HORCONI spoke briefly with Craig Gibson today. He does not agree with my assessment of the latest results from Horcon. Craig is one of the best and brightest geologists in Mexico, so I think his opinion carries more clout than mine.
To paraphrase, Craig is bullish on the drill results. He stated they were able to define a narrow high grade zone, with a wider halo of lower grade mineralization that is potentially bulk mineable. He pointed out that 12m of 1% Zn is probably economic on its own, and the other silver and gold credits would just make it more so. They only had 5 drill cores to punch in, so they opted to run a few low-angle holes to target the extension below historic workings. They also went into the old workings and sampled the exposed vein surfaces. Between the drill cores and the sampling, Craig thinks they have outlined a potential mineral block that could be put into small scale production of roughtly 200-500 tpd and trucked into Guanajuato for contract milling.
My point of view is that the economics of such an ore zone would be marginal at best. Add in contract mining and contract milling costs, plus trucking costs even to a nearby mill, and then consider that not all the metals will be recovered, and you just will not have enough money from that ore to make it worthwhile.
That does not mean the results have no value. It just means that they have more work to do, perhaps drilling deeper or establishing other near surface mineralization. This was the first pass on a large property. It is a good start.
When I refered to the results as a 'miss' I should put that into greater context, since to my mind I expected that they would encounter narrow zones of lower grade ore. That much was evident just from the early phase surface work. That much is also to be expected considering the other projects in the district that are also encountering similar mineralization. For me to get excited about this phase, I would have had to see something of higher grade across 2m or more. So we did not get that, but it does not make the project a writeoff, or a disappointment. It just means more work needs to get done.
EXM has so many excellent projects that we almost have an embarassment of riches. Horcon will no doubt gets its day in the sun when they can go back and follow up on what they learned in the first pass. I would also think the prospect is more attractive now for a potential JV partner to step up and make an offer.
I am usually criticized as being overly optimistic for my opinion. I must say it is refreshing to know that I am coming across as overly conservative this time. For the record, I have never sold a share of this company, and have no plans to buy any more either at this time.
cheers!
COACH247
Voluntary disclosure: EXM is a paid advertiser on my website.