Grade, location and drill ready silver play ‘intrigues’ analyst
Now that the Peruvian asset portfolio is taking shape, Nubian Resources Ltd. (TSXV: NBR) (“Nubian”) have decided to commence a two-phase exploration plan for its polymetallic Esquilache project. While the site contains decent gold values, it’s the silver content that has me intrigued; upwards of 292 g/t Ag over 8 meters was assayed in 2015 by the previous owners, but a remarkable 977 g/t Ag was uncovered over 2 meters (this sample also featured 4.88 g/t Au).
While Nubian also own the Rio Pampas copper/gold porphyry project, the Esquilache results are too enticing to start anywhere else. Phase I of exploration is expected to come in at about US$1.5 million and involves a 5,000 metre drill program, 3,000 metres of which pertains to a target known as Mamacocha, and 2,000 metres at Sepulveda. Successful completion of phase I would result in an NI 43-101 compliant report, representing the preliminary de-risking of the project.
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Phase II will include environmental surveys, metallurgical work and permitting applications and is projected to cost a reasonable ~US$3 million. This phase would give rise to a maiden resource estimate which together with a mine design will form part of the preliminary economic assessment, but it’s worth noting that this resource ticks all the boxes; the advanced stage exploration project is most certainly high grade, enjoys near surface mineralization, is in a great location and is entirely drill ready.
It really is no surprise that Nubian have decided to commence delineation with Esquilache; historically, the area was already a producer in the fifties and early sixties, but the project covers more than 1,600 hectares across a set of hills and valleys where more than 200 mineralized veins and breccia showings have been mapped and so there remains massive potential to work this area for many more years. As a result of the fact that this area is familiar with mining activity, the local community see it as a boon and so the risk of opposition is extremely low indeed.
Of course, continued exploration depends on the success of capital raising, but given that the prices of silver and gold turned around at the beginning of 2016 and continue to bounce upward, I anticipate no real issues sourcing individuals and institutions looking to ride the bull run through the chaotic political climate we appear to have acquired over the last few years. Once this project is producing, it could readily provide the cash necessary to launch the Rio Pampas project.
The site covers 800 hectares and is located 80 km northeast of Andahuaylas, Peru. Surface mineralization shows a strong footprint of sulphide and oxide copper mineralization. The resource is situated in an area which is host to some of Peru’s largest copper gold porphyry deposits, including Southern Peru Copper’s Los Chancas Project, the Tintaya Copper Mine, and the Las Bambas Copper Mine. A corporate reorganization was undertaken, installing valuable new key management personnel and resulting in even lower overheads than were previously detailed.
Finally, further bolstering confidence is the fact that the company only has 30,195,273 fully diluted shares (I’ve seen younger companies than Nubian with 100,000,000+ shares out), roughly a third of which are owned by insiders. It’s this sort of commitment from management that I’ve come to expect over the years from solid projects. People who have a major financial stake in a project are much more likely to manage it as effectively as possible, and Nubian’s experienced management team clearly believe in the land packages they’ve acquired.