I have just returned from a visit to the ECU mines at Velardena, and here is a report that I wrote during my trip:
Okay, I have pounded down a few beers tonight and it was a long day, so I hope I can be coherent in this post. Walking through the mines at Velardena is like hanging out in a sauna for 4 hours while climbing a stairmaster. But it was worth it. I will have more time to post details from my trip when I get home, but I wanted to share a few key notes tonight before the market opens for trading.
The most important point that I should highlight is that I envisioned the skarn system as a halo of ore above an underlying intrusive. The more detailed geological model that I was able to see today demonstrates that the intrusives underlying the property are more like verticle chimney structures, and the skarn is a concentric zone surrounding the intrusives and plunging to depth. The is also strong speculation that sills extend laterally from the intrusive dykes and therefore there is potential for additional skarn systems around the sills. There are two large tonnage dykes on the property we control and we have only just reached the vertical extension of one of them so far.
The project geologists think that the skarn zones will ultimately measure about 100-300m in width, and they could plunge to several thousand meters in depth. So there is a very real potential that we have not one but TWO world class deposits on the little property we control. This could amount to well over 100 million tons. And within this massive tonnage of skarn ore, they expect to find higher grade cores that will be well above the results we are discovering so far.
The narrow veins that have been mined to date are just the remnants of hydothermal fluids that eminated from the heat and presure of the ore body at depth. This is important because the grades are increasing with depth, and the vein widths are also growing. It is an indication of the intensely mineralized system awaiting discovery as we continue the drilling program. Similar narrow veins have been observed in neighboring mines operated by Grupo Mexico and Penoles, and they did not encounter minable widths of the veins but did find a huge tonnage of ore in the underlying skarn systems. The consensus opinion is that becuase the hydrothermal veins at Velardena are of such higher grades and tonnage, then the skarn will also amount to much stronger mineralization.
The stockwork encountered in the last drilling program was just the transition zone from the skarn to the veins. I walked through that today and it goes on for a long way in the drift, with easily identifiable high grade sulphides surrounded by lower grade material with fine veinlets running throughout. This one zone alone could amount to about 1.5 million tons of ore grade material. To put that in perspective, that one zone would be more ore than has been proven up in the majority of producing juniors in Mexico today.
One other thing that impressed me was the amount of activity going on above ground. New buildings are being completed, new power infrastructure is in place, new heavy equipment has been purchased, and the mill has been expanded. Over a year ago, I could see equipment that was barely running due to lack of cash for maintenance, and now I see evidence that the company is well financed and moving forward quickly. You need to prime a pump before it starts flowing and this is what ECU is doing at the operations level.
The company now has opened about 15 or 16 stopes underground, and each one is capable of about 30 tons per day production. The mill facility is rated to deliver a maximum capacity of 340 tpd, and we are close to that now. Some of the stopes are working oxide material, which will just be stockpiled at surface until greater mill capacity is available, but it is comforting to know that ECU is now positioned to run at full capacity, while most other Mexico juniors are struggling to keep enough ore flowing to keep the lights on.
The future is very bright for the company both at the discovery end, and the ongoing operations. I am glad that I have held the bulk of my shares in a core position and do not have a great deal of anxiety on how the market trades these days. I dont think people have discounted in that we are now a wide vein miner and no longer sqeaking by with surgical extraction of narrow veins. And once we have defined a larger area of skarn, school is out...
cheers!
COACH247 |
