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High Grade Argentina Silver

Bob Moriarty
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Mar 5, 2013

I’ve written about Argentex a couple of times in the past. I first visited the Pinguino project in Argentina in March of 2008. The company was trying to emphasize the mineral Indium. It’s a valid idea but the market didn’t buy into it even though Argentex had 60km of silver veins outcropping at surface and had drilled less than 5% of them.

I visited them again a year ago. The company did a 43-101 in October of 2009 showing a global resource of 100 million ounces of silver equivalent. The TSX has tightened up their requirements on 43-101 to allow only those ounces contained within a pit design. Argentex just released an updated 43-101 that more closely reflects what they would have in an open pit heap leach operation.

ATX hired MDM to redo the original block model used in the 2009 43-101. MDA modeled the deposit in a different way to reflect the vein hosted mineralization and the most likely mining method. This model lends itself to lower tonnage, narrow vein, open pit scenario but with significantly higher grade.

In the indicated category silver increased in grade by 354% to 102 g/t Ag. Gold in the indicated category increased in grade by 212% to .59 g/t Au. Indicated ounces were up 161% to an Ag equivalent grade increase of 312% and that’s for only 8 veins of 70 mapped.

In the inferred resource silver grade was up 185% to 58 g/t Ag. Gold grade shot up 363% to .74 g/t Au and the Ag equivalent went up 235%.

At the higher grades included in the new 43-101, ATX is now showing 34.7 million silver equivalent ounces. With a market cap of only $14.1 million, it means the market is only valuing Argentex at $.41 an ounce. Given that the recent takeover of Orko by CDE valued silver at $1.40 an ounce in a mature and fully explored project it’s pretty obvious that ATX is going to be worth a lot more in a more vibrant market.

I have some strongly held biases as anyone who knows me full well understands. I am not a fan of the “Explore until the cows come home” school of mining investors. There are probably 1200 juniors out there holding a 43-101 in one hand with their other hand outstretched waiting for someone to drop them a check with a lot of zeros in it. 99% of those guys have been standing there waiting for someone to drop a check in their hands for their entire careers. They might as well be holding their wienies for all the good that it is going to do.

Mining is not about spending money, contrary to the attitude of most mining guys. At some point investors have to see some real rate of return or there won’t be any investors. For the last dozen years, as gold went from $252 and silver from $4 to $1923 and $49 and change respectively, investors got the shaft while management got the gold.

If a company doesn’t have a plan for production at $30 silver and $1600 gold, they should be raising moose because that’s all the land is good for.

When I visited Pinguino last year I brought up the issue of production with Peter Ball, VP Corporate Development. While not willing to swear under oath, Peter let me know that internally they were looking to have 20 million ounces of silver equivalent in oxide material to justify a mine plan. They are either there or very near there with the latest 43-101. MDA indicated to ATX that with a little more drilling they could have another few million ounces of silver added to the inferred category. Currently about 50% of the material is oxide and another 10% is transition material.

A little over a week ago, Argentex released metallurgy tests showing silver recovery up to 81% and gold recovery up to 69% with a 45 day leach cycle. Bottle roll tests showed recoveries of up to 95% for silver and 94% for gold with the oxide material. In other words, a heap leach would work.

I would not be surprised to hear of ATX announcing plans for a PEA soon. The project is a production story and investors would bid the shares up if they felt the company was moving to production.

ATX is an advertiser and I am naturally biased. The company offers investors a low price way of investing in a primary silver deposit. I am on record as believing we have hit a major bottom and I believe all juniors will be higher in the 12-18 month ahead period. Take some responsibility for your own decisions and do your own due diligence.

Argentex Mining Corporation
ATX-V $.20 (Mar 4, 2013)
AGXMF-PK 71.7 million shares
Argentex website

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Bob Moriarty
President: 321gold
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