Grenville Gold’s Suitors Are Lining Up To Dance
By James West
Grenville Gold Corp. (TSX.V:GVG) looks poised to get gobbled up by any number of suitors, if the recent flurry of press releases are any indication.
And judging by the companies doing the courting, it would appear that some know more than others, in terms of where the real value may lay in this dynamic little company. It appears that the companies lining up to kick the tires are all well established in Peru.
The focus of all the attention, or most of it, is a group of 4 mines the company acquired recently on a little shopping spree. The four mines were owned and operated independently of one another by four different companies. All four mines are part of the same vein system, which produced some bonanza grades of silver, lead, zinc and gold. They are the Germania, Pacococha, Millotingo and Silveria mines, which Grenville has collectively named the Silveria Project.
The Silveria Project mining operation is part of the Viso-Aruri mining district located in the
San Mateo District, Department of Lima, Province of Huarochiri, in the central Andes of
Peru.
Published documentation on historical production, reserves, reserve ore grades and estimated mine life at December 1990 on the Millotingo and Pacococha Mine pegs the minimum historic production from these two of the four mines at 18 million ouncers of silver, 88 million pounds of copper, and 96.8 million pounds of zinc. Grenville believes a potential target grade of 113.4 grams (4 ozs) per ton silver, 1% copper, and 2.5% zinc is attainable over a potential target tonnage of between 10 and 25 million tons of ore grade material.
But there is even easier, lower hanging fruit to be plucked from the Millotingo mine site.
The Millotingo tailings dam was recently sampled, and Initial estimates of tailing grades reveal between 85 grams (3 ozs) and 567 grams (20 ozs) per metric ton of silver, and between 1 and 3 grams per metric ton of gold.
So who’s sniffing around?
On May 23, Grenville announced in a press release that Compania Minera Ares S.A.C., a subsidiary of the Hochschild Mining PLC, was reviewing historic data and conducting a site visit at the Silveria Mine.
Hochschild Mining PLC (LSE: HOC.L) is headquartered in Peru, listed on the London Stock Exchange, and is a leading precious metals company with a primary focus on the exploration, mining, processing and sale of silver and gold. Hochschild is focused on the development of its high-grade reserve base and has a proven track record of consistent reserve replacement, sustaining the reserve and resource base.
On April 18th, in another press release, the company announced that “Solway Andes SAC, a subsidiary of the Solway Group (www.solwaygroup.com) plan to send three senior geologists to Peru for one month to conduct a site visit at the Silveria Project, review data from various Grenville projects and meet with Grenville project consultants, managers and geologists in order to complete its due diligence.”
Solway Andes S.A.C. is a South American subsidiary of Solway Management which is a sole and
exclusive asset management company of Solway Investment Fund, a private equity investment
fund specializing in worldwide strategic investments. Solway Investment Fund is owned by a
small group of experienced international investors and employs over 8 ,000 people worldwide. Solway’s total assets exceed US$900 Million.
Now obviously large mining groups pouring over data and poking around in the old mine is no assurance that any kind of a deal is imminent, but it certainly is a positive indication.
Another plus is the fact that Goldhawk Resources Inc (TSX.V:CGK) in 2006 paid US$12 Million for their Tamboraque project, which is 2 km from the Silveria project, and part of the same mineralized system as those within Grenville’s project.
According to Goldhawk’s 43-101 pre-feasibility report filed in April of this year (Note that Goldhawk has renamed the project from “Tamboraque” to “Coricancha”):
“The mineralization of the Coricancha operation consists of low-sulfidation, narrow veins containing gold, silver, lead, zinc, and copper that filled the main fractures of the system (Constancia and Wellington Veins) as well as other tension-type veins such as the Rocío,
Colquipallana, and Animas.
CMSJ’s estimate of mineral reserves indicates that the combined total of the Constancia
and Wellington Veins contain 436,500 tonnes of proven and probable material averaging
5.09 grams per tonne of Gold, 161.29 grams per tonne of Silver, 2.72% Lead, 2.52% Zinc, and 0.31% Copper. It is Gustavson’s opinion that the CMSJ estimated reserves meet the current Canadian Institute of Mining (CIM) guidelines and requirements.”
If Silveria’s grades turn out to be comparable to Goldhawk’s, there could be a monster of a mine there. Bear in mind that all of the mining and exploration to date have focused on development in the mountain rising above the valley floor, and no exploration has been conducted below the valley level. All of these fluids are typically forced upward, so the best place to look for more mineralization is below that which has already been discovered.
Grenville presently has a great deal of work underway at Silveria.
Knight Piésold has reported approximately 50% completion of its environmental scoping study project. Knight Piesold has completed its mine sight inspection, has examined waste rock dumps, and tailings dams, and is in the process of making numerous recommendations regarding the location of a new tailings facility, location of a new waste rock dump, and opinions on the reprocessing of existing tailings dams. The 3D modeling program of the Pacococha veins is near completion and will be followed by 3D modeling of the Millotingo vein system.
Knight Piésold is a specialised international consulting company offering engineering and environmental services in Mining, Environment, Hydropower, Water Resources, Roads & Construction Services.
I’d like to wrap this up with an explanation of why I am such a firm believer in Grenville Gold.
When I first was introduced to the company, it was trading at $0.15, Silveria wasn’t in the picture, and the company owned a piece of a half of a tiny diamond project in Ontario. But the reason I even agreed to look at the project was its new chairman, Len De Melt.
Len is a large man with a booming voice and a no-nonsense approach to mining. He’s not a theory guy….he’s a miner’s miner.
By that I mean, he has spent his life working underground and in open pits, in virtually every mining jurisdiction in the world chasing everything from diamonds in Nanavut to Uranium in Australia.
Trying to keep up with his giant strides as he marches up and down Peruvian mountainsides is an exercise in endurance. He works tirelessly and travels in and out of Peru’s remotest regions in search of the next Yanacocha, which is Newmont’s big gold mine and the 3rd largest gold mine in the world. De Melt did a stint there improving head grades and production flow.
“I like Peru because it’s the land of giants,” he explains. “If you want to find other giants, you go to where they’ve been discovered in the past. I’ve been exploring in Peru for over 10 years now. I speak the language, and my partners are well connected in the government. Why would I search elsewhere?”
Exactly. Why would I search elsewhere for companies to write about when Grenville, which has quadrupled in value is just over a year, is sitting right under my nose.
