Silver Discovery in Mexico

Precious Metals
NYSE:CDE

Dale Britliffe, senior geologist at Orex Minerals, talks about the company’s Sandra Escobar discovery and Orex’s plans for the remainder of this year.

The Investing News Network had the chance to speak with Dale Britliffe, senior geologist at Orex Minerals (TSXV:REX), about the company’s Sandra Escobar discovery and plans for the remainder of this year.
Orex has seen success in the past via a partnership with Fresnillo (LSE:FRES) in Mexico and via a joint venture agreement on its Barsele project in Sweden with Agnico Eagle Mines (TSX:AEM). Now, there’s a fair bit of buzz around Sandra Escobar, a joint venture with Canasil Resources (TSXV:CLZ).
Listen to the interview below, or read the full transcript, for what Britliffe had to say.

Interview Transcript
INN: So we’re here to talk about the Sandra Escobar discovery. The big discovery in Mexico this year. Can you tell us a bit about that?
DB: This is a project Orex has a JV with Canasil Resources . It was a project that Canasil have had in their portfolio for some time, and they’ve done some exploration. They’ve done a small amount of drilling.
But this eastern area had not been touched. It was added by Canasil later on. And last year, they were in a position where they were looking for some help in doing some work on that project. We were looking for a project, and it seemed to be a good fit. Yes, the project itself is hosted in a rhyolite pyroclastic tuff. There’s silver mineralization there that was exploited by the old timers in the form of veins. There’s quartz veins, two to three inches thick at their greatest and the exploitation there was not huge. The big breakthrough that Canasil made earlier in the piece was that they sampled the wall rock around the veins and discovered that the wall rock mineralization was just as rich, if not richer than the veins themselves.
INN: Interesting. And I understand you’ve had some pretty impressive intercepts this year?
DB: Well, maybe we got lucky, maybe we didn’t, but from our service work, we identified a few showings that definitely needed drilling straightaway. We had large outcrops on surface that were richly mineralized, and so we set about drilling them. In December last year, we drilled hole one and that hole came back with an impressive 61 meters at 359 grams per ton silver with a true width of about 43 meters.
INN: And the mineralization is fairly, evenly disseminated as well. Is that right?
DB: Yes, this is a new style of mineralization for us. It seems to be a 40 meter thick blanket of disseminated silver mineralization hosted within a porous permeable crystal tuff.


INN: And how is your JV with Canasil structured?
DB: Orex is currently earning 55 percent of the project by spending $2 million in the ground and there was an initial $500,000 payment to Canasil.
INN: How far are you towards that $2 million?
DB: We’re getting close. We’re over a million now and we’re drilling currently, so I expect us to hit that $2 million mark very soon.
INN: Interesting. And this isn’t your first joint venture in Mexico as well. You have another one with Fresnillo not too far away?
DB: Yes, the Coneto project is a more classic epithermal style silver-gold vein system. The history of that is that Orex and Fresnillo both held claim packages in the area but in order to move that area forward, it was advantageous for both companies to join their claims together and control the whole trend. The trend itself, it’s an erosional window that’s about 16 kilometers long and 2 kilometers wide. There are up to 50 veins there on that project. Fresnillo had the smaller claim area but they are acting as operator on that project. They have now completed their $6 million in the ground exploration expenditure to get us to the point where the joint venture is to be formed, and it’s my understanding now that the joint venture — the 45 percent Orex, 55 percent Fresnillo — is now in place.
INN: That sound great. And the exploration team at Orex has had quite a few past successes as well. Can you tell us about those?
DB: Yes, this is the same group that discovered the La Preciosa deposit. The La Preciosa deposit was an epithermal system that had been known in the area, that had been exploited and in 2004, 2005, Orko Silver (TSXV:OK) started exploration on La Preciosa and over the course of the next 10 years, and have upgraded it significantly and sold it to Coeur Mining (NYSE:CDE) in 2012 for a large sum. I can’t remember the exact number but it was impressive.
INN: So how many mines has your team sold?
DB: To date, there wasLa Preciosa—Orex also had the Barsele project in Sweden that they now have a JV with Agnico Eagle on. Agnico is acting as the operator there. They’ve bought a 55 percent share of that project for $10 million US. And they’re drilling right now and they’re having great success. So we’re happy with that.
INN: I mean, we’re at the Spot Conference right now and I’ve heard quite a bit of buzz around Orex in particular. Do you have any idea why that might be?
DB: Well, I think it’s the team. I think people are excited to see the Orko Silver success transition into the same type of success with Orex. Orex advertised last year—Orex was trading around 20 cents. They split one for one. They were getting no value for their Swedish property, so they spun out a new company that took the Swedish asset. Agnico Eagle paid Orex the $10 million—$6 million with $2 million staged each subsequent year—and so shareholders in Orex as of the beginning of last year have now seen some great share appreciation in both companies. I think today, the combined share price is up almost at $2.
INN: And what can investors expect next from Orex this year?
DB: We’re going to continue our work on Sandra Escobar. We’re going to continue to try and increase the resource. We’re waiting on a resource right now and one would hope that we’re going to continue to generate a lot of interest because I see some good potential in this property.
INN: And finally, how much of Orex does management own?
DB: It’s around 25 percent I believe is the number.
INN: Okay, that’s good to see. Thank you for joining me.
DB: My pleasure.
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Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.
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