El Tigre wants to turn old tailings into cash for exploration

VANCOUVER — If things work out according to plan, El Tigre Silver (ELS-V) will be producing silver before year-end from historic tailing dumps at its Mexican property. These ounces will give El Tigre the income it needs to keep drilling for the untapped silver and gold hiding in Sonoran rocks.

El Tigre’s namesake project is located in northeastern Sonora state, 90 km southeast of Aqua Prieta on the U.S.-Mexico border. The project has a history: between 1903 and 1938 the El Tigre mine churned out some 75 million oz. silver and 320,000 oz. gold, pulled from three high-grade epithermal veins laced through the hills.

The historic mine was no small operation, with 15 mine levels extending along 1.5 km of strike and reaching across 450 metres of vertical. It was shut down in 1938 — not for lack of ore, but for lack of returns. The price of silver had collapsed from US60¢ per oz. to just US30¢, rendering the mine uneconomic.

Today, though, it’s a property rife with opportunity.

First, there is still gold and silver in those hills. The property sits at the north end of the Sierra Madre belt, an area renowned for precious metal mineralization, and the old El Tigre mine is proof that the Sierra Madre’s mineralization made it this far north. Ore extracted from the mine averaged 1,200 grams silver per tonne and 8 grams gold per tonne.

The mine’s 15 oz. per tonne silver cut-off grade means miners left behind any rocks carrying less than 460 grams silver. As such, the supposedly mined-out sections of the veins still contain a lot of silver. The mine also ceased operations before reaching the known limits of the three main veins, which translates into another stash of remnant mineralization.

The real excitement for El Tigre, however, is the potential to find faulted extensions of known veins and undiscovered veins — in other words, to find new mineralization.

To test this theory, the company has spent the last few years probing the hills along strike from the old mine.

Between surface mapping and studying almost 18,000 metres of drill data from owners old and new, El Tigre has mapped the prospective strike for more than 5 km.

In the current 5,000-metre drill program the company is focused on a 1.2 km segment of the 5.3 km long zone.
The southern portion is of interest because El Tigre thinks it might host bulk-tonnage disseminated gold mineralization alongside the known high-grade veins.

Results from the latest seven holes support this notion, with good grades over 20- to 70-metre widths.

Hole 51 returned three such intercepts: 22 metres grading 0.89 gram gold and 6.38 grams silver, 25.5 metres of 2.93 grams gold and 20.9 grams silver, and 25.1 metres grading 1.35 grams gold and 43.9 grams silver, all lying between 22 and 134 metres depth.

Hole 56 cut 70.4 metres of 1.04 grams gold and 55.8 grams silver from surface. Hole 55 hit into 47.5 metres of 0.53 gram gold and 34.7 grams silver from 12 metres depth, and hole 53 returned 46 metres carrying 0.74 gram gold and 14.4 grams silver.

The holes tested the Brown’s Shaft area, which is near the divergence of the El Tigre and Seitz-Kelly veins. El Tigre was the primary vein mined in the old operation. Seitz-Kelly was also mined, but to a lesser degree.

The previous six holes tested the El Tigre vein further downdip. Each hole penetrated the mineralized stockwork that makes up the vein’s hangingwall and footwall.

Notable results included 57.6 metres grading 0.68 gram gold and 17.8 grams silver from 18 metres down hole 50, 119.5 metres grading 1.21 grams gold and 29.5 grams silver from 3 metres down hole 49, and 48.7 metres grading 0.595 gram gold from 19 metres down hole 45.

The current 5,000-metre drill program is nearing completion, with many of the results pending. Once they are in, El Tigre can calculate its first resource estimate after several years of drilling.

“We did a drill program in 2011 that was broadly spaced,” said Stuart Ross, El Tigre’s president and CEO. “In 2012 we were a little more targeted. This year it is strictly limited to a 1.2 km length, which will give us the spacing we need for a block model. There is a lot of ground to test, but for us to get a block model we just had to focus on a smaller length.”

Ross is pleased that the drill program at El Tigre is going smoothly and producing good results. But he has been distracted by another task: raising the $5 million his company needs to process the silver-rich tailings sitting in dumps around his property.

There are between 700,000 and 1 million tonnes of tailings piled at El Tigre that carry 80 grams silver and 0.3 gram gold.
Metallurgical test work shows that agitated leaching recovers these precious metals at a rate of 79% for silver and 94% for gold.

El Tigre would like to build a facility that regrinds the tailings once and sends them through the agitation-leach process at a rate of 400 tonnes per day.

This would cost $5 million.

El Tigre has enough money in the bank to fund its exploration program throughout the year, but it needs to raise the cash to fund the tailings project separately.

“We’re looking for a reasonable, non-equity type of funding to procure the equipment and go ahead and build it,” Ross says. “There are some funding arrangements available that are either very dilutive or very expensive, so we’re being a little picky in finding one that suits our shareholders and our board of directors.”

Ross says they have been looking for the full $5 million to fund a 400-tonne-per-day facility, but they are also open to spending half that amount to build a 200-tonne-per-day operation.

“At 200 tonnes per day, if you look at the grades and the recoveries, there’s still a significant amount of cash that will come out of the operation,” Ross says. This cash would let El Tigre focus on its real goal: finding enough new mineralization to get the historic silver-gold mine back in action.

El Tigre’s share price has been range-bound for the last year, moving between 18¢ and 30¢. It currently sits at 20¢.
The company has 52.9 million shares outstanding, for a $10.6-million market capitalization.