Gold, zinc, tungsten: Tyler Rice, CEO of Margaux Resources (V.MRL) has a true polymetallic property to explore. Located in South Eastern British Columbia, the Margaux properties follow the rich geology of the Kootenay Arc.
On February 27, 2018 the company announced that it had completed two significant consolidations of lands, projects and mineral tenures in the area which means that Margaux controls both the Sheep Creek Gold District, “the third-largest, past-producing orogenic gold district in BC (after Barkerville and Bralorne)” and the Kootenay Arc Zinc District including the past-producing Jersey-Emerald lead-zinc mine.
Commenting on Sheep Creek, Rice stated, “This is an asset that was hiding in plain sight – neglected. Success leaves tracks: old-timers found nearly 800,000 ounces here, following single veins in the dark. Having completed the consolidation of these contiguous mineral tenures, Margaux has the opportunity to obtain, for the first time, a more complete understanding of the geologic formation and to apply exploration technologies that those early miners never could have imagined.”
Margaux explored the sections of the Sheep Creek District it controlled in 2017 and in the February 27 release indicated that it would be releasing highlights of the results of that exploration “shortly”. It is waiting on the last of the results from its 2017 30 drill hole program. However, the fact the company has continued to acquire land through in-fill staking since the initial acquisitions and has worked to consolidate the highly fragmented district suggests the company liked what it was seeing as it explored.
As zinc continues its strengthening in the international markets, having a past producing zinc District on the books is a terrific asset. Margaux explored the old Jersey-Emerald lead-zinc mine, which produced eight million tonnes of zinc ore prior to its closure nearly fifty years ago, and Margaux’s Jackpot property, where there has been no historical mining, but where Margaux’s 2017 drilling program identified numerous high-grade zinc intercepts, as well as near-surface lower grade zinc mineralization potentially suitable for open-pit mining.
In the press release, Rice stated “Although zinc mineralization is known to exist in commercial grades in the Kootenay Arc Zinc District, Margaux’s exploration program is producing new data, and with it, valuable insight. This is about bigger data as a path to bigger rewards. We plan to assess the full extent of the resource base and mining alternatives.” Once again, the fact Margaux has gone ahead and in-filled staked and consolidated the claims in the area is a tell as to what the “big data” is showing the company.
For most companies, two significant mineral deposits would be more than enough to occupy the geologists and the drillers. However, Margaux has another, near-term prospect in the form of a tungsten tailings recovery plan. It has sent a 3500 kilogram sample to the Cronimet Mining Group, a global industry leader with regards to tailings beneficiation and expects to have the results back from lab scale testing in the next few weeks. However, the results have been promising enough that Margaux has decided to proceed.
Margaux has initiated the permitting process to move into the field and run a bulk sample of 10,000 tonnes. “The basic process,” said Rice, “is that you need a backhoe and an area for the processing facility. We’d run the bulk sample for between 200 and 300 days at around 5 tonnes per hour. We’d refine the process.”
The tailings pile this initial work is being done on is estimated to contain 1.4 million tons of tailings. However, Rice points out that this pile is not the biggest tailings concentration in the area. Margaux is working with conservation and environmentalist group, StreamKeepers to identify other tailings targets. “There are more than 40 historical tailing deposits in the Salmo River basin, including 8 million tons of lead-zinc tailings we are aware of,” said Rice.
From the investors perspective, tailings processing is very interesting because it would lead to more or less immediate revenue in the hands of the company. That, in turn, means that the company’s exploration costs can be somewhat offset and the need to issue more shares reduced. “The tungsten is a pure play,” said Rice. “The price of tungsten is up more than 60% over the last year and our tungsten recovery would be direct cash flow.”
Looking forward to 2018, Rice sees three milestones. First, he is looking forward to commencing its 2018 gold drilling program. Second, Rice wants to have the results of that program coming in Fall of 2018. And third Margaux is looking forward to gaining the bulk sampling permit, likely in Q2. The actual processing of the sample will begin shortly after receiving the permit.
Margaux has the cash on hand to drill its 2018 program with 1/3 in hard dollars and 2/3 in flow-through dollars. Rice is also encouraged by the performance of the metals markets.
“We have a diversified portfolio. Gold looks like it may make a move. Zinc is at a 10 year high. Tungsten is up since last summer,” said Rice.
The Kootenay Arc was hugely prolific fifty years ago when miners chased single veins and the idea of 3D geological modeling was unknown. Bringing modern mining methods to bear should pay off for Margaux Resources.