Irish Money Backs Mexican Silver Mines And Its Carbonate Replacement Deposits
By Alastair Ford
minesite.com
What’s a Canadian listed company that bought some Guernsey-registered silver assets in Mexico doing with a sizeable investor base in Dublin? The answer is director Joe O’Farrell. “Everyone knows Joe O’Farrell”, says Mexican Silver Mines’ chairman Dr Roger Norwich. That’s a claim that’s somewhat difficult to verify, but we at Minesite certainly know Joe, and we can verify that he’s a likeable fellow, and more than likely he might charm a shilling or two out of a few old acquaintances in a Dublin bar for the purpose of investment in a choice silver asset in Mexico.
Joe’s biography on the Mexican Silver Mines website is disappointingly short, and doesn’t mention his close association with Cambridge Mineral Resources during that company’s long and ultimately futile attempt to develop the Lomero Poyatos polymetallic project in Spain. Most of the Cambridge Minerals directors have long since moved on since those days – and no wonder. Cambridge shares ran up to over 30p six or seven years ago on continued anticipation about the prospectivity of Lomero. That was before the mining boom was even a twinkle in a Chinese builder’s eye. Now, as the boom scales ever greater heights, Cambridge’s shares plumb ever new lows: 1.75p is the latest price at the time of writing. But there’s been a lot of water under the bridge since those heady Lomero days, and it’d be pistols at dawn if you accused the old management of being solely responsible for the value destruction there. There’s a view in the market that the new management bear at least an equal portion of the blame.
But onwards and upwards for David Bramhill, the Bristol-based entrepreneur who was the driving force at Cambridge for a long time. Onwards and upwards too for Joe O’Farrell, the Irish moneyman with the knowing smile. Together they’ve started a new venture, an oil company in the USA called Nighthawk, which has to date proved extremely successful. And sitting on top of Nighthawk as non-executive chairman? The aforementioned Mexican Silver Mines chief, Dr Roger Norwich. So we come full circle and back to Mexican Silver Mines.
According to Dr Norwich, Joe O’Farrell raised a lot of the seed for Mexican Silver Mines in Dublin. That was just after Dr Norwich returned from Mexico in the wake of the change in the mining law in 2006. In his back pocket he had the rights to 325,000 acres of land in the north east of the country. The new law, explains Dr Norwich, flushed out a lot of high net worth families that had been sitting on undeveloped and choice assets since time immemorial. Its effect was strikingly similar to South Africa’s use-it-or-lose-it policy, in that a lot of smaller but nice looking projects were suddenly up for grabs.
Dr Norwich, though, had another trick up his sleeve. The reason he was able to secure such a sizeable land package, he says, was because “everybody had forgotten about carbonate replacement deposits. Everybody was over on the other side of the country knocking the hell out of vein mining”. In the company’s latest corporate presentation, which was put together for London’s recent Silver Day 20:20 conference, that statement is put even more starkly: “These mining districts have not been explored in modern times”, the presentation says, “and they have never been drilled”. Not quite virgin territory, because as is the way with mining, the garamperos get everywhere, and the Spanish had a look too. But it’s close.
Mexican Silver Mines has three key projects, Ral, Providencia and Anillo de Fuego. Some of the company’s most recent drill intercepts have come out of the Vallecillo district on the Providencia property. The results aren’t spectacular, but Dr Norwich is keen to point out that these drill holes were sited away from the historic mineshaft on the property. More significant for the immediate term, there’s also between US$2 million and US$5 million worth of tailings at Vallecillo, so there’s some prospect of early cash coming into the company. In the event that the market turns hostile, that money will keep the lights on.
But a hostile market doesn’t look very likely just at the minute. For one thing, silver’s at over US$17.50 an ounce. “At the time we started”, says Dr Norwich, “silver was at US$6.00”. Remember those days? That was when the bulls said silver was going to US$8.00! Even at those low levels there was a sound argument for having a look around. At US$17.50 silver the picture’s somewhat different. Local heavyweight Penoles has been nosing around the Mexican Silver Mines properties. Newmont and First Majestic have had a sniff too. So this isn’t just a bunch of ground staked in a boom for mining promoters to raise a buck off. It’s arousing serious interest. There’s a long way to go yet, though. Watch for newsflow on Ral and Providencia in particular, and fairly soon. Drilling is ongoing. And if you run into Joe O’Farrell, buy him a whiskey or two. He’ll spin you a good yarn, and you never know, he might put you on to a choice investment or two as well. |
