While many metal exploration companies struggled in 2013, Kootenay
Silver (TSX-V:KTN) built a 92 million ounce resource and forged a
partnership with Agnico-Eagle Mines who invested $4.7 million after
a six month due diligence on the project.
Agnico-Eagle is a $5.2 billion company with global operations.
Its 2013 production guidance was 1,060,000 oz of gold at a cash
cost of $690 an ounce. AEM has declared a cash dividend for 31
consecutive years.
"We are pleased to be involved with the advancement of
Promontorio," stated Sean Boyd, President and CEO of Agnico-Eagle,
"a project that will continue to benefit from Kootenay's capable
exploration team."
Kootenay's President and CEO, Jim McDonald, is an executive and
geologist who was a key player in the development of National Gold,
which merged with Alamos Minerals. McDonald was also President of
Genco Resources which operated an underground silver mine in
Mexico.
There are currently 6 billion ounces of gold above ground and
only 1 billion ounces of silver. In 2013 the U.S. Mint sold 42
million Silver Eagle Bullion Coins, setting a new annual record.
The iShares Silver Trust is up 5% already this year.
"There is a limited downside risk for the international price of
silver," states Praveen Singh, a senior commodities analyst, in a
recent interview with Economic Times. When the silver market
recovers, silver explorers with proven resources in stable mining
jurisdictions will see dramatic stock price increases.
Kootenay Silver's flagship asset is Promontorio, located in the
state of Sonora, Mexico, approximately 75 km northeast of Ciudad
Obregón.
The mineralization at Promontorio is hosted in a diatreme
breccia complex, measuring 3.5 by 1.8 km in size. Diatreme
complexes are known to host monster deposits of precious and base
metals. Mexican examples include the Penasquito project with 17.8
million Proven & Probable ounces of silver, and the Pitarrilla
project with 643M oz. of Measured & Indicated Silver.
A Breccia is fragmented rock which has been fused together by
minerals. Breccia fragments provide multiple sites for the
crystallization of precious metals.
At Promontorio, the mineralization is centered on multi-stage
breccias and peripheral stock-work zones. Drilling has been
concentrated at the Pit and NE zones. Both zones are open along
strike and at depth – offering the potential for significant
resource expansion.
"Mexico is a mature mining jurisdiction with high mineral
endowments and high discovery rates," explains McDonald. "In a
short period of time Kootenay has proven up 92 million measured and
indicated ounces."
The Promontorio property has been mined historically going back
to the 1920s. A small open pit open pit operation ran from
1988-1991, extracting about 50,000 tonnes of ore.
"Two things attracted us to the Promontorio project," states
McDonald, "One - good grades from historical drilling. Secondly -
it appeared to be a Breccia-hosted ore as opposed to a vein type
deposit. This gave us confidence that the mineralisation has the
potential to expand into a large tonnage deposit."
In the fall of 2013, PI Financial, part of the Capital Markets
Group, issued a "Buy Recommendation" for Kootenay Silver with a
price target of $1.00.
"This [latest] round of drilling is focused on delineating a new
high grade breccia zone between the historic Promontorio Pit and
the NE Zone," states the PI Financial Report. "The highlight hole
outlined 25m of 183g/t Silver-equivalent."
On December 12, 2013 KTN announced assay results from a further
fifteen drill holes reporting continued high-grade results within
the Pit and NE Zones. A further 5,500 meters of drilling have been
completed, bringing the total drilled since November 2012 to 21,500
meters.
"Results have been remarkably consistent throughout the current
phase, generating multiple high-grade hits within broad zones of
widespread mineralization," states McDonald. "Drilling continues to
establish continuity of mineralization between the two main zones.
Gold grades are increasing in the Central Breccia area underscoring
the complexity and potential of Promontorio's large diatreme
system."
Following extensive metallurgical testing conducted by ALS
Minerals of Kamloops KTN's current NI 43-101 Resource Estimation
includes gold assay results. The testing confirmed that a post
pressure oxidation treatment process can achieve 94.5% gold
recoveries.
"We are currently designing what the next drill program will
look like," states McDonald. "Although there are a number of
attractive secondary and tertiary targets on the property, we are
going to focus on the Central Breccia area between the NE and Pit
Zones because this is our shortest path to an economic mine."
Prior to 1900, the Gold/Silver ratio averaged about 16:1. In
1975 it was 40:1. Today the ratio is 62:1. A reversion to the
historical Gold/Silver ratio would value silver at $78/ounce – 390%
higher than today's price.
Kootenay Silver is currently trading at .60 with a market cap of
$37.6 million.
Legal Disclaimer/Disclosure:
A fee has been paid for the production and distribution of this
Report. This document is not and should not be construed as an
offer to sell or the solicitation of an offer to purchase or
subscribe for any investment. No information in this article should
be construed as individualized investment advice. A licensed
financial advisor should be consulted prior to making any
investment decision. Financial Press makes no guarantee,
representation or warranty and accepts no responsibility or
liability as to its accuracy or completeness. Expressions of
opinion are those of the author's only and are subject to change
without notice. Financial Press assumes no warranty, liability or
guarantee for the current relevance, correctness or completeness of
any information provided within this article and will not be held
liable for the consequence of reliance upon any opinion or
statement contained herein or any omission. Furthermore, we assume
no liability for any direct or indirect loss or damage or, in
particular, for lost profit, which you may incur as a result of the
use and existence of the information, provided within this
article.
Also, please note that republishing of this article in its
entirety is permitted as long as attribution and a back link to
FinancialPress.com are provided. Thank you.
CONTACT: Kootenay Silver Inc.
Suite 1820 - 1055 W. Hastings St.
Vancouver, British Columbia
Canada V6E 2E9
604-601-5650
1-888-601-5650
FAX: 604-683-2249
investor@kootenaysilver.com
Structured Products (NYSE:KTN)
Historical Stock Chart
From Nov 2024 to Dec 2024
Structured Products (NYSE:KTN)
Historical Stock Chart
From Dec 2023 to Dec 2024