Cerro Caliche on Track for Near-Term Gold ProductionBy Paloma Duran | Thu, 07/15/2021 - 17:11
Sonoro Gold Corp. is on track to transition from an exploration company to a producing company in 2022 thanks to its Cerro Caliche Gold Project in Sonora, which is expected to begin gold production during the first half of the year. This should not come as a surprise knowing that every member of the company’s senior management team has over 35 years of experience in the development of successful mines. And similar to some of its past successes, Cerro Caliche could become among the most important gold-producing operations in Mexico.
Sonoro is a publicly traded, junior exploration and development company. The company has two valuable assets in Mexico: the Cerro Caliche Gold Project and the San Marcial Gold and Silver Project, both located in Sonora.
Its flagship Cerro Caliche project is strategically located in the municipality of Cucurpe, between two mining districts: the Sierra Madre Gold Belt and the Sonora-Mojave Megashear. The region is well known for its rich gold endowment – there are already three gold mines or deposits in the vicinity of Cerro Caliche: The Mercedes Mine, Cerro Prieto and Santa Gertrudis. In 2019, Sonoro completed an NI-43-101 technical report for Cerro Caliche. It was based on the approximately 22,000m of drilling that had been completed up until then. Using a 0.25 g/t gold equivalent cut-off grade, the technical report estimated an inferred mineral resource “of 11.5M tons at an average grade of 0.495 g/t gold and 4.3 g/t silver.”
Since September 2020, another 25,000m has been drilled, expanding the company’s database to more than 47,000m. This enlarged dataset will form the basis of a new NI 43-101 resource report and a Preliminary Economic Assessment (PEA) regarding Sonoro’s conceptual but rapidly crystalizing plans to begin gold production. Sonoro expects the report will be released sometime in August.
The company's recently concluded drilling campaign has confirmed a broadly mineralized 4km-long NW trending low-sulfidation epithermal vein structure, which contains multiple zones of gold mineralization along the trend and close to the surface.
In addition, the program has shown the possibility of a strategic extension of four key mineralized gold zones within a northwesterly trend, which is characteristic of the region. Last May, the company announced the completion of its Phase 3 drilling program, in which test results from the last nine RC drill holes demonstrated a coalescence of two major zones: Japoneses and Buena Suerte. The company is excited because of the potential to merge the two zones into a single body of shallow, oxide gold mineralization. If this turns out to be the case, it could mean a single mining pit for the two zones and, as a consequence, the likelihood of a substantial increase in recoverable gold, together with a significant decrease in mining costs.
A key objective of the August NI 43-101 technical report and PEA is to provide the conclusions of independent and qualified contractors regarding the quantification and analysis of Cerro Caliche’s updated mineral resource and its capacity to support Sonoro’s conceptual 15,000 tpd heap leach mining operation.
D.E.N.M. Engineering Ltd. is in charge of preparing Sonoro's PEA to confirm the feasibility of costs and capital for the project. The mineral resource estimate will include drilling data through April 15 and will be done by Micon International Ltd.
McClelland Laboratories Inc. is in charge of performing the metallurgical testing. The bottle roll tests have confirmed that mineralization is amenable to cyanide leaching, with recoveries averaging 80.3 percent. Column testing is nearing completion, with results expected in August for inclusion in the technical reports.
Sonoro's drilling activities have been halted to give the exploration team time to ensure that all data and assistance is available to the independent consultants and to implement any of their recommendations in their technical reports. Drilling and construction activities are expected to resume in 3Q21 to continue expanding the mineralization and identify potential new zones.
In an interview with MBN, Melvin Herdrick, Vice President of Exploration at Sonoro Gold, said that the determining factors to start production at Cerro Caliche will be the PEA, the price of gold and production costs that are expected to be similar to other nearby mines and an environmental permit to continue developing the project. Sonoro also needs to complete a planned project debt financing, he added, for which the company must ensure that it provides the best possible information. “It is all looking very positive,” Herdrick said.
The current and future success of Cerro Caliche does not depend only on its resources and strategic location but on the company's management team, which has extensive experience in the discovery and development of mineral deposits together with operating mines.
Herdrick is one example. He has 45 years of experience in mining exploration and six copper and gold discoveries under his belt. He developed Pediment Gold’s La Colorada, which is now a major asset for Argonaut Gold. Sonoro Chairman John Darch has overseen the financing and development, acquisition or discovery and subsequent mining of major mineral assets since the 1980s. This includes Zambia’s first copper mine to be privatized and Greenland’s first gold mine. Kenneth MacLeod, President, CEO and Director has 35 years of experience as a financier, developer and operator in Africa, Asia, the US and now Mexico. Sonoro’s Operations Manager and Mining Engineer Jorge Diaz is a Glamis Gold alumnus with 40 years in mine design, construction and operations – he was the project manager for Alamos Gold’s Mulatos, overseeing its re-engineering and later expansion. Curtis Turner, Director, was a senior executive at Argonaut Gold and Yamana Gold with a focus on operations and resource financing. Steve Kenwood, P. Geo, is a Director and Sonoro’s Qualified Person for regulatory purposes; his expertise is in the area of advanced project development. Neil Maedel, Executive Director (Corporate Finance) has 30 years of experience in international venture capital and resource financing in South and North America, Asia, the former Soviet Union and Eastern Europe. James Taylor is an independent Director and has 35 years of experience as an investment adviser. Sonoro’s CFO is Salil Dhaumya, a CPA, CMA who for the past 25 years has acted as a Controller or CFO for companies with activities in Mexico, the US and Canada. It adds up to a management team ready to drive Sonoro’s success.