Writer: Riley O’Neill
Prime Meridian Resources Corp. (TSXV: PMR) made a very significant strategic move with the planned acquisition of the previously producing La Verde copper-silver property in Sonora, México. The property is located 50 kilometres northwest of Hermosillo City and is comprised of 9 previously permitted concessions totalling 2,439-hectares.
The La Verde Project has excellent power, water access and road infrastructure and a skilled local labour force nearby. The La Verde acquisition transaction has received conditional approval from the TSX Venture Exchange.
The previously producing La Verde Grande Mine is contained within the Project and was the subject of historical copper and silver production between 1903 and 1981. The Project also contains multiple small surface mining works identified within an area of 12 square kilometres surrounding the La Verde Grande Mine.
The La Verde Mine area has an historical resource of 459,551 tonnes at 2.28% copper, 103.61 g/t silver, and 0.36 g/t gold, however this estimate predates 43-101 guidelines. This historic resource estimate was made for the central mineralized area of the La Verde Grande Mine and covers only 110 meters of known strike of this mineralized skarn-style orebody.
In addition to the La Verde Grande Mine, the Project contains multiple Copper-Zinc-Silver-Gold skarns and breccias including additional surface mining works within an area of 12 square kilometres surrounding the La Verde Grande Mine.
Much of the skarn-style mineralization is near the surface, supporting a cost-effective open-pit operation. The copper can be recovered through a lixiviation operation with sulfuric acid, and flotation for recovering the silver, gold and zinc. In this instance, lixiviation is simply a process of separating soluble from insoluble substances by dissolving the soluble substance in sulfuric acid. The ore at La Verde responds well to this process.
The La Verde Project also has significant potential to host a major copper porphyry system based on historical drilling and surface work. The most recent porphyry exploration was in 2000, when Freeport McMoran completed 8 diamond drillholes which tested several coincident geochemical and geophysical anomalies. The drilling encountered weak sericite and silica alteration which contained anomalous values of copper and molybdenum northeast of the La Verde Grande Mine. Freeport intended to advance its copper porphyry exploration in a southwest direction toward the La Verde Grande Mine, but the company terminated all exploration activities in Mexico at the end of 2000. It is the opinion of Prime Meridians management, that the copper core of the porphyry system is proximal to the skarn-style copper mineralization identified on surface at the La Verde Project.
Prime Meridian has stated that it intends to aggressively explore the property to expand the size and scope of the skarn-style mineralization toward 10 million tonnes as the Company believes it can quickly move towards a preliminary economic assessment.
“We have been financing and developing copper projects in Canada, the USA and Mexico for over 20 years and the opportunity at La Verde is the best I have seen over that time period, as it provides a potentially significant value proposition from the combination of a near-term production opportunity from the skarns and the exciting prospect of a new copper porphyry discovery in one of the world’s most productive copper belts,” said CEO Brian Leeners at the time of the announcement of the transaction to acquire the La Verde Project.
Prime Meridian’s management approaches the mining business like a start-up where they seek out new projects that have near-term cash-flow potential. The La Verde Project certainly meets this criteria, and pending initiation of production, could generate enough cash flow to negate future dilutive financings.
With a current market capitalization of less than US$4.0 million, Prime Meridian Resources (TSXV: PMR) represents an excellent ground-floor opportunity for junior resource investors looking for copper and silver exposure.
Prepared by Riley O’Neill on behalf of Prime Meridian Resources Corp., a Stockhouse Publishing client.