Setting the Table: Eloro Updates
Dog days of summer indeed. The world’s markets went into free fall at the beginning of August culminating in Black Monday. Precious metals were relatively solid but share prices for producers, developers and explorers were off significantly. In the midst of the turmoil, a very useful corporate update from Eloro Resources on its Iska Iska project in Bolivia was somewhat ignored.
Corporate updates are often the neglected stepchildren of the junior resource news flow. After all, they don’t have drill results and cannot include economic assessments so many investors simply ignore them and wait for the “red meat”. Which is a mistake because a good corporate update will provide information on the actual thinking underlying the development of a resource. This is all the more true when a company is dealing with a resource and potential resource on the scale of Iska Iska.
Iska Iska, as I have written before, is really too big to be understood as a single deposit. Eloro (ELO.T) talks about “domains”. A silver/lead/zinc domain, a silver/tin domain and what this update focuses on is the proposed starter pit in the Santa Barbara zone focusing on silver/lead/zinc.
As CEO Tom Larsen puts it “Previous channel sampling along the Santa Barbara adit which returned 165 g Ag/t, 3.46% Pb and 0.46% Sn over a 166m strike length including an exceptional section with 1,024 g Ag/t, 25% Pb and 1.16% Sn over an 8.11m length highlight the important high grade silver-bearing structures present in the Iska Iska mineralized system.”
The update indicates the need for further, tightly spaced, drilling in this zone, “While geological and especially geophysical data clearly show that the mineralization is continuous between wide spaced holes, additional definition drilling is required to provide a more accurate estimate of grade. Supporting this view are the results from our bulk metallurgical testing that returned substantially higher grades than the original twinned diamond drill holes - 91 g Ag/t in the bulk sample versus 31 g Ag/t in the original holes that were twinned, suggesting that grades, especially for silver, may be underestimated, in some cases significantly.”
Eloro is working along many paths to come up with the hard numbers, drill results, a mining plan, metallurgy and ore sorting technology (both XRT sorting and Dense Media Separation) needed to create a robust, detailed, Preliminary Economic Assessment based upon what will likely be a 12 million tons per annum mining operation. The devil is in the details and ELO has nailed down everything from pre-concentration to power requirements to port facilities.
There is still work to do. Further definition drilling, additional metallurgical drilling to provide additional samples to optimize ore sorting, and drilling to define a potential second “starter pit” in the SE chargeability anomaly.
The SE chargeability anomaly is a high priority exploration target. It actually has chargeability stronger than the anomaly over the existing high-grade resource in the potential Santa Barbara starter pit area and ELO has confirmed that the chargeability correlate very well with areas of high-grade mineralization within the MRE.
You can see the challenge Larsen and his team face. The sheer size of the Iska Iska endowment could keep a geo team busy exploring for years. But the market is impatient. It wants tangible progress in the form of drill results and an actionable PEA.
At an informed guess, there will be another release in the fairly near future. Eloro is drilling, assaying and putting together the information needed for its PEA. Some of that information could be released fairly soon.
[Disclaimer: This is not investment advice. I am not an investment professional. I am down about 30% at the moment. I will write about companies that I hold. I will disclose any holdings. Do your own due diligence. Do it hard. Call the CEO.
I currently hold shares in ELO.T and while I have no plans to sell anytime soon, I reserve the right to take profits as they arise.]