A company called Pinnacle Silver and Gold is working diligently to prepare for the restart of a rich gold and silver mine project located in the Sierra Madre Occidental in Durango, Mexico. This project is not entirely new; it has a history. It existed 35 years ago but was closed in 1990. Now, the company plans to revive it and make it shine again.
What Gives Them the Confidence to Restart the Silver and Gold Mine?
Pinnacle Silver and Gold is not unprepared. They see several key advantages:
- Existing Infrastructure: Although the plant has been closed for many years, the infrastructure remains, providing a foundation for a quick start.
- Rehabilitating Old Mines: There are three old mines within the mining area that can be put back into use after rehabilitation.
- Cash Flow Driven: The company plans to develop through cash flow, reducing reliance on the stock market and avoiding dilution of shareholder equity. This model has been successful for Great Panther.
Returning to Mexico: Familiar Environment and Opportunities
This company is not a newcomer. They have achieved success in Mexico before, and now they are returning to this land with confidence. Durango itself is a mining-friendly state, and local residents are very supportive of the mining industry.
The company's new project is located in the Topia mining district, just 13 kilometers from the Topia mine. The Topia mining district is a mining center, with three other mines within a 35-kilometer radius.
Mining Friendly, Community Supported
Topia itself has benefited from the development of the mining industry. The population has grown from 3,000 in 2003 to 9,000 today, thanks to the contribution of the mining industry. The area has a skilled workforce, as well as supporting industries such as services, supplies, and mining contractors.
Permitting Advantages
Compared to large open-pit mines, this project has a smaller footprint, is located underground, and has a relatively small environmental impact, which gives it an advantage in permitting approvals. In addition, the mine site is already a disturbed site, eliminating the need for large-scale environmental studies.
Exploration Plan and Timeline
In the first week of taking over the project, the company began surface mapping and sampling. They have cleaned up three old mines and completed sampling of one of the mines, Pinosquatus.
The sampling results from the Pinosquatus mine are very encouraging, with gold grades of up to 37 grams and silver grades of up to 375 grams sampled from the tunnel top channel. Surface sampling also yielded grades as high as 2280 grams of silver and 13 grams of gold.
Next, the company will continue mapping and sampling, assess the condition of the plant, and hire experts to conduct permitting assessments. Drilling is expected to begin in the fall.
Project Restart Funding Needed?
Pinnacle Silver and Gold estimates that it will take approximately $2 million to $3 million to restart the project.
How Long Before Production Can Be Restored?
If all goes well, they expect to be able to resume production within two to three years. Of course, the biggest uncertainty remains permitting approvals.
Pinnacle Silver and Gold vs. Great Panther
| Project | Pinnacle Silver and Gold | Great Panther |
|---|---|---|
| Location | Located in the Sierra Madre Occidental, Topia mining district, Durango | Located in northwestern Durango, Topia mining district, and actively seeking other acquisitions |
| Business Model | Develop through cash flow, avoiding over-reliance on the stock market | Develop through cash flow |
| Restart Time | Estimated in two to three years | Acquired Topia mine in 2004, resumed production in 2006 |
| Experience | Has operating experience in Mexico | Has operating experience in Mexico |
Pinnacle Silver and Gold's goal is not just to restart a mine, but to build a sustainable company. They plan to use cash flow to drive growth and actively seek other acquisition opportunities, replicating Great Panther's success model.