Reputation Precedes Junior MinerWed, 10/18/2017 - 15:50
In mining exploration, reputation is key. Having worked in the Arctic and in the US and Canada, David Duncan and his team at Oceanus Resources have a great deal of expertise in exploration. While in West Africa, the team discovered and built four major mines in four different countries. “When it came time to enter Mexico, people knew who we were,” he says.
Traditionally, his homeland of Halifax, Nova Scotia is not well-known as a mining center but many exploration greats originate from there. Notably, Brad Langille and his team at GoGold Resources have a number of discoveries under their belt, including Minera Frisco’s Ocampo mine and Mulatos operated by Alamos Gold. GoGold has also just built its first mine in Chihuahua’s legendary Parral district. Today, says Duncan, the company’s Vice President Exploration, most investors look at the people involved and not just the projects. “Upon entering Mexico, we were a tiny little company but we had over 100 years of experience in discovery and building mines,” he says.
From all his time spent working across different continents and in the north of Mexico, Duncan maintains that Sonora is his favorite place to work. “Sonora is particularly favorable due to its exceptional mineral deposits, friendly mining environment and breadth of experienced technical staff across the industry,” he says.
Mexico is characterized as a predominantly silver country but Duncan shares that when the outskirts of those silver mines is examined, there is a great deal of gold potential and still a lot to be explored. Soon after arriving in the country, Oceanus stumbled across a company called El Tigre Silver that owned a 120-year-old silver concession with these similar characteristics. In 2015, the companies announced the closing of a deal in which Oceanus would acquire the company and the property.
“The property was investigated for its silver potential but when we analyzed the deposit, we thought it could be like Pinos Altos, which hides a lot more gold than silver,” he says. “For the last year or so we have been working on the project with the goal of developing 1 million ounces of gold as a starting benchmark for an open-pit.”
Because El Tigre Silver already obtained all the concessions in the eight years it owned the mine, Oceanus’ project is quickly advancing and Duncan warns that progress will be made rapidly. “Over the next year, we will make some big announcements,” he says. “Right now, we are working toward producing a prefeasibility study and this is expected to be ready in 2017. El Tigre’s first resource documents will then be ready by 3Q17 and a feasibility study is anticipated for 1Q18. This speed is unusual in the area surrounding the Sierra Madre mountains due to the topography and the high costs normally involved with these kinds of areas. The key, says Duncan, is to remain focused. “The environment requires a clear plan for finding a viable investment asset,” he says. “While there is a variety of components that can pull an explorer off-course, most of these would never have the potential to become a mine.”
As a result of this philosophy, Oceanus abandoned its first target of Durango. “Although there were very high potential gold projects, it would be very complex to try to build a mine out in the mountains,” explains Duncan. “When the money supply starts contracting, the more expensive locations unfortunately become less attractive to investors.”
But Duncan is confident that El Tigre holds the potential to attract investors to spend the required hundreds of millions of dollars to build the mine when the time comes. And this could be just around the corner. “At the beginning of next year, we will be at a serious tipping point where we will need larger investment and we will start thinking about construction of the mine,” he says.