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Eloro 43-101 Explained   

Bob Moriarty

Sep 5, 2023

Eloro Resources (ELO-V, ELRRF-OTCQX) released a long awaited initial 43-101 resource last week. Bored shareholders promptly responded by dumping the stock price by 23% in spite of an outstanding set of numbers.

Everyone seems to hate the junior resource sector right now. It’s been dropping since last March and seems headed for the graveyard. I’ve watched it closely for twenty-five years and never seen such gloom. That’s what you get at bottoms. The chart of the XAU over Gold shows the most pessimism in three years. That’s a good thing. We are in the process of turning.

(Click on image to enlarge)

The release showed an inferred resource of 1.15 billion ounces of silver EQ with a total 670 million tonnes of ore with 97% being suitable for an open pit. The resource was based on over 96,000 meters of drilling in 139 drill holes. The holes were drilled on 100 meter spacing so infill drilling is expected to add to the total number of tonnes and increase the value of the ore.

I wrote about the company back seven months ago and frankly my piece did a better job of telling the real story behind Iska Iska than the press release. Since the project is polymetallic, the QP insisted the value numbers be put as a net smelter return (NSR). That has left ordinary investors just as confused as I am because there is little relationship between those numbers and the drill results. I did make a comment in the piece done last February that I would like to highlight.

    • 43-101 has forced a focus on defining a resource. In some ways, that is a noose around the neck of the mining or exploration company with a lot of companies thinking of nothing but generating a giant resource.

Iska Iska is a collapsed caldera. Hot mineralized fluids seeped from below through the displaced rocks in the caldera and precipitated out as chemistry and pressure changed. It’s a giant system. In the piece I wrote last February I made an assumption that has proven to be misleading.

    • If you pointed a gun at my head, I would guess it would be in the 400 million to 700 million tonnes of $100 to $125 CAD a tonne rocks at today’s prices. That’s ten to fifteen years production of rock worth maybe $115 a tonne or production of about $5 billion a year in total revenue.

I neglected to take into account the 100-meter spacing between holes. So when the QP fed the assay results (which have always been fantastic) into his resource program the software presumed the area between holes was low grade or barren. In my view the NSR numbers in the 43-101 clearly do not reflect the average grade or value of the material between the 100-meter spacing but the software program has to discount the grade.

There are 139 drill holes so far. All hit mineralized material. None of the holes showed similar values to the numbers in the 43-101 because the 43-101 had to guess at the value in the spaces between the drill holes.

When Eloro planned their drill program they determined that they should attempt to find the margins of the mineralized body. After all, when drilling, you need to know two things. One is where the mineralized body is. The other is where it isn’t. So they drilled on wide spacing of 100 meters.

The 43-101 represents a giant mineral resource. I don’t remember another drill program that defined a 670 million tonne resource on the initial 43-101. There are only a few mining companies in the world capable of taking on a potential multi-billion tonne deposit. While I have made a rookie mistake guessing at the dollar value of the NSR material, they will do no such thing. They can read assay results as well as anyone can and will take heed.

Eloro has proven Iska Iska is a giant system. The professionals can use Kentucky Windage and guess at the real rock value. I still think it will be in the $100-$125 a tonne range which would mean a minimum value for rocks in the ground of $67 billion up to as much as $83 billion. So I suspect now Bill Pearson, VPX and Tom Larsen, CEO will now choose to do a tonne of infill drilling to reflect the real rock value. I’d like to see a major come in with a $25 to $50 million buy-in to fund the ten drills program they really should have turning.

Eloro is an advertiser. I have bought a lot of shares in the open market and in private placements. It is one of my larger positions. I am biased, so do your own due diligence, please.

Eloro Resources Ltd
ELO-V $2.38 (Sep 01, 2023) 
ELRRF-OTCQX 76.8 million shares
Eloro website


Bob Moriarty
President: 321gold

321gold Ltd

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