Craig Gibson
Director, President and CEO,
Prismo Metals
/
View from the Top

Mexico Hosts Unique Opportunities for Exploration Companies

By Pedro Alcalá | Mon, 03/28/2022 - 16:41

Q: What are the company's principal projects and how has the issue of concessions affected them?

A: There are two projects that we brought into the company when we went public: Palos Verdes in Sinaloa, a smaller concession but at a more advanced stage with drilling, and Los Pavitos in Sonora, a large concession at an early stage of exploration near the town of Alamos. Both projects are in strongly mineralized areas within good mining jurisdictions. The company's founders, Peter Megaw, Alain Lambert and I, have decades of experience on multiple Mexican projects, so we are confident that we can unlock their value. We have special confidence in Palos Verdes. Although it is a small project that has been little explored during the past decades, a neighboring company made an important discovery next to our concession. This convinced us that we share the same potential.

Regarding the issue of concessions, the government has not granted them regularly for some years now. However, we knew of many existing concessions from the data we collected in the past. Having a database of projects that interest us so that we could acquire them over time is key to growing in the future. In general, we are looking for larger projects with world-class potential, such as Los Pavitos.

Q: What is the potential of the Palos Verdes project and what have the results from the area shown so far?

A: In 2018, my consultant company acquired 50 percent of the project. Drilling our first holes, we obtained exciting high-grade results that confirm its high potential. In addition, Vizsla Silver, which has acquired much of the district’s remaining land and has drilled further, announced that the area hosts significant resources. Based on these combined results, we may be on top of an uneroded ore body in a multivein epithermal system. Therefore, we plan to complete a 4000m drill program to test the potential for continuation of this high-grade mineralization below the already tested levels in 1H22. We hope to find something similar to what Vizsla Silver has encountered. Even though our project is not as large as theirs, we believe that we can encounter similar potential, which would mean we possess a very lucrative project.

Q: What are your expectations for the Los Pavitos exploration program and what areas does it prioritize?

A: Los Pavitos is a large 5,300ha concession in a great Sonora mining jurisdiction, where there is much exploration activity. Our project is at a very early stage: when we acquired Los Pavitos it had a couple of small reconnaissance efforts that showed potential for high-grade gold and silver veins. Our goal for 2022 is to complete the first exploration mapping and sampling program over most of the surface, as well as identify major targets. We have already started the work and have just recently finished our second mapping period, for which we should see some results soon. This will give us an idea of the additional work required over the next few months. We expect to have the project in a drill-ready state within 1H22 and to drill it in 2H22.

Q: What value does the alliance with ProDeMin bring to Prismo Metals?

A: Minera Cascabel and ProDeMin are two successful services companies and are owned by two of the company's founders and have a lot of exploration experience. These companies help us in the advancement of projects, contracts and relations with the community, among other critical issues. Thanks to them, we have built a close relationship with our contractors. This allows us to have everything in hand to move projects forward quickly and efficiently.

Q: What has been your relationship with the ejidos around your projects and how do you think communities should be consulted about the projects?

A: We have learned that the project must always start by contacting local owners, whether they are ejidos, communities, private ranchers or parcels. Before we start, we like to make a formal agreement that allows us to keep working for as long as it might take to make a discovery. One of our main objectives during the exploration program is to maintain a good relationship with the surrounding communities. We have had experience with communities in various areas of the country, such as Sonora, Chihuahua, Oaxaca and Guerrero. Importantly, we know that each area is unique. For this reason, deeply understanding the community’s specific needs, opinions and concerns is key to approaching them and maintaining a good long-term relationship.

I believe that the community should always be consulted on projects, since the exploration’s success also depends on them. They need to be part of this process so that they are on board. Furthermore, it is important to always try and help communities with some of their most pressing problems. However, it is key that we offer longer-term solutions, sustainability, so that once the mining activity stops, they continue to generate benefits.

Q: Do you think that Mexico’s investor attractiveness is improving or that other countries like Chile are also creating uncertainty for investors?

A: It has to do with Mexico’s potential because it continues to be one of the premier exploration areas worldwide. It has very favorable geology and an overall stable political and investment environment. In recent years, its regional competitiveness has decreased slightly due to several factors, some of which are long-term problems, such as violence. In addition, uncertainty has increased because of statements by the current administration, as well as its stance on the sector and the law that governs it. For a large part, this is due to the lack of understanding of the mining industry. For the short term, there is a bit of a negative outlook for the mining sector but, in general, I think Mexico will continue to be a sound and competitive jurisdiction compared to other countries.

Q: How important do you expect 2022 to be for the company and what do you expect regarding future developments?

A: We are a relatively new company and have been working for just over a year. However, the company has a group of people who have been in the country for decades, so we have a lot of experience. For this year, our focus is to make considerable progress on our two main projects. Our financing and efforts are all focused on completing this objective. However, thanks to our experience, we can evaluate and acquire other projects if opportunities arise. Next year, we may be considering what to do next with our two projects, whether to acquire more financing. We also could be evaluating other projects in Mexico or other areas, like the US and Canada.

Prismo Metals is a growth-stage exploration company focused on the acquisition and development of high-grade silver and gold projects in North and South America.

Pedro Alcalá Pedro Alcalá Senior Journalist & Industry Analyst