Speaking of Tin and Silver: Eloro
Back in June 2022 I wrote a Substack about Eloro (ELO.V) and its monster silver/tin property at Iska Iska in Bolivia. While it would be delightful to report a massive increase in the price of Eloro shares, they have been range bound between $3 and $4 since I wrote. Which is not a huge surprise.
The Iska Iska deposit is huge. How big is still being determined. Eloro is drilling hard and with every hole, increasing the size of the potential deposit and finding potentially very profitable grades.
As CEO Tom Larsen put it in a November press release, “Now that the reconnaissance drill holes just released, DSB-38, -39 and -40, are adding a further 500 meters of mineralized strike length, these latest results should add substantial tonnage to our resource model. Infill drilling at a later date should further upgrade and expand the higher metal value zonations that have become characteristic of the Iska Iska system.”
“Given the guidance of our geophysics, if one were to draw a line from Huayra Kasa in the north of the Iska Iska Caldera southwest to Mina Casiterita one can reasonably assume up to a 3 kilometre potential strike length of mineralization given the magnetic data to date. The current strike length, width and depth of the Santa Barbara complex, which is still open in all directions, is pointing to the strong possibility that Iska Iska will become a giant “bonanza style” Bolivian polymetallic discovery.”
And there, oddly enough, is likely the reason the share price is just puttering along. For a junior explorer to control a property with what looks like over a billion tons of economic rock is outside the experience of most retail resource investors. The numbers are too big to really get a handle on.
Add to that the fact that Iska Iska is a polymetallic deposit and ELO reports its results in “silver equivalent” grams per ton. For a lot of investors, working out the values in a given drill hole is just too much work. So, despite there being huge quantities of mineralized rock, with more added every day, Eloro has not really caught on with retail investors.
Frankly, I am pretty certain that Larsen and his team, while they would like retail investor interest, are actually aiming for the institutional market. Bringing in Yamana Gold’s Executive Chairman, Peter Marrone as a special advisor suggests that Larsen is grooming Iska Iska to be taken out by a world-class mining company.
Most junior explorers have that “exit” in mind. However, very few are developing the sort of world-class deposit which will attract the attention of a major. At Iska Iska Eloro is swinging for the fences.
It does not hurt a bit that the price of tin is firming and the price of silver is gradually rising. The value of the rock at Iska Iska is rising. In its silver equivalent calculation Eloro in its November release used prices from July 2022: Silver at $607 a kilo (today’s price $780, Tin at 23.55 a kilo (today’s price $28.75). Retail investors may not really be aware of the divergence, but you can bet there are mine finance guys, with models which price update hourly, watching Eloro.
The fact is that Eloro puts out very technical, long, press releases. All steak, no sizzle. Because the people who evaluate these sorts of massive potential projects can and do read two-page tables of drilling results. They don’t need the sizzle.
Eloro has been quiet since the end of November. The Christmas break and all. Trading volume has been very low with less than 300,000 shares traded since the start of the year.
Is something brewing? Of course. Resources on this scale attract a lot of attention, all of it very, very quiet. Of course, management cannot discuss any discussions it may be having with a joint venture partner or an acquirer. You really do have to read the tea leaves which is never a precise science.
What is true is that the rock at Iska Iska is gaining value and the size of the potential resource is steadily expanding. At a guess, any entry point below $4.00 will look like a gift in future, likely the near future.
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[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.V and while I have no plans to sell anytime soon I reserve the right to take profits as they arise.]