside, both down dip and along straights.”
In 2013, Defiance had set its sights on getting the environmental impact assessment and land use change permit for its San Acacio project. However, that December, it decided to drop the option on a processing plant in order to concentrate fully on increasing the size of San Acacio’s resources. This change was coupled with a US$1 million dollar finance deal with the Windermere fund in March 2014. With that money, Defiance was able to acquire surface rights over a good portion of the concession, as well as obtain a drilling permit. On the basis of those two developments, the company started an initial 2,000m of a permitted 5,000m drilling program in December 2014.
Currently in an acquisition phase, San Acacio is available for Defiance to purchase from the current owners, the Mesta family. This family re-allocated the claims to San Acacio in the mid-1930s, after the project was shut down during the Mexican revolution in 1910. The family successfully treated a series of surface dumps and performed some exceptional work on the property, but was lacking the required capital to invest in any major drilling programs to expand their resource space. This is where Defiance comes in.
Mirroring the startup situations of most junior Canadian silver producers during the period between 2003 and 2005, Defiance is entering the historic site with the intention to apply capital and modern mining expertise in order to exploit the resource. “Companies like Great Panther, First Majestic, Endeavor Silver, Impact Silver, and Scorpio Mining all followed this strategy, and we certainly plan to follow the same route,” states Winfield. “We already have a resource of approximately 16 million ounces of silver indicated and inferred, and we see the ability to grow that resource with reasonable potential to reach the sum of 100 or 150 million ounces, although that is still to be proven.” To enable Defiance to unlock San Acacio’s true potential, Winfield estimates that, on top of the 5,000m drill program the company has already secured, it would need another 15,000-20,000m to achieve that goal. He continues by stressing how advanced the property is, as well as highlighting the interesting facts about the Veta Grande vein. “Veta Grande is massive, the vein system spans to a depth of approximately 335m and extends up to 5.6km along the strike on the San Ignacio complex. The historic operations covered 65% of the Veta Grande veins system which has produced over 200 million ounces of silver since it was first discovered in 1546. This is most certainly not a grassroots property.”
Of course, Winfield is aware that junior exploration is a tough environment to operate in, and is grateful for the financial and professional assistance that Defiance is receiving. “Fortunately for Defiance, the Windermere fund recognized that the San Acacio project was a major asset, and their cash injection has been of great importance to the company. With that funding, we are now able to survive and carry out the work, but also to drill on the property, which is exciting because not many juniors are drilling at the moment.” In the near future, Defiance plans to continue aggressively exploring the San Acacio Mine and expand the current mineral resource to support development of a large, modern silver mine. “Substantially increasing the resources is the main goal,” states Winfield. “Once we reach a critical level of somewhere between 35- 50 million ounces, we would also look at the possibility of putting a mine into production, and even bringing the San Acacio mine back into production if the mining climate is appropriate. A resource like that would certainly support a 1,000 t/d operation, which would produce in excess of 1 million ounces of silver a year.”