Singing the Song of Sonora: Kootenay Silver's Promontorio Receives Agnico-Eagle Stamp of Approval and Adds Gold to the Mix
As the company rapidly approaches the 100 million ounce silver equivalent target on its flagship Promontorio project, Kootenay Silver [KTN - TSX.V] recently received a $4.75 million vote of confidence from a well-known mining heavyweight, and boosted its resource through an injection of an additional 506,000 ounces of gold.
Liking what it had seen during its aggressive vetting and acquisitions within the silver-rich state of Sonora, Mexico, major Agnico-Eagle [AEM - TSX, AEM - NYSE] invested $4.75 million into Kootenay Silver to close out April. Coming on the heels of acquiring the La India project through a takeover of Grayd Resources, Agnico-Eagle turned its attention to Kootenay's Promontorio Project. Following the investment by Agnico, Kootenay updated its resource estimate at Promontorio (see May 14, 2013 news release), bringing the flagship's Measured and Indicated Resource to 92,035,000 oz silver equivalent AgEq with another 24,326,000 oz AgEq categorized as Inferred.
The investment by Agnico-Eagle represented a near 10% stake in Kootenay, but also opened Kootenay up to access Agnico's Sonora-based technical team. For Kootenay, the investment and resource growth represents an important milestone, achieved within what's been a very successful 2013..
Agnico-Eagle joins celebrity investor Eric Sprott in taking a major stake in the Kootenay story, while maintaining a bullish stance on silver going forward. Coupled with the addition of a newly included gold resource, it appears Kootenay is getting much closer to its stated goal of 100 million ounces in silver equivalent, thanks to recent favorable metallurgy studies done on the property.
DRILLING RESULTS PENDING
The target within the Promontorio is a diatreme hosted system, that Kootenay's Dr. Tom Richards accurately likened to GoldCorp's [G - TSX, GG - NYSE] Penasquito project. The Penasquito is one of the largest deposits in North America, hence Richards' likening of Promontorio to the prolific Goldcorp asset is a very serious claim, and one that those following the Kootenay story cannot ignore.
Additional results from this campaign are expected in the next few weeks to a month.
ALLURE OF SONORA AND OTHER OPPORTUNITIES
Agnico's interest in Kootenay followed the company's claim that beneficial metallurgy would allow Kootenay to add some significant gold numbers to the ever-growing resource calculation.
While Promontorio is indeed the company's flagship, Kootenay also has other generative properties throughout the Sonora region, some of which are near to La India, as well as Alamos Gold's [AGI - TSX, AGI - NYSE] Mulatos Mine. These additional properties have been a part of the Kootenay portfolio over the last 7 years, it's not a far reach to expect further work to be done on these as well.
THE LATEST PROMONTORIO RESOURCE UPDATE
Within the latest updated resource statement on Kootenay's flagship, the company was able to include new metallurgical data and information to support the recovery of gold. At this stage, the open pit mineral resources for the Promontorio contain an estimated 44,504,000 tonnes that grade at an average of 64.32 g/t AgEq in the Measured and Indicated category, and an additional 14,564,000 tonnes Inferred at an average of 51.95 g/t AgEq.
The update, prepared and provided by SRK Consulting, incorporated the new evidence supporting gold recovery, however, did not include any of the drilling that's been completed since August of 2012. In that time since, the project has delivered very good results, with two separate drilling results announcements over that span.
These favourable announcements during that time included:
- January 30, 2013: Drilling results for 47 meters of 62 g/t AgEq, including 17 meteres of 94 g/t AgEq (with 47 meters grading 31 g/t Ag, and 1.32% lead and zinc or ?Pb+Zn') and (17 meters grading 48 g/t Ag and 2.0% Pb+Zn);
- March 13, 2013: Step-out drilling results for over 10 metres of 104 g/t AgEq (with 81 g/t Ag, and 0.97% Pb+Zn), which included 3 metres of 246 g/t AgEq (with 176 g/t Ag, and 3.04% Pb+Zn), and 9 metres of 47 g/t AgEq (with 33 g/t Ag, and 0.60% Pb+Zn) in a New Discovery Zone.
In addition to the open-pit resources, SRK also included an addition of underground mineral resources, to the tune of approximately 215,000 tonnes grading at an average of 56.96 g/t AgEq (M+I) and another 1.265 million tonnes grading at an average of 61.17 g/t AgEq Inferred.
THE BOTTOM LINE
Within a challenging market setting that's not been an easy environment to raise capital, Kootenay was able to attract a strategic investment with Agnico-Eagle's new involvement. Agnico was already quite active in the Sonora region, having vetted many of the projects already underway there, and acquiring Grayd Resources in 2012 for $275 million, to take over La India which is scheduled to start pouring gold in 2014. With the amount of time that both companies have been involved in Sonora, the $4.75 million investment by Agnico-Eagle appears to be that of a sign of mutual respect.
Going forward, Kootenay now has more than enough cash in hand to meet its development goals for 2013 and beyond. However what may be the key to this that makes for more excitement at the table in Kootenay's boardroom is the access to the technical expertise and regional knowledge sitting at the table with Agnico-Eagle.
Going forward, the group eagerly awaiting the results now includes Agnico-Eagle, Sprott, and many others that believe in Promontorio's promise.
G. Joel Chury
for the Bottom Line Report
Disclaimer: No information in this article should be construed as individualized investment advice. A licensed financial advisor should be consulted prior to making any investment decision. VantageWire makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of the VantageWire only and are subject to change without notice. VantageWire assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this article and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, VantageWire assumes no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this article. |
|
 |
| Kootenay Silver Inc.
Suite 920 - 1055 W. Hastings St.
Vancouver, British Columbia
Canada V6E 2E9
1-888-601-5650
Visit Kootenay Silver
as of 04:00pm EST , May 28, 2013
Recent Press Releases
From Kootenay Silver:
Kootenay Silver Inc. is pleased to announce that an updated resource estimate prepared by SRK Consulting (U.S.) Inc. of Lakewood, Colorado ("SRK") incorporating the gold content contained into the mineral resources of its flagship Promontorio Silver Project, due to new metallurgical data and information which supports recovery of gold. This updated resource estimate does not incorporate any drilling completed since the resource estimate announced August 21, 2012.[...]
Kootenay Silver Inc. announces the closing of a $4,750,000 private placement (the "Private Placement") with Agnico-Eagle Mines Limited ("Agnico-Eagle") previously announced by the Company on April 23, 2013. An aggregate of 6,250,000 units (each a "Unit") at a purchase price of $0.76 per Unit were issued to Agnico-Eagle pursuant to the Private Placement, with each Unit consisting of one common share in the capital of the Company (each a "Common Share") and one-half of one transferrable common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant entitles Agnico-Eagle to acquire one Common Share at an exercise price of $1.08 until April 26, 2015. All of the securities issued pursuant to the Private Placement are subject to a hold period until August 27, 2013.[...] | |