David M. Jones
Director General
Minaurum Gold
/
View from the Top

Establishing a New Mining District in Sonora

By Alejandro Ehrenberg | Wed, 05/13/2020 - 12:52

Q: What have been the main developments at Minaurum Gold’s Alamos project?

A: Alamos, in Sonora, is our flagship project. In 2019, we completed our first major drilling plan, totaling about 19,000m, for the purpose of defining an inventory of mineralized vein systems. In 2020, we will initiate a second phase drill program designed to follow-up the successes of our first round of drilling, which included an intercept of 8 meters of 1.76 g/t silver. We hope to both confirm and expand our significant 1st round drill intercepts and expand on these with the goal of defining an economically viable silver resource.  Our new program is designed to test these in a systematic and prioritized manner.

The historical area of mining at Alamos is in a narrow corridor. We have expanded it to an area of 10km long by 8km wide in terms of total identified targets. Our ambition is to develop a silver district, not just a small area, through aggressive exploration drilling. In the meantime, our challenge is to help instill patience in the market as we systematically explore. Many companies find one high-grade vein, drill it and get good results, but it is only one vein. On the contrary, we want to go as big as possible and identify as many high-quality mineralized vein targets as we can. Markets tend to be impatient, so when a very good drill hole is found, everybody wants to see that same result over and over again. We believe that with a patient and disciplined exploration approach we will significantly enlarge the known extent of potentially economic silver mineralization at Alamos.  We hope to do this a multitude of new high-grade vein intercepts in our second phase of exploration drilling.

Q: In what stage are your Oaxaca and Guerrero projects?

A: We are in the final permitting stages of our Santa Marta volcanogenic massive sulfide project Oaxaca. It has been a bit difficult because SEMARNAT is a little more particular in their approval process than in the state of Sonora. However, we have community support and we are confident in overcoming the small permitting obstacles we have run into. All of our drillings will be done with man-portable drills, which means that it is very low impact because we do not have to build any new roads.

Our project in Guerrero is on hold. For the moment, the market does not have a favorable view of the state given the problems that, for example, Torex Gold has recently had. Security is not optimal. That is unfortunate because Guerrero’s mineral wealth is unbelievable. My experience there dates back to 1994 where for six years I was Project Manager and Chief Geologist of Teck Corporation, making the discovery of Los Filos in 1995. It was challenging work, but also enormously successful. I was directly involved with the efforts that led to the start-up of Torex Gold. It is remarkable now to think back to 1994 when there were 1 million ounces of gold known in the state, that being at Peñoles’ Bermejal project. The result of my 6 years of work with Teck was the discovery of about 4 million ounces of gold for an all-in investment of US$15 million. Now, more than 30 million ounces of gold have been discovered in the Guerrero Gold Belt, and Torex is one of the most important gold producers in Mexico.

Q: What is your approach to community engagement?

A: Sonora is relatively simple. It has a mining tradition and the land tends to be owned by a few owners, which makes negotiations easier. They generally very supportive of exploration companies wishing to work on their properties.

On the other hand, Oaxaca is one of the oldest cultures in Mexico. The Zapotecs and their neighbors are probably descended directly from the Olmec believed to be the oldest culture of Meso America. There are at least 11 indigenous languages spoken in Oaxaca, each with its respective variants. Every community there has a strong sense of identity and is rooted in its land. It is detailed and delicate process to work there. You have to gain the community’s trust and maintain it with openness and credibility over a sustained period of time. It requires a lot of effort and continuous communication. You cannot disappear for a year and then come back expecting that things will be the same. You have to actively work to counterbalance narratives from groups opposed to mining.

We make an effort to let the community know that we are working there under their permission. If we lose their trust and they want us out, we leave. A fruitful strategy we have deployed is to invite community members to visit the state’s Directorate of Mines. In that way, they have an independent conversation and gain another point of view. We also invite them to visit zones where we have already drilled so they can see first-hand that drilling’s impact on the land is minimal to zero. We often run into situations where there are preexisting conflicts within a community, and the mining project is used as an excuse to further polarize the community. Many times, it has nothing to do with opposition to mining per se.

Q: How will you monetize your projects?

A: Our strategy is to first define potential economic resources, and then either sell the company as a whole or split certain projects out into new exploration ventures, which some refer to as Spinco pure-plays. Our goal is to advance several of our projects to the point where they can be viewed as potentially economic, at which point they may be bought and developed by another company. Each of our projects has the potential to give rise to a new company. If we have continued success in Sonora, Oaxaca and Guerrero, it is very likely that we will do spinouts for projects in each of these regions, which in turn will realize greater value for our shareholders. 

Minaurum Gold is a gold and silver discovery generator. Minaurum's team members have a track record of over 300 million ounces of silver and 8 million ounces of gold discovered in Mexico. The company’s goal is to make new, district-scale mineral discoveries.

Alejandro Ehrenberg Alejandro Ehrenberg Journalist and Industry Analyst