One thing leads to another as the saying goes. Tocvan Ventures (TOC.C), under the leadership of CEO Derek Wood announced that it had committed to acquire an option agreement for the El Picacho Gold Project within the Caborca Orogenic Gold Belt in Sonora, Mexico.
In the press release, Wood commented, “Tocvan sees this as a tremendous opportunity to add to our portfolio of strong gold assets and El Picacho will be the perfect complement to Pilar. The amount of quality exploration work completed to date on the project provides Tocvan with several gold targets that can be advanced to drill-ready status quickly. We look forward to advancing El Picacho while we continue to unlock the potential of Pilar.”
In the junior mining community, there is a good deal of discussion about the “ideal” number of projects a company should have on the go. Generally, having at least two active projects is seen as a good start. Better news flow, using more bandwidth, reducing risk are all reasons to have more than one project. Tocvan has been steadily advancing its Pilar Project and, in the process, working with Mexican geologist, Rodrigo Calles-Montijo. Mr. Calles-Montijo works as the exploration manager for the Pilar and is based in Hermosillo, the capital of Sonora. Calles-Montijo has put together an exploration team in Mexico and that team has proven itself at Pilar and can easily take on El Picacho, just a 2-hour drive from Hermosillo.
“The Pilar results put us on the radar,” said Wood in a telephone interview. “Even with COVID, we met some excellent service providers allowing us to move the project forward safely.”
Successfully operating in Sonora, Tocvan was able to attract the attention of other companies with properties in the district. One of those companies was Millrock Resources. Millrock holds an option on the El Picacho Gold Project where various companies had conducted historic work. The project is 18 kilometers away from the gold and silver producing San Francisco gold mine.
“Millrock is an experienced project generator,” said Wood. “They have a portfolio of projects, mainly in Alaska. They have an excellent technical team with a lot of projects across North America, however they do not have the resources to explore them all, that’s where we come in. We met with them and realized, these are people we want to work with.”
The property itself had a lot going for it. It is a good size, 2,413.7 ha and road accessible. It is 140 km north-northwest of the market center of Hermosillo. Along with a network of artisanal gold workings.
For geologists, Brodie Sutherland, Tocvan’s VP Exploration, and Rodrigo Calles-Montijo, there was a wealth of historical geological work. “We have over 2,600 rock samples and 3,500 soil samples. The property has been mapped at a regional scale, 70% of the area has been covered by ground magnetic surveys and there are 17.8 line-km of IP surveys. We can really hit the ground running here” said Sutherland.
(Here’s a video of Brodie discussing El Picacho.)
Previous operators have identified five Orogenic Gold Targets and a couple of those targets were drill tested by Phelps Dodge. “Just five, widely spaced, holes across these broad target areas,” said Sutherland. “We have the records of the results and believe there is more work to be done.”
The job now is to get everything ready for drilling and trenching. Permits are already in place. “Now we have to build an exploration model, a 3D visualization,” said Sutherland. “We believe we have the same structure and the same geology as the San Francisco mine.” (A mine with 43-101 Mineral reserves of 758,000 ounces and mineral resources of 1,430,000 ounces.)
Wood and Sutherland agree that the El Picacho Project could be ready to drill by the end of 2021.
“As we start-up at El Picacho we have the advantage of Millrock’s geos’ experience,” said Sutherland. “Plus, we have Rodrigo Calles-Montijo’s team. We are very confident we can scale it up.”
Over at the Pilar project, Tocvan’s team is looking at the very real possibility of a bulk sampling operation in the next year.
Of course, all of this costs money. “We’re evaluating different financing options,” said Wood. As a long time veteran of the securities industry, Wood recognizes that Tocvan needs to be frugal to avoid having to dilute its stock.
Balanced against the need to avoid dilution is the temptation to raise money at the present share price. Tocvan has been on a tear rising from a low of $0.35 in January of this year to and all time high of $1.53. Junior gold explorers are back in market favour and Tocvan, with two projects on the go, will have a steady news flow. For investors, highly prospective properties, a safe jurisdiction, a tight float, thrifty management and the very real possibility of discovery add up to a very attractive package. Doing a five million dollar financing with a $1.53 share price is not much dilution.
If gold can crack $2,000 and Tocvan can bring in a few good drill holes, the current share price will look very, very cheap.