Cascadero’s JV Partner Discovers Potential Epithermal Gold System
I just cannot get myself to sell or quite give up on this one.
Normally, I just pick ‘em. But I rolled my sleeves up on this one. The Captain, Bill McWilliam, approached me in 2014 to help him survive the dissolution of their previous partnership and joint venture on the two dozen or so mineral prospects in Argentina that were going to be back in Cascadero’s hands (100%) soon after.
After recovering those interests and reorganizing the corporate and capital structures, it formed a new deal with private investor Regberg, giving Regberg 30% for a half million upfront plus a few further obligations.
When I got involved it was a distressed case. Not as bad as now. Now it’s lifeless. At least then it still had a believer on the bridge, and he and his partners were passionate about a few things. One of them was the land they controlled surrounding First Quantum’s Taca Taca mine, a “high-potential copper-gold-molybdenum porphyry deposit in an advanced exploration phase… located in Salta Province in north west Argentina, 230 km west of the city of Salta and 55 km east of the Chilean coast.” First Quantum acquired Taca Taca in 2014 from Lumina for something like $600 million after Lumina reported measured and indicated resources at 9.6 million tonnes of contained copper, with inferred resources of 3.4 million tonnes of contained copper.
That has since been reduced a bit. In 2020 they reported an M&I resource containing 9.5 million tonnes of copper, 6 million ounces of low grade gold, and 264,000 tonnes of Molybdenum. An economic analysis in 2021 saw a huge project lasting decades that returned an NPV of over $3 billion at $3 copper and $1500 gold.
But there are two obstacles in First Quantum’s way.
One is the politics of Argentina (bad). First Quantum is negotiating with the government on construction and ways to minimize their potential extortion fees. The second obstacle involves Cascadero, and involves one of the concessions jointly held with Cascadero adjacent to the Taca Taca mine, and controlled by Cascadero and partners. McWilliam and former management had calculated that Taca Taca didn’t have enough room on its 100% owned claims to deal with the massive amount of waste it was going to generate over the 30 years.
And since Cascadero had surrounded Taca Taca, there are few options other than to buy Cascadero’s claims outright. But First Quantum and Bill have had their misgivings, and were too far apart to strike a deal.
This problem has never been rejected or solved. It could still be an obstacle.
Either way, porphyry systems occur in clusters. It is a well known fact. Sometimes dozens in a cluster.
But Lumina never explored the surrounding ground. Neither did First Quantum. And my plan to mobilize the company to drill its defined targets in 2017 met with resistance and distractions with regard to board politics.
And before you knew it, it was over. Husband and wife passed. I’m sorry to say. Bill was a tough cat. It was his way or the highway. That prevented him from making the deals he needed on favorable terms. And it caused a lot of chaos. But when he got his teeth into something, he would never let go. I miss that determination.
At the end of 2019, the family trust farmed out some of those properties surrounding Taca Taca to Golden Minerals (AUMN) in exchange for cash and exploration or some work commitments over 3-4 years.
We are on year number three.
Golden started drilling one of the Sarita Este targets last summer and reported on them in January this year.
To repeat this part, it drilled 10 core holes totalling 2,518 meters and came up with some whiffs (a few of mineable intercepts between 4 and 10 meters grading almost 2 grams gold and some silver) of an epithermal gold target and one smell of a copper porphyry. Although the grades were low, that was the first ever drilling and is interpreted to potentially represent a “shallow oxide-gold, epithermal-style mineralization at the Sico target, and oxide and supergene enriched copper-porphyry style mineralization at the Kachi target.”
Golden Minerals announced then that, “Six holes totalling 1,020 meters were drilled exploring a series of gold-bearing epithermal structures identified by surface mapping and sampling conducted in 2020 that returned grades up to 162 g/t Au at surface. The drill holes intersected multiple wide zones of near-surface oxide-gold mineralization, indicating the area has the potential to host a large bulk tonnage gold deposit. New permits have been submitted for trenching and additional drilling that the Company plans to complete during a 2022 field campaign.” However, the drill program produced no mine making drill intercept.
Last week, Golden reported assays from the first batch of holes on its second phase at the Sarita Este property where it drilled 22 holes (diamond core holes) more recently, leaving another 12 holes in the pipeline. And the first batch of assays isn’t bad. Most even started right from surface. A couple of them missed entirely. A few of them were very skinny (less than 2m) in width. But a few of them returned decent numbers, including their best intercept so far, mineralized over 52.5 meters at 1.5 grams per tonne gold and a few grams silver.
There was also a 20 meter interval with similar grades and then one 5 meter intercept, also around 1.65 grams per tonne gold, and one that was just 2.2 meters but very high grade - almost an ounce per tonne.
You can get the full news release here,
https://www.goldenminerals.com/news/2022/golden-minerals-drills-525m-grading-149-gt-au-at-sarita-este-prospect-in-argentina
Keep in mind, I am not recommending Golden Minerals.
The interesting thing about the intercepts, however, is that the distribution of mineralization seems not to vary too much within the interval. This is a good sign. Golden states that, “Initial results for the second drill campaign at the Sico epithermal deposit continue to show strong potential for a shallow economic oxide gold deposit. Assays are pending on the results from drilling to the west of the discovery hole and we are planning a follow-up drill campaign to start in mid-August to continue delineating the deposit.”
Although it’s early it is nice to see them follow through and potentially be making a discovery.
We should see the remainder of the results soon. And who knows. But CCD shareholders have a 70% interest in the 49% that Golden Minerals does not control. Golden is still earning in under the agreement, to be sure, but if they discover a 2-3 million ounce open pittable oxide deposit First Quantum’s ears will perk up because its operation badly needs better gold grades than the 0.09 grams per tonne at the Taca Taca mine next door.
I’ve given up on Cascadero. I still own my shares. But it has no leadership and badly needs someone to raise money for it, and to lead it somewhere. Right now it is relying on its joint venture partners to do everything.
And that can only lead to exploitive acquisitions.
A ~34% interest in a ~$200 million gold asset, if that’s the outcome, which is a small gold deposit by most measures, would still deliver returns of 20, 30, or even 50 fold from its current 1 or 2 cent share price.
That would be the low end of its potential since they could also find a giant porphyry and suddenly this is a $2 stock. But the odds are low. Possible but low. They are good in the long term but low in the short term.
But I haven’t even told you about the asset that drew me originally. Its cesium target. Cesium is in short supply. Nobody is mining it in large quantities anymore since the Canadian mine TANCO shut down.
The geologist who discovered Cascadero’s Taron showing passed away too but he was an expert on Cesium and worked at TANCO in his youth. His partner and he delivered speech after speech at the Prospectors & Developers conferences on having discovered a new kind of Cesium deposit, the first of its kind, in Argentina.
I helped fund its drilling but they focused too much on the area of known mineralization rather than widening their search, running out of money in the process. The family who inherited the control blocks has been increasing its position. In a recent rights offering, they (Harder) increased their core holdings to just under 20% while another group (Incor) acquired up to about 22%. So between just those two, almost half of the stock is locked up. This still makes for a huge incentive for them to do something with this company.
Another reason I can’t quite throw in the towel.
It may be destined for a rollback, who knows at this point, they are not very transparent.
I told you recently that I was going to remove Cascadero from our recommended list. But these drill results keep the story alive. With the stock trading at 1.5 cents and a market cap of under $5 million it’s too hard to let go. I can’t recommend bidding this thing up over this news. But it may be worth a gamble under 3 cents.
Let’s see what happens here next!
