Baroyeca Gold and Silver (TSX-V: BGS) - Raising Money for Colombia Projects

Baroyeca Gold and Silver Inc. is a Canada-based company primarily focused on the exploration of precious metals projects in Columbia. The company’s Atocha flagship silver project is located in the richest colonial primary silver district of northern Tolima, and the Santa Barbara gold project in Bolivar.

Merlin-Marr Johnson caught up with Raul Sanabria, President, and Director, Baroyeca Gold and Silver. Raul has more than 20 years of progressive experience in the mining and exploration industry worldwide with a long trail of discoveries. He has worked in Europe, West Africa, Canada, and several countries in Central and South America, mainly exploring precious metals. Raul has been continuously developing projects in Columbia since 2010. He is an early mover in private mining projects in Columbia, such as Condor Precious Metals Inc., developing the Santa Ana project until its sale to Red Eagle Mining, along with Malabar Gold Corp./Minera Fortuna and Minera Colibri Gold SAS. He consolidated and assisted in materializing ASM Fluorspar mining in Utah into Ares Strategic Mining, where he currently serves as the Vice President of Exploration. Recently, he held senior exploration positions for Rover Metals Corp., Victoria Gold Corp., Tudor Gold Corp., and Red Eagle Exploration (Columbia Projects). He is also the former Vice President of Exploration at American Creek Resources, G4G Resources, Northern Iron Corp., and Principal Geologist and CEO for Condor Precious Metals Inc. His educational credentials include an M.Sc. in Geology from the Universidad Complutense de Madrid (Spain) with a completed thesis in Fe-REE-Skarn deposits. He is a QP (Qualified Person) for NI43-101 purposes.

Company Overview

Baroyeca Gold and Silver is a value-based company, committed to investing in local communities while operating in a safe, sustainable manner. The company was founded in 2006 and is headquartered in Vancouver, Canada. Baroyeca Gold and Silver De Mexico, S.A De C.V. is the company’s subsidiary. It is listed on the Toronto Stock Exchange (TSX-V: BGS), The OTC Markets (OTCQX: BRYGF), and the Frankfurt Stock Exchange (FRA: 8BY1.F).

Baroyeca Gold and Silver has assets in Columbia.  The company’s representatives recently attended the Mines and Money conference in London for the first time. The market has hammered a lot of companies in recent times, which has had a direct effect on stock prices. The company is currently in the middle of a financing, which would enable it to carry out a drill program at the beginning of the next year. The capital raised will be used for drilling the Santa Barbara Gold Project and carrying out exploration at the Atocha Silver Project.  The company is confident in Columbia’s mining potential.

The company announced a $2M capital raise at 10 cents a share with a 20-cent full warrant for two years. While the company isn’t delivering now, it raised the full $2M which is included as a massive dilution. In April-May 2022, the company was trading at 50 cents, following which, the stock went down to 25 cents. The capital raise will allow the company to pay off the upcoming option payments.

It has a very low rate with its drill company, which is a family-operated business. The company drilled at Atocha and shut down the operations. Following this, the company plans to focus on the Santa Barbara asset. Here, the company is looking to carry out a 1,500m-2,000m drill program, which is expected to cost around $200,000. The company is looking to prove the presence of high-grade material under the tunnels, which was previously proved through bulk sampling around the refurbished Mariana Mine. The company put a number of holes underneath it and it expects to have cost overheads over the next six months. $1M will enable the company to carry out these operations. In its current position, the company only has 10 million shares to offer to the market.

Operating in Columbia

Given the changes in Columbia’s political landscape, there were concerns in the mining industry. Pietro has held the office for a few months now, and there is an increased focus on preserving the environment. However, it is important to note that these changes haven’t affected precious base metals like gold and silver. The country is focused on energy transition metals. Due to this, the oil & gas companies now have a reason to be concerned about new exploration licenses not being issued. It is important to note that if a company has an existing exploration license, it can continue working without problems. It is highly likely that new exploration licenses for coal mining won’t be issued. The government is now promoting operations in precious metals, base metals, and energy transition metals, including lithium, copper, and gold. Baroyeca Gold has not faced any obstacles and it can continue drilling and exploring as before.

The Director of the Ministry of Mines comes from an environmental background. This is considered both a good and a bad thing. If stricter regulations are introduced, there won’t be a lot of problems as local and Canadian mining companies are already focused on the preservation of the environment. These companies recognize the hazards of artisanal and illegal mining. Artisanal mining usually involves throwing the waste products like mercury into the rivers without any neutralization.

Canadian companies already have a set of standards when it comes to good mining practices. As a result, Baroyeca Gold and Silver does not expect to see any major changes. It is open to adopting the new measures. According to the company, some projects are now being vetted. The government is focused on protecting the paramos in the moorlands, located at higher elevations. The Ministry of Mines has already started the process at the Santurban projects located within the region. At the same time, the projects located at a lower elevation such as the ones in Antioquia, Mocoa, and Tolima won’t be affected.

Baroyeca Gold and Silver’s operations aren’t located in protected forests. The government is looking to extend some forestry reserve areas, which could potentially overlap some mining concessions, titles, and mining applications, reducing their overall size. Since the company’s projects aren’t based in these areas, it is not worried about the ongoing changes.

The Atocha Project continues to be a district-scale asset. Baroyeca Gold and Silver along with its neighboring companies are looking to prove the potential of Atocha and the Santana silver district, especially in the primary silver district region which is completely unexplored. The company’s neighbors are expected to publish a resource update in the near future with high-grade results and significant expansion potential. While this region is years away from development, it is expected to be a major project. The region features a series of veins and fractures among the structures. These veins need to be individually mined and processed through a central facility. The process is commonly known as underground hybrid vein mining.

Ongoing Operations

At the Santa Barbara Project, the company has identified the veins through bulk sampling. The company halted the operations as the veins were spread across two mining concessions, requiring independent permits. The company recently got the resolution of accepting the title transfer to the southern part of the land package. Based on this, the company is now focusing on the mine plan which was meant to be licensed.

The company isn’t looking to produce or generate a cash flow from the bulk sampling. Since the bulk sampling work was on a thin line between mining and not mining, it decided to conduct exploration instead. The company decided to file a mine plan and upgrade it for a 50t per day operation. The 50t per day operation will be conducted with three mine phases across three tunnels. The company will continue to operate the three bulk samples simultaneously. Following this, the company intends to use the Santa Barbara tunnel to access the Mariana underground area and start mine development. The company is looking to acquire permits for the mine, which would also allow for drill operations. The company is planning a continual operation, eventually turning it into a mine. Initially, it would need to acquire an environmental license along with a mine plan approval. However, this doesn’t prevent the company from continuing aggressive drill operations. The company is raising capital to drill the first holes in Santa Barbara to prove its potential compared to Buritica.

Baroyeca Gold and Silver will carry out metallurgical testing and conduct drilling between the hole intersects. This way, it won’t need to carry out geo statistics. Filling up with some continuum and mining one vein won’t damage the deposit, but it might defer all costs of exploration, which is the main goal. This strategy can make the company stand out amongst its peers.

The company initially expected to start mining in July but faced delays due to the pending permits. Dealing with the Latin American bureaucracy and a new government can be tricky due to the potential for missteps. The company was asked to file the permit and continue operations. This led to a switch in focus towards drilling Santa Barbara.

Targets 2022 and Beyond

Baroyeca’s first priority to is secure the financing before the end of 2022. In Q1, 2023, the company will move the drill rigs to Santa Barbara, where it is looking to drill 1,500m-2,000m under the Santa Barabara vein and the Mariana mine vein. Once the permits are filed, the company expects to receive approval within 60-90 days for a 50-ton-per-day mine.

By the second quarter of next year, the company is looking to legally carry out mining and conduct exploration simultaneously so that it can produce, report, and sell the gold bars to generate a cash flow. Though the company is yet to conduct a PEA (Preliminary Economic Assessment), it anticipates that the in-house numbers will cover some of the costs. The exploration and bulk sampling will help advance the tunnel. The company is conducting metallurgical testing on different levels and is pouring gold. The cash flow generated from the gold will be reinvested into exploration, making it a zero-cost-to-profitable exploration.

At the Atocha Project, the company is awaiting the results of geological testing and is looking to generate additional targets to demonstrate the asset’s potential. Last year, the company posted really good results from target-focused drilling. It tested the Tavera Zone within the Atocha property and had highly-promising results at the surface. While drilling the veins, the company found favorable textures but the numbers turned out to be lower than expected. As a result, the company decided not to prospect with the rigs. The company moved its focus to Santa Barbara in order to generate additional targets and carry out some trenching. Once it reaches a few layers, it plans to bring the rig back and explore some possibilities on the eastern zone of the property. The company is looking to start developing this zone with trenching and mapping before going back to Atocha.

In the meantime, the company is also looking at expansion opportunities. It has been approached by two groups with large land packages. Baroyeca Gold and Silver is being offered large land packages in key positions including the middle of Mocoa along with some more advanced projects from other juniors. The juniors left years ago and since then, the land has been amalgamated. Baroyeca Gold and Silver is looking at these two opportunities to increase its land position and Columbia and potentially become the largest project generator in the country. This will be included in the results post-financing. Based on the acquisitions, the company may also announce a bigger capital raise.

The company intends to continue drilling, mining, and publishing the results on a consistent basis. Despite the changes in the government, there appears to be no slowing down in mining activities. The neighboring companies and the government are promoting copper mining. The changes in the political landscape have made metals, precious metals, base metals, and energy transition metals even better, while the coal, and oil and gas business might face challenging times ahead.

To find out more, go to the Baroyeca Gold and Silver website