Thursday, November 29, 2018

Endeavour Silver - Number crunching

A nice simple tidbit for silver bugs

Endeavour Silver Market Cap = $240M

El Cubo acquisition costs = $250M (link)

It's a hell of a mine...

Or as Bad Crooke put it:

Monday, November 26, 2018

First Majestic - Reserves, who needs them

When I was younger and infinitely more intelligent (as I thought), I had a high regard for First Majestic Silver. As I’ve got older, fatter, stupider and lazier, I had ignored them for ages until they ‘rescued’ San Dimas from Primero’s incompetence.

However, what peaked my interest wasn’t San Dimas, that should make money unless you are truly incompetent, it was the disconnection between what they mine at the various operations and the published reserve grades at their various mines.

It is something that I had berated Pretium for at Brucejack, but First Majestic, with 6 operating mines (excluding San Dimas as it is new), you would expect that with many years of operation experience that they would be fairly good operators, and excluding a blip or two, be within 10% of the reserve grades on average.

For the charts below I’m using:

  • Compiled production figures for 2016, 17, and 18 (to date) from FM’s MD&A’s
  • Reserve grades from the Form 40-F. and from the First Majestic Website (link).
Let us start with the good:

Santa Elena

The stand-out mine, since the start of 2016 they have mining higher grades than reserves, which are skewed by a bit of very low grade oxide material.

A mine that works.....

However, we can see in 2018 they either got into an expected high-grade area or are high-grading the shit out of the deposit to keep themselves cash flow positive with sub-$15/oz silver prices. Will this screw them in a few years?

San Martin

One of their oldest and smallest operation producing ~2Moz Ag per annum.

A mine that almost works, goddammit!!!

But consistently within 10% of the reserve grades...

La Encantada

and now the wheels start to wobble.

Will they recover in 2018/19?

It has generally been ok, but the wheels fell of the wagon this year, with mine grades plunging by an ounce. It will be interesting if they can get the mine back on track.

La Guitarra

Their smallest and generally worse mine.

A general decline...
Always been crap, but a nice spike at the end to show that they were in panic-mode to keep the mine operating.

Del Toro

Del Toro, more like La Vaca Muerta.

Funny how they keep dropping the reserve grades every year, yet the mine keep churning away at ~150 g/t Ag. 

La Parrilla

The original mine, probably getting long in the tooth, probably best to take it out back and shoot it in the head.

Wow, what a piece of shit

It look like at their mines, and in particular Del Toro and La Parrilla, that First Majestic have a fundamental problems with the resource calculations. I could understand missing but a little bit (plus or minus 10%), but to consistently not make the grade at virtually all of your mines consistently over the last 2.75 years takes a special type of company. Christ, if you got any worse, you'll be Coeur....

When you looked a bit closer, you actually see that it isn't First Majestic rescuing San Dimas, it is San Dimas that will rescue First Majestic. Santa Elena is saving them at the moment, but with the high-grading going on, will the mine be fucked in a few years?

Saturday, November 3, 2018

Garibaldi - more results

Obviously, I was wrong with my final comment on my last post on Garibaldi:

They hit some intervals of massive sulfide mineralization in hole 23 and 24, but again, with the maps provided, we can see that they are just 2 more holes drilled into the same area as before.

I've highlighted the collars in Magenta and the holes traces with a thick black line, and drawn a cross section through the massive sulfide intervals intersected by both holes. You can get the 3D viewer file from here (link)

In summary both holes were designed to explore for the Northern (Hole 23) and Southerm (Hole 24) continuation of the Central/Discovery Zone.

I apologize, this is a busy slide.

Hole 18-23 intersected a zone of low grade mineralization at ~125m depth, just below where you would expect the northern extension of the Main Zone to be (this hole is only 25m north of hole EL-17-14).

However, I'm intrigued by the massive sulfides at at massive sulfide zone at ~72m depth. It seems to line up with the massive sulfides hit in hole 41 and the surface outcrop of the Crevasse zone. To me, it looks like the Crevasse and NW zones maybe the same and connect down-dip into the Central/Discovery zone.

Still forming small pods
Hole 18-24, this was drilled ~15m south from hole EL-18-16 and hit massive sulfides at ~187m depth. It appears that the massive sulfide mineralization has been off-set (dropped down to the south) by a fault between these 2 holes. The good news is, it could mean that the massive sulfide zone is open to the south beyond hole 24. However, it isn't open in all directions as drill-hole EL-17-13 passed just 12m to the east and didn't hit anything. We see the same to the west (holes 18-15 and 17) where drilling has hit nothing of note.

Massive sulfide zone could be up to ~30 horizontal length

We've had 32 holes drilled into this area (7 historic, 25 by Garibaldi) measuring 360m by 260m (from extreme extents of the drilling) and all they have hit is a couple of mall, high-grade pods.

  • Discovery zone is the largest and is approx. 150m x 75m by ~10m thick in the core
  • The NW/Crevasse zone appears to be 120m x 75m by ~1-3m thick (if they join together).
The market is disappointed with this as we've been told that:

and shown

That the area that they are drilling is the WORST of the 4 VTEM targets known about since Aug 2017 (that is the date of the map above), yet we still haven't see a single hole drilling into anomalies A, B, C or the "Q" anomaly.

We still are waiting to find out the location and results from the final 16 hole (25 to 40), do you think any will be drilling on any of the other targets?