(Image via Eloro Resources.)
Mineral commodities, especially gold, have been highly valuable among traders looking for haven assets, as the economic turbulence from the COVID-19 fallout wreaks havoc on the markets. Looking for a new horizon to explore, two countries, Peru and Bolivia, share one story in common – a great deal of historical development … but estimates suggest that there is still a great deal that awaits under the surface.
Eloro Resources Ltd. (TSX-V: ELO, OTC: ELRRF, Frankfurt: P2Q, Forum) is an exploration and mine development Company with a portfolio of gold, silver and base-metal properties, chiefly focusing on Bolivia and Peru.
In southern Bolivia, Eloro has an option to acquire a 99% interest in the highly prospective Iska Iska Property, which can be
classified as a polymetallic epithermal-porphyry complex, a significant mineral deposit type in the country’s Potosí Department. Eloro has completed a
NI 43-101 Technical Report on Iska Iska, which is a road-accessible, royalty-free property.
In the North-Central Mineral Belt of Peru, Eloro also owns an 82% interest in the La Victoria Gold / Silver Project, located roughly 50 km south of the Lagunas Norte Gold Mine owned by
Barrick Gold Corp. (TSX: ABX) and
Pan American Silver’s (TSX: PAAS) La Arena and Shahuindo Gold Mines. La Victoria consists of eight mining concessions and eight mining claims encompassing approximately 89 square kilometres. This project is a standout with solid infrastructure as well as access to road, water and electricity and is located at an altitude that ranges from 3,150 m to 4,400 m above sea level.
Let’s take a deeper look at the Company’s two main properties, both world-class potential plays.
In an interview with Stockhouse Editorial, Eloro CEO Tom Larsen offered some context. His own experience in resources dates back to the early 1990s in northern Ontario. He first became involved with the La Victoria Project in north central Peru back in 2014.
La Victoria Project, Peru:
The La Victoria Project is an asset in a stable, mining- friendly jurisdiction. It is also surrounded by world-class, senior gold producers
Barrick Gold, Newmont Corporation (TSX: NGT) and
Fresnillo PLC (LSE: FRES). An extensive epithermal system has already been outlined.
Drill holes had intersected a major gold-bearing low sulphidation epithermal system that has been identified over 1.5 km vertically, from 2700m elevation at Rufina to 4200m at San Markito and along strike over 3 km.
Significant drill results at Rufina include:
3.46 g Au/t over 7.4 metres
2.83 g Au/t over 1 metre
2.73 g Au/t over 1.5 metres (twice)
(Image via Eloro Resources.)
The Company’s most prospective target is the San Markito area, where ELO has a nearly 1.5km+strike length mineralized envelope outlined. The area boasts sandstone-like rock, which is common of all the major mines in the vicinity. It is very easy to drill and offers a more consistent mineralized target in the upper part of the epithermal system. The Company is working on completing the final permitting process to proceed with a 2,000m drill program.
Peruvian operations tend to be very bureaucratic in nature, but Eloro Resources has a great deal of experience and passion for establishing and maintaining solid relationships with every community where it is involved. This was recognized in February 2019, when the Company won the ‘Business of the Year’ award from the Peruvian - Canadian Chamber of Commerce for its “[C]ommitment to the development of Peruvian / Canadian relationships and a high degree of success in the areas of Management and Social Responsibility.
The Company is optimistic that they will be gaining permission to commence
with a maiden drilling program at San Markito by fall 2020.
Iska Iska Project, Bolivia:
(Image via Eloro Resources.)
While the Company was awaiting permission to drill its Peruvian San Markito project, Eloro Resources looked for other opportunities and found an emerging property with a great deal of unexplored potential in Bolivia that could have a lot to offer.
The Iska Iska polymetallic epithermal-porphyry project in the Potosí Department is in a very dynamic area and popped up on the Company’s radar just as the search began.
The proximity of Iska Iska to world class deposits confirms the favourable geological setting of the project. Some of these include the Silver Sand, San Bartolome, Pulacayo, San Cristobal, and San Vicente deposits.
Situated on 9 ½ square kilometres of privately owned property, Iska Iska offers rich silver results off the bat, as well as other metals in plentiful supply. This property has also never been drilled.
Home to significant potential for gold, silver, and base metal deposits in the country’s prolific South Mineral Belt, Eloro signed a Definitive Option Agreement with a private owner on Iska Iska to acquire a 99% interest in the project. This belt contains the largest historic silver deposit in the world, Cerro Rico de Potosi, producing up to 60,000 tonnes by 2018 *source: National Instrument 43-101*
This deposit has been mined for centuries and helped to underwrite the Spanish with considerable silver and tin remaining within the mines, roughly 2 billion ounces grading about 100 g/t Ag and 0.2% *source: Merwin Bernstein*
There are excellent underground workings at Iska Iska and access for underground drilling of more than 300 metres. The main, potentially economically exploitable targeted metals are gold, silver, zinc, and lead. Potential by-products include bismuth, copper, and indium.
(Image via Eloro Resources.)
Guess work is not an issue here and the Company is out to set up a drill campaign very soon. Earlier this spring, Eloro filed an
independent technical report by
Micon International Limited on SEDAR, prepared in accordance with National Instrument 43- 101 - Standards of Disclosure for Mineral Projects. This report supports Eloro’s planned exploration program at the Iska Iska project.
(Image via Eloro Resources.)
An important takeaway for investors – the ownership under the Iska Iska project plays well into the Company’s favour. In several jurisdictions around the world, companies can hit massive roadblocks when dealing with properties that fall under multiple owners, which can include government mining agencies that work to satisfy their own stakes.
In Eloro’s case, the deal here is private, the Company doesn’t have to wait for permission to move ahead, the ownership is grandfathered through. For a junior miner that doesn’t want to stretch its balance sheet, this makes for a great deal, especially if Eloro collects 40 million to 50 million tons and also adds the right partner early, its success will be compounded.
Solid capital structure:
Currently, Eloro Resources is raising cash for the Iska Iska project. In early June, Eloro announced its proposed non-brokered private placement of up to
five million units at $0.30 per unit, for proceeds of up to $1,500,000. These funds will be used for working capital purposes and to fund exploration efforts at its gold and base-metal properties. This follows recently completed financing in May 2020 by the exploration and mine development Company of 2,200,000 units for gross proceeds of
$550,000.
This helps support the strong financial backing under Eloro and demonstrates its ability to raise capital, tight capital structure with a small float, boasting an attractive market capitalization and strong shareholder support.
Looking ahead:
Pending the completion of the latest round of financing, drilling is set to happen very soon in Bolivia. The COVID-19 shutdown is still in effect in Bolivia, but its underground operations may get back into effect sooner than later, as the owners of the property also have a zinc producing project nearby that pulls from Iska Iska, meaning that once regional operations open up further in Bolivia, this part of the project can advance even further. The Company’s prediction is to travel regionally by mid-June and want to get set up for drill by late June, start drilling by late summer at Iska Iska.
Under the commercial deal, Eloro doesn’t have any minimal expenditures per year and has already put 250,000 shares of the Company toward the project. Should the Company elect to continue the project, it is another 250,000 shares in two years. If the decision is made to go all the way, that’s a flat $10 million (USD) payment with 4 ½ years to make that move. There’s no royalty on the property to dilute the investment.
With all of this in mind, leadership at Eloro Resources is very excited to commence underground work at the Iska Iska project and initiate the drilling campaign. CEO Larsen noted that he had never seen this level excitement from a technical team before.
Like many other companies eager to get back to business considering the global economic pause as we deal with the coronavirus pandemic, preparations are being made to deliver a strong news flow on all of the impending developments. This news is expected to be both plentiful and positive.
The Company also wants to deliver benefit to established shareholders and get the San Markito project moving ahead, while also spending the rest of 2020 establishing a leading platform for resource development in Bolivia and Peru.
Eloro Resources is led by a solid team that is well connected and zeroing in on potential partners to generate results, news and returns for shareholders. Investors would do well to keep watch and see what develops from this Company in the near term.
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.