Eloro: Bulk Sampling for Bulk Mining…and a New, Huge, Target

Eloro, ELO.T, silver, tin, zinc, Bolivia

The metallurgical drill holes used at Iska Iska are larger diameter than the regular diamond drill exploration holes. For Eloro (ELO.T) and its CEO, Tom Larsen, this makes all the difference. “The more the better,” said Larsen in a telephone interview. “The Iska Iska minerals are mainly disseminated in stockworks and veinlets. A bulk sample is much more representative of the grades you will encounter when you mine the deposit.”

In the original MRE starter pit section, based on assays of narrow, exploration holes, the silver head grade was estimated at 24 grams per ton silver. In the press release January 24, 2024 which covered the metallurgical holes and two twinned diamond drill holes and the bulk sample taken from that material, ELO reported a head grade of 91 grams per ton silver in the bulk sample in comparison to the 31 gpt from the twinned diamond drill holes.

“We recovered 7-8 tons of material from the met holes,” said Larsen. “We bulk sampled 6 tons of that material. Bulk sampling is the proper way to get a more accurate representation of the deposit. It’s more expensive but a bulk sample is more realistic because we will be bulk mining.”

“The grades can significantly increase with bulk mining,” said Larsen. “We are looking at bulk mining 30-50 thousand tons per day in the starter pit.”

Once you understand the idea of “bulk mining” the rest of this lengthy press release makes a lot more sense. Based on the head grade results of the bulk sample, introducing a pre-concentration stage into the flow sheet can give ELO a huge economic advantage.

“XRT ore sorting is a game changer,” said Larsen. “A lot of people misunderstand ore sorting. They see it as a gimmick to upgrade low grade material. It isn’t. It’s a way to create a high-grade pre-concentrate by separating the higher grade material and stockpiling the less enriched material.”

The press release outlined the success TOMRA had using its XRT ore sorting technology for the coarser sized fractions in the pre-concentration stage and using the well understood Dense Media Separation treatment of the finer fractions so as to pull on the strengths of both technologies.

“All of this will be going into a revised Mineral Resource Estimate,” said Larsen. “We are going to take our time, use proper, conservative, representation and make sure that nothing is under-reported.”

“The met holes plus the infill drilling will enhance the grade and expand the tonnage in the starter pit,” said Larsen. “We’re starting off with the 135 million tons in the first MRE. Our infill drilling will add at least 50 million tons of polymetallic metal value. There is a real chance we’ll report 200 million plus, once everything has been modelled.”

“We are also hoping for 50 million tons of .2-.3% tin,” said Larsen. “This should be included in the updated MRE but it will be in time for the PEA.”

Until the PEA, Larsen cannot discuss the Net Present Value of the project at Iska Iska. But he did allow that the previous cost per ton estimate of just over $9.00 was still seen as correct. “Now that we know the material is amenable to ore sorting we’ll have to factor in the cost of sorting, but that looks to be $3 to $5.00 a ton.”

Larsen can’t run the numbers, yet. However, if you take a potential 200 million tons of 50 gram per ton silver average using a $0.70 per gram price, the silver alone is worth $35.00 a ton. Assuming mining costs at the Santa Barbara starter pit site are US$14 a ton and you deduct the zinc and lead credits to offset the metallurgical recoveries, input costs of processing, transportation and smelter fees(NSR), you are left with an approximate $50 net value per ton of material. Times 200 million tons in the proposed starter pit: 10 billion dollars worth of rock.

When I spoke with Larsen last week, he suggested holding this piece until last Monday. Which usually means news and this was no exception.

IP at Iska Iska

On January 29, 2024, Eloro released the results of an expanded induced polarization/resistivity (IP/Res) survey at Iska Iska. Dr. Bill Pearson, Eloro’s VP Exploration is quoted in the release,

“The new chargeability anomaly, extending southeastward from the open pit that defines the MRE, adds at least an additional 600m of potential strike length to the major mineralized structural corridor that is up to 800m wide for an overall strike length of at least 2km. This new target area has not been drilled. In addition, the chargeability anomaly southeast of the pit is very strong, suggesting that it is a prime target for outlining additional higher-grade polymetallic mineralization.”

At first reading, the IP results suggest a very large target outside the bounds of the current conceptual pit shell. It has not been drilled however, Eloro’s previous drilling has been into targets which exhibited much the same IP/Resistivity profiles. A fact made clear in this figure:

Adding this target to an already enormous project offers a huge opportunity while creating large challenges for what is essentially a small exploration company. Drilling to confirm the anomaly and the mineralization and grades it contains is a very big project in itself.

Eloro’s current share price rose a bit on the IP news going to $1.90 and giving the company a market cap of 145 million Canadian dollars. It has fallen back a bit to a current $1.65 for a market cap of 123 million. The disconnect between the asset value and the current market cap is enormous and will become recognized.


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