Eloro (V.ELO) CEO Tom Larsen would have every right to be frustrated with South America. The company’s extremely promising La Victoria Gold/Silver Project in north central Peru has had to deal with 100 year rains and then community politics 3000 meters up in the Andes. Even with widespread community support, until a new President was elected in the community and a community vote to approve the surface rights was held, Eloro could not proceed with exploration. After being sidetracked for more than a year a new President was finally elected in early December.
“We hope to start work in late February,” said Larsen. “The thing was that we had to get the town to approve surface rights and that approval was controlled by the old President. Even with 90% of the community behind the project, and even with our award winning social responsibility programs, we still had to wait for a new President to be elected and a community vote. The new President was elected and we’re looking forward to the community vote happening and then we hope to commence the maiden drill program at San Markito.”
The frustrating thing about the community politics is that without activity on the property to report, the market had nothing to pay attention to. “No activity and the stock drifts,” said Larsen.
“We have a lot of technical depth,” said Larsen. “While we waited out the Peruvian situation, we were looking for a hedge. One place we looked was Bolivia. We saw New Pacific Metals with its Silver Sands project and Pan American and we asked ourselves, “Why are they in Bolivia?”
Larsen was alluding to the less than stellar reputation Bolivia has acquired over the years as a mining jurisdiction and as a politically volatile country. “Actual ownership of property is hard,” said Larsen. “The big companies mostly lease their land. But there is the San Cristobal open-pit silver, lead and zinc mine controlled by the Sumitomo Group, the San Vicente silver mine 95% controlled by Pan American Silver and the San Bartolome silver mine controlled by Argentum Investments, AB. So, you can certainly mine in Bolivia. Bolivia has become much more mining friendly.”
Eloro had one huge advantage in Bolivia, they were working with Dr. Osvaldo Arce, a Bolivian geologist who was familiar with and had worked on many of the country’s most prospective properties. He was looking for the opportunity to work with Eloro and made a list of potential projects. At the top of that list was the Iska Iska polymetallic epithermal project, in the Potosí Department, in southern Bolivia.
Dr. Arce had worked on Iska Iska in 2016 and knew the family who controlled the property. Eloro and Dr. Arce began working on the due diligence for the property in August 2019 and the company entered into a Letter of Intent to gain an option on the property which it announced October 8, 2019.
In that press release Eloro reported the results of its channel sampling work on the Iska Iska property. In that release Larsen states, “The results of our initial due diligence, supervised by Dr. Osvaldo Arce, P. Geo., are very positive and suggest the potential for a large polymetallic mineralized system in a similar geological setting to other major deposits in the belt.”
Along with surface channel samples, Eloro took samples from underground workings. The samples disclosed silver, gold, zinc, lead, copper and rare earths. “These were 3 meter channel samples,” said Larsen. “As well as very good silver and gold grades we saw 16% zinc and 16% lead. There was high quality mineralization in 40-50% of the samples taken.”
Based on the sampling and the geological mapping undertaken at Iska Iska, Eloro decided to go forward with the project and on January 9, 2020 announced the signing of the Definitive Option Agreement on the Iska Iska polymetallic epithermal project.
“The agreement gives us four years to do our due diligence but we should know what we have in two years,” said Larsen. “It is not going to be hard to outline the system.”
“We’re there for the size,” said Larsen. “There is mining on the property right now and we are allowing artisanal activity.”
“The samples we’ve taken to date cover less than 15% of the system,” said Larsen. “We’re looking to find 100 million plus tons.”
The terms of the option reflect the size issue: if Eloro can find the size it is looking for it can effectively control the property for a one time payment of $10 million. However, there is no royalty and Eloro pays no cash up front. The only up-front payment is 250,000 Eloro shares.
All of which is in line with Larsen’s commitment to keep the share structure of Eloro tight – there are only 38 million shares out – and add value with the drill.
“Between La Victoria in Peru and Iska Iska in Bolivia we’ll have a steady stream of news through 2020,” said Larsen. For junior explorers, news from two significant projects is exactly what the market is looking for.