Don’t know the reason, stayed here all season
Nothing to show but this brand new tattoo
But it’s a real beauty, a Mexican cutie
How it got here, I haven’t a clue…” — Jimmy Buffet, Margaritaville
No, I wasn’t down on the beach in Mexico with Jimmy Buffet, nor did I get a new tattoo. But I did spend four days in Toronto at PDAC – the largest mining conference in the world, sponsored by the Prospectors & Developers Association of Canada.
This was the first PDAC conference in over two years, since March 2020. After that (I’m sure you recall!), much of the world shut down for Covid. But now it’s all getting back on track and this year’s event was one for the record books. For example, there were lots of people – so many that the Toronto Police were outside for crowd control.
Much happened in Toronto this past week, but I’ll skip the vignettes and nail down on the main point.
After a period of not being able to travel, visit sites, keep up to date with things, etc., at PDAC I reconnected with three great Mexican mining plays, and each one is a “real beauty” per the Buffet approach.
One is an up-and-running producer that mines ore and makes money. One is a prospect generator that’s doing quite well in the search for copper, silver and gold. And the third is a promising silver explorer, working in classic silver country.
Here’s a summary:
The producer is Avino Silver & Gold Mines Ltd. (NYSE American: ASM | TSX: ASM) (Avino). The company works near Durango, in a silver district that dates back to the mid-1500s (yes, almost 500 years!). Spanish conquistadores found silver, and successors mined the area for several centuries. The silver made Durango quite a wealthy venue for a time.
Since 1968, Avino has been taking the old Spanish and Mexican mines even deeper, into richer and richer ore bodies. I visited the site a while back, and in one excursion to the 800-foot level, I saw a massive face of near-pure sphalerite (ZnS) – zinc sulfide. This is just some of what comes out of the lifts, other ores bearing lead, silver and gold.
Like many companies, Avino was forced to slow down during Covid, but it’s now firing back up to a hot pace. It sells high-quality metal concentrates into a strong market – one key buyer is Korean giant Samsung. Now, Avino is on a growth track, and whatever happens with the rest of the stock market – crashing lately, you may have noticed – this “beauty” is positioned to move ahead and do well through the turmoil and out into the other side.
The next “beauty” is Riverside Resources Inc. (TSXV: RRI | OTCQB: RVSDF), a company that has been working in the northern state of Sonora for 20 and more years. Over time, Riverside has accumulated a large portfolio of mineral claims. Its business model is to team up with third parties to spend what management likes to call “other people’s money” on exploration and early-stage development.
Right now, the strong suit for Riverside is its relationship with mining giant BHP. That is, BHP is funding a major effort by Riverside to identify large-scale copper plays in Mexico. In this regard, BHP pays the overhead while Riverside works through its list of exploration prospects to match geologic potential to what BHP wants to see.
There’s serious upside from the fact that Riverside has already identified a good number of copper deposits that may suit BHP, as well as other deposits that are not exactly a BHP-match, yet still hold great upside for other development by other companies down the line.
In a world of future high demand and fading supply for critical minerals, Riverside is positioned to shine.
The final “beauty” on the list is a silver exploration play called Minaurum Gold, Inc. (TSXV: MGG | OTCQX: MMRGF). And yes, the name says gold but the exploration focus is definitely silver.
Minaurum works around the town of Alamos, in southern Sonora. This too is an old silver district from Spanish days, when miners pulled native silver – elemental “wire silver” – out of massive veins near the surface. In fact, there was a Spanish mint there for quite a while, which coined silver currency for use across old Mexico and the Spanish empire.
Old-style mining could only go so deep, though. And today we know that there’s a massive complex of mineralized rock remaining to be explored. It all lies beneath a vast, ancient, caldera-collapse volcano, with extensive “ring dikes” spreading outwards in all directions.
I’ve visited the site, and while it’s quite rugged it is also a promising exploration locale. Minaurum has released strong drilling results to date, with more to come. And again, in a world of monetary turmoil and looming shortages of critical metals – silver among them – this “beauty” deserves a good, hard look.
That’s all for now. Best wishes to everyone as we all navigate the current market and monetary rough seas.
Byron W. King