Junior Exploration Firm Casts Out Wide NetWed, 10/21/2015 - 13:30
With a global mining market that is not shining on junior companies, mainstream advice would be for them to tighten their belts and focus their exploration on limited areas. Garibaldi Resources (Garibaldi) has rejected this trend, focusing its searches on a 3,500km2 area of the Sierra Madre. Steve Regoci, CEO of Garibaldi Resources, explains why it made sense to do so, both economically and time-wise. “We are one of the first juniors to do hyperspectral surveys in Mexico. We flew over our properties and over all the deposits that had been discovered nearby, such as the Pinos Altos and Ocampo deposits. It was a comparative analysis which allowed us to look at their gold deposits and see if we had similar signatures in our properties. This proved very helpful in shortening the exploration curve, which would have cost many millions of dollars over many years. We can now start work on drill-ready targets much sooner,” he explains.
The search was a good move from a business standpoint. Garibaldi flew its searches at below the altitude that required permission from Mexican authorities. Another benefit was that the company was then able to sell its proprietary data to Agnico Eagle and other companies, enabling it to recoup half the cost of the survey. “Our task is to manage the shareholders’ money as cost effectively as we can,” says Regoci. “The survey allowed us to focus on those areas of our property with a high signature, enabling us to prioritize targets and save a lot of exploration dollars.” Despite carrying out searches over a large area, Garibaldi was naturally anxious to focus on drill-ready targets. It now has one test drill in place at Locust, one of its larger targets in Sonora, and is about to begin a sequential process of drilling into all its valuable deposits. Regoci says that this drilling activity has had a positive impact on share prices since Garibaldi managed to remain active through the downturn
Although stock prices are buoyed by drilling activity, the time has come to move toward results. Regoci outlines how Garibaldi is performing on that front. “Our drill program at Locust is a porphyry copper-gold deposit. While looking for epithermal gold, we occasionally find traces of porphyry copper, depending on how deep we drill. The Iris project, in the northwest corner of Minera Frisco’s Ocampo mine, is also interesting, as it is near Agnico Eagle’s Pinos Altos gold-silver mine that entered production a couple of years ago. Additionally, Rodadero is another project for which we are seeking permitting, given the high silver grades found there during our first drilling,” he says. Despite this success, the company is also looking to put some of its larger projects through a reduction phase. It will significantly reduce Rodadero around its most promising drill targets, giving it a silvergold focus, as opposed to gold-silver. “We definitely wanted something in our portfolio that was more silvercentric,” explains Regoci. In fulfilling of all of these projects, Garibaldi Resources has been able to count on the support of ProDeMin, whose technical director Craig Gibson is also a company director for Garibaldi.
Since Garibaldi has its own drill rig and employs experienced staff for drilling, it can proceed directly without the need for external support, giving it a distinct advantage over other junior companies. Regoci states that the company acquired its drill when it first got into Mexico, due to how busy the market was and the difficulties involved in finding a drill to use in the country. “Drilling contracts at the time were very expensive. Even if you could find an available drill, it could take up to six months to schedule a time for drilling. We managed to secure a very good deal on a drill, which we now use as a test drill in the process of discovering or eliminating targets. It is far more cost-effective to do so than committing to a 3,000m drill program that we might end up regretting. We have been able to drill at US$65 a meter using our own equipment,” he explains. After all, drilling remains the core of the company’s operations. Regoci admits that the potential to become a producer is there but he says that it is not Garibaldi’s focus for the time being. Instead, it prefers to find a larger company to take on any economically viable deposit it finds. La Patilla in Sinaloa, with its near-term potential, has been identified as Garibaldi’s best bet for increasing cash flow.
The junior exploration company is also keen on finding new ways to improve its drilling operations. “Globally, the most obvious deposits have been found, so the techniques for unearthing undiscovered deposits will definitely need to be cutting-edge,” Regoci says. Garibaldi is currently looking at various technologies to assess their utility and economic benefits. Pieces of portable analytical equipment, such as portable XRF analyzers, are high on its wish list, with Regoci disclosing that Garibaldi is looking at the cost-benefits of the analyzers. “They use the same kind of spectrometers as those used during our hyperspectral surveys. It is essentially the same technology.” He is also considering the use of MMI (mobile metal ions) for hidden deposits, after this option has proven its effectiveness in Australia.