Santa
Catalina, Jujuy Province, Argentina – It's a fair hitch up to where we
were in the heights of the Andes, a two-hour flight north out of Buenos Aires
to the high plains of Jujuy, an easy four hours' drive further north across
the Tropic of Capricorn on the freeway to La Quiaca,
then another two hours' run up along wide gravel roads (we call such roads
“improved highways” here in Idaho) to Santa Catalina, beyond
which, still along a very passable road, is a mine called the El Torno, which began yielding gold to the natives perhaps a
millennium ago, sat idle for awhile, got poked with good results by Puma and Penoles not even a decade ago, and now is in the hands of
a seriously inexpensive but heavily talented company called Soltera, the naming of which is a pleasant story, and the
CEO of which is a delight to meet.
The
high plains of Jujuy
(pronounced coo-COO-ie) Province are a story in and
of itself, not befitting a mining rant perhaps – but we will go there
anyway. Although you are at an altitude higher than the top of Mt.Rainier,
it's warm and flat and green here in the Argentine
summer, and energized power lines run everywhere. Sugar cane, alpaca meat,
vicuna fur, cattle, sheep, beans, fruit, tobacco and iron and salt mining
help drive Jujuy's
economics. But gold, silver and copper always have been Jujuy's
staples, and up here with Soltera, we are just
three klicks from Bolivia
and Potosi.
The mining ethic of this region is such that, a couple of years ago, the
miners here went on strike to protest the presence of ecotourists
who, they said, were littering the place up and trashing some of the mine
workings. The government relented after two months and kicked the greenies
out.
Argentina itself – another
story not suitable for a mining rant but we are going there anyway – is
a success story in itself. Measure Argentina
by any standard: literacy, education, life expectancy, GDP growth, per-capita
income, and it tops most of South America and a good
portion of Europe as well. The country has
weathered the 2001 financial crisis when the Argentina peso was un-pinned
from the U.S. dollar and fell by 75 percent literally overnight; it now
enjoys a stable and democratically elected government and an economic growth
rate to rival China's, and has fully repaid its IMF (“Dirty MF”
in the words of singer Bruce Cockburn) and World Bank loans. So Argentina
approaches the second decade of the third millennium a democracy that is
resource-rich, debt-free, and loaded for bear.
And
now to our main story: Soltera Mining Corp. itself.
Soltera became publicly traded on the OTC:BB as SLTA in mid-2007 and currently stands with 42.5
million shares outstanding (26.5 million of which are restricted at the
moment). In this current crazy market milieu, Soltera
currently can be had for a niggardly 50 cents. Which puts Soltera, with a market cap of a measly $21 million or so,
in charge of at least $380 million worth of Argentine gold.
The
El Torno property which we toured with Soltera President and CEO Dr. Fabio Montanari
(along with our favourite Swiss, Georg Stangel of Stein-am-Rhein), was
sporadically surface-mined by the Incas, then the Spanish and the Jesuits
after the New World was discovered by Old Europe, mostly for small nuggets by
trenching. A 750-meter adit was driven onto the
property by previous explorers, which we explored with the aid of carbide
lamps – everybody in Wallace has a carbide lamp on his mantel or on a
book shelf, but this was the first time we'd ever actually used one.
The
property consists of five mining rights covering a total area of 7,900 hectares (19,521 acres). Soltera has an agreement with the titleholder that
includes payments totaling US$350,000 to 30th June, 2010 and an
obligation to spend US$1 million on exploration during the first two years of
the agreement. Various additional payments can be made to extend the
exploration period, and Soltera has an option to
acquire the mineral titles.
El
Torno languished for most of the 20th
Century until Puma Minerals, thenPenoles, each undertook an evaluation of the property,
beginning in 1997. Puma drilled out, and Penoles
subsequently inferred, a resource of de minimus500,000 ounces
of gold, accompanied by silver in a 1:1 ratio, based on a quartz vein system
measuring 1.3 km
in length and 100
meters in depth, with assays averaging 23 grams/tonne. Penoles further inferred
that the vein, which is open at strike and depth, could run as long as 2.5 km and extend as deep 400 meters with the
potential for more than 2 million ounces of gold. Grab samples have run as
high as 130 grams/tonne disseminated Au in the
quartz, Soltera reports.
While
the El Torno vein is near the surface, its high
grades and structure justify an underground mining operation, starting with a
ramp driven from the surface to a depth of 400 meters, CEO Montanari told us. It's further worth mentioning that
Puma's and Penoles' resource estimates were based
on cut-off grades dictated by the gold price in 2001, right at Brown's
Bottom.
Dr.
Montanari is something of a legend in Italy, having
spearheaded exploration projects in North, Central and West Africa; South
America; Europe; Canada; and the U.S., and authored
a textbook in use in that country's under- and post-graduate geology courses.
He was dispatched by his Italian employers to Argentina a decade ago to
evaluate some 50 mining prospects and in the course of that work, came across
El Torno, in elephant country just a few klicks from Silver Standard's giant Pirquitas
project. When Puma and Penoles dropped out of El Torno after failing to come to terms with its property
owner – and at a time when gold was languishing below $300/oz – Montanari picked it up and last year vended it into Soltera. UK-based Dr. Kevan L.
Ashworth joined Soltera Mining Corp.'s Board of
Directors in September.
During
our mid-December visit to El Torno, Montanari had just begun a second round of exploration
work on the property preparatory to a Q1 2008 program of trenching and
geophysical surveys in order to establish drilling targets for the second
quarter. So far, he reports, the news has been encouraging “and
suggests that the gold quartz vein is different from previous interpretations
and the mineralization could be more widespread than previously
thought.”
Montanari is more Scottish than
Italian in his spending habits, taking low-cost advantage of the “brain
drain” of mining engineering and geologic talent leaving the increasingly
Marxist environments of Venezuela
and Bolivia.
“We pretty much have our pick of the best,” he said. And he did
one smart thing his predecessors at Penoles and
Puma neglected to do: worked out purchase terms with the property owner before
he went to work on it.
Over
a dinner of Argentina's
legendary beef in the delightful mountain village
of La Quiaca,
where we overnighted to and from the mine and
whence you can literally walk across the border into Bolivia, Dr. Montanari's Italian, his passionate side, comes through.
“You work for other people, you do your very
best. But then you come across something that you know you can build
yourself, and make it the very best there is. I have found it here in the Andes.”
Towhich we would only add: $380 million
worth of gold for $21 million. At 50 cents a share, seems like a no-brainer
to us. Oh, and about that name, Soltera.
Fabio wanted to call it “Sol Terra” -- meaning sun and earth. But
a typo on the way to the web-designer's dropped one
of the “r”s, drastically changing the
name's meaning. Soltera, turns out, is
Argentine slang for a lonely woman. Well, this one's about to get lucky.
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