Eloro Resources (ELO) - Big Target Hard to Miss & Resource Soon

Eloro Resources Ltd. is a Canadian exploration and development company. It is focused on the development of a portfolio of gold and base metal properties in Quebec, Peru, and Bolivia. The company has the option to acquire a 99% interest in the high prospect Iska Iska Property located north of Tupiza city. It also owns an 82% interest in the La Victoria Gold-Silver Project located in Peru’s north-central mineral belt. The company’s Quebec assets include the Lac Henri property, Eastmain property, Lemoyne North property, and Delta property. 

Matt Gordon caught up with Thomas Larson, CEO, and Dr. Bill Pearson, Executive Vice President of Exploration, Eloro Resources. 

Mr. Larsen is an executive in the resources sector with over 40 years of experience in the investment industry, specialising in corporate finance and management of junior resource companies, raising in excess of $200M. He currently serves as the CEO at Eloro Resources Ltd. and Cartier Iron Corporation. He previously held the position of President and CEO at Champion Iron Limited, an appointment he assumed on the completion of the merger of the Australian-based Mamba Minerals Ltd, and TSX-listed Champion Iron Mines Limited to continue as Champion Iron Limited, effective April 1, 2014. Prior to the merger, he was President and CEO of Champion Iron Mines Limited, now a wholly-owned subsidiary of Champion Iron Limited. 

Dr. Pearson is a noted leader in geosciences. He has over 40 years of direct experience in the exploration and production of minerals worldwide. He has played an integral role in creating value that led to successful acquisitions of Desert Sun Mining Corp by Yamana Gold in 2006 and Central Sun Mining by B2 Gold in 2009. He is the Creator and Founder of the Association of Professional Geoscientists from Ontario. 

Company Overview

Eloro Resources Ltd. is an exploration and mine development company with a portfolio of gold and base metal properties in Bolivia, Peru, and Quebec. The company was founded in 1975 and is headquartered in Toronto, Canada. Minera Tupiza S.R.L, 6949541 Canada Inc, and Compania Minera Eloro Peru SAC are the company’s subsidiaries. The company is listed on the Toronto Stock Exchange (TSX-V: ELO), and the OTC Markets (OTCQX: ELRRF).

Eloro Resources had a sizable price appreciation in its share price over the past few weeks. It was trading in the range from CAD$3.50 to CAD$4 a share for at least 7-8 months. Following this, the company had some promising results at the Iska Iska Polymetallic Project. The company is highly pleased with the development and progress of this asset. The latest drill hole is one of the largest to date, featuring 370m-375m of at least 170g silver equivalent. The company believes that the hole is still open. 

This drill hole has led to the identification of a tin porphyry area. At the same time, the price of tin has grown favourably to $45,000t-$46,000t, which comes out to $21/lb-$21.50/lb. In some of the drilling zones, the company found grades over 0.4-0.5, which is equivalent to 8lb-10lb tin. It is the cassiterite at depth that translates to a $160-$200 rock per ton evaluation. 

Meanwhile, in the upper zone, the company is working on the inaugural MRE (Mineral Resource Estimation) for the Santa Barbara area which is expected in Q2 2022. 

Cash Position

Eloro Resources has been structured from a share cap scenario since the very beginning, and the company has been highly conscientious of the share count. It is currently at 63M outstanding shares. It has successfully raised over $30M. As a result, the company is well-financed, with zero debt. Currently, the company has in excess of CAD$10M in cash flow along with a very strong shareholder roster. The company anticipates that a lot of the legacy shareholders sold their positions at much lower prices, which led to the $3.40-$4 share price movement for an 8-9 month period. 

The Iska Iska Polymetallic Project

Eloro Resources previously faced delays with assay results due to the ongoing pandemic. However, situations have improved since then, as the company is now working with the ALS lab in Galway. This has allowed for an increase in the news flow. There is a possibility of a second tin-based MRE that could be released by the company.

The upper area is named domain 1 by the company, while the area with tin potential is named domain 2, which is located deeper down. The sheer size potential of the system is now being understood. This has led to people realising that the company is massively undervalued. 

Notably, the company carried out a scanner and IP survey on the project to establish the material grades and gain an insight into the scale of the opportunity. The survey results have allowed the company to pursue aggressive drilling. It has initiated the drilling of deeper targets underneath the upper edifice of the Iska Iska project. The company is adding a third surface drill, bringing the total rig count to 4. This comprises 1 underground drill and 3 surface drills. The company is advancing the project aggressively. 

The company’s strategy is to build out the initial MRE while continuing to explore bigger targets and bigger tonnage to prove up stronger share cap valuation as it moves upwards. The second MRE is expected around Q2 2022. However, the company anticipates a delay in the second MRE as it is focused on the latest hole. This drill hole is deepening the Santa Barbara area that hosts tin. The company is looking to stick with this magnetic target with the initial parameters that were highlighted in the presentation. 

Eloro Resources resumed its drill campaign in January and since then, it has successfully drilled 4,500m. Leduc drilling has allowed for accelerated drilling, leading to an increase in the news flow. The delay in the second MRE may happen due to the delay in old assay results for the initial MRE. Notably, the second MRE will target the initial upper-level Santa Barbara area. 

Key Findings

The Iska Iska Polymetallic Project is based in the massive Caldera complex. The company’s exploration philosophy has been to focus on understanding the system. As it gets a better insight into the mineralizing system, targeting holes becomes a more efficient process. 

15-16 months back, the company started initial drilling at the Huayra Kasa Portal. It carried out surface drilling here along with underground and step-out drilling at Santa Barbara. In the beginning, a few intersections were found. The company found new intersections through additional geophysical work and geophysical modelling. This led to a better understanding of the enormous scale of the system along with the distribution of metals. 

Notably, the Proco area has a volcanic edifice, where the system goes for 4km along strike length which is 2km in width. The company anticipates that this system extends more than 1km at depth. The remarkable feature of the Iska Iska project is that the entire volcanic system is preserved. The system features huge breccia pipes, massive expulsion features that haven’t been identified anywhere else in Bolivia. While this is a unique characteristic of Iska Iska, it does share a lot of commonality in the metal distribution with its well-known neighbours in Southern Bolivia. 

Underlying Geology

The main Caldera area features secondary regions in the southeast and the northwest. The company currently has good drill coverage for the initial mineral resource estimate. It is starting to get significantly more assays from the drill program. This includes the big Santa Barbara breccia pipe which is 800m by 500m in size, along with the Central zone which is a tin-silver target, and the Porco area which is a high-prospect target. Although the company has been focused on the mineral resource area, the recent results from DSBU-03 indicate that some of the other holes can be brought under the Proco area. 

It is important to note that Iska Iska’s system is on a very large scale. Definition drilling is being done in a 1,400m by 500m target area which is 600m deep. The entire system is well-mineralized and massive in size. 

The company’s magnetic inverse model includes the longitudinal section that goes through the definition drilling area through Porco in the south. The area also features oxide sulphide presence where everything is leached. The deposit was never discovered during the historic drilling because it wouldn’t have been found through surface sampling. The area here is a bulk tonnage system. 

A magnetic survey indicates a giant tongue-like structure that is present in a tin porphyry. The company anticipates that there is a potential tin porphyry at DSP-3 which drives the whole system. The system continues to improve as more exploration is done. There’s a large anomaly in the Porco area which wasn’t hit before as most of the drilling was too shallow. 

The Central zone features tin-silver, while the Santa Barbara is the top of the system, featuring silver, zinc, lead, and tin. Deeper drilling demonstrates the absence of zinc and lead. While the deposit features limited silver at depth, the presence of tin becomes more common in the Porco area. Similar to Porco Adit, the depth of the Porco area also contains gold and copper mixed in with silver and tin. 

At the Porco Adit area, the company sampled exceptional grades of 0.66g tin over 100m. One of the vein samples is 1 foot long and is estimated to weigh 30kg. The basement here is Ordovician port sandstone, which is non-magnetic. The company believes this zone led to the development of the Iska Iska complex. 

During the initial drilling, the company will concentrate on the top zone, which would be included in the mineral resource. As the company moves down into the system, its magnetic inversion model and geological model are being validated. There is a massive tin porphyry here which drives the whole system. 

The company initially started with radio drilling and moved to sectional drilling later. It has carried out a number of 100m spaced sections throughout the whole area, providing a better idea of the continuity in mineralization. 

Eloro Resources has also conducted extensive downhole IP (Induced Polarisation). This provides a very strong changeability effect when sulphides are present. In fact, the company has carried out 2 types of downhole IP. It is carrying out actual measurements down the hole which allows insight into 25m-50m of the hole. The company is also conducting cross-hole measurements to understand the distribution across the hole. The IP demonstrates a single, giant continuous body in terms of electrical property. Despite the variability between the holes, the system has remarkably continued mineralization. 

ESBU-03 is another signature hole that was placed 1 year after the company drilled its first big hole, EHK15. EHK15 was drilled off the west end of the Huayra Kasa Southwest where the company had one big hit with 257m of 129g silver equivalent grades. Adjusting to current prices, this comes out to 171g, leading to a significant increase in value. 

ESBU-03 was drilled a year later and it led the company to discover the massive potential of the Santa Barbara breccia. This drill hole demonstrates that the deposit has a lot more to it than just the frothy top of the magnetic model. 

The deposit features 4 major metals, namely silver, tin, zinc, and lead. It also consists of gold in some areas along with bismuth, cadmium, and copper. A detailed distribution of metals along with tall intercepts is available on the company’s website. 

Deeper holes such as the DSBU-03 carry significant tin content. It is the company’s biggest intersection so far and given the enormous tin prices, offers significant value. Although there is lead and zinc present in the upper part of the hole, it is largely dominated by tin. 

DHK-15, the company’s discovery hole has less tin content. Here, zinc is more dominant. The DSB-07 hole or Santa Barbara has a significant silver presence. There’s a bit of zonation in this region, however, the big picture indicates a silver-zinc-lead-tin polymetallic system. Going deeper into the system, tin is the major metal along with some silver. Here, lead and zinc are absent at depth. 

A highlight of the ESBU-03 is that it features tin porphyry. Drilling has provided evidence that the magnetic model is a very accurate predictor of the majority of tin mineralization. 

The distribution of the metals here indicates that this is actually 2 projects in 1. The company is finishing off the drill operations at Santa Barbara, which has been the major area of focus and is currently awaiting assay results. Following this, the company will shift its focus on defining the tin opportunity. 

Notably, the company has put out some good numbers on the DSBU-01 which was drilled in the east. The grades here are greater than 110. However, the company anticipates that the grades here are much higher as it’s a very high-grade area.

At Porco Adit, the company has carried out channel sampling, the results of which are expected to be released in fall. The Porco Adit is 200m south of the drill operations. It is present in sediments adjacent to the system. This area features incredible mineralization. 

The underground picture from November 2021 shows a massive sulphide presence. The stockwork demonstrates a lot of copper grades that were acquired by way of channel sampling. Here, the metal distribution was found to be 117g silver, 1.44g gold, 0.54g copper, 0.66g tin, and 520g silver. 

From a geological point of view, going towards the south end of Porco leads to a massive mineralized system that is barely tested. The inverse magnetic model of DSBU-03 was calculated from the surface area by way of a complicated mathematical process. It enabled the company to create a model that is the best fit. The company anticipates that this led to the generation of the magnetic pattern which was observed on surface. 

Interestingly, in the southeast, only one of the Proco radio holes, the DPC-01 clipped the edge of the model. This is where the best values were found. At the ESBU-03 hole, the company started exploration from the northern tip. This led to the identification of big intersections featuring the high-grade portion of the deposit. Notably, the area showed up as magnetic due to the presence of pyrrhotite. This is a high sulphur environment. The upper part of Santa Barbara carries tin and silver, lead and zinc which are associated with pyrite and is non-magnetic in nature. 

The Santa Barbara deposit features massive tin content along with some silver at depth. Here, the sulphide changes to pyrrhotite. Zinc and lead are absent at depth. High-grade tin mineralization is associated with pyrrhotite. The remarkable characteristic of ESBU-03 is that it features the highest tin grades at 4.1%. The sample next to this hole featured 3.05% tin. The company planned the drill hole to cut through the magnetic model which led to the exact values as anticipated. The best grades are found in DPC-03 where the model is clipped. This gives the company a lot of confidence in its model and serves as a strong predictor for tin mineralization.

Currently, the company has drilled a hole that is collared downhill from its radio drill platform. This hole is planned to go through the middle. The company is looking to drill additional step-out holes. This will allow the validation of the model, which in turn, will help demonstrate the true tin potential of the deposit. 

This is an amazing volcanic edifice that is located 1km from the valley to the peak. So even though the drilling is deeper, it still remains above the valley. From a future mining perspective, the company expects to come in from an adit on the side of the hill and conduct underground operations. Iska Iska is essentially 2 deposits, one of them is a silver-tin polymetallic in Santa Barabara which will help the company produce a significant mineral resource. The company is currently conducting metallurgical testing along with modelling of the downhole IP. The company is using every tool in its arsenal to better understand the nature and distribution of the deposit. It has plans to deploy a scanner on the property by the end of March. 

Resource Definition

Eloro Resources is currently working on calibrating the EIA (Environmental Impact Assessment) as it will be extremely helpful in mapping out the mineral and metal assemblages, which in turn, will strengthen the resource model. Notably, the scanner is planned for operation in Bolivia indefinitely. This scanner is planned to run 24-hours a day. The company’s goal is to scatter earth. Since scaling technology has evolved massively over the last 4-5 years, it will help bring the concept model into reality. The company is carrying out a lot of analytical work through a procedure called synchrotron. It is also conducting very high-end mineralogical studies at STS. 

The company intends to feed all the information into an artificial intelligence system which will help in the mapping of the metal distribution. This would enable the company to conduct conventional logging, leading to the development of a good base. This is expected to start running by the end of March. Meanwhile, the metallurgical testing is underway with Blue Coast Research.

Notably, the metallurgical distribution will help the company with the development of a NI (National Instrument) 43-101 compliant mineral resource. Here, the company needs to demonstrate the recovery potential of the metals. The company is largely looking at an inferred resource as the current drilling is relatively wide-spaced. The metallurgical distribution will help define the project’s economic potential by way of metal recovery parameters. The project has demonstrated geological continuity. 

The NI-43-101 was changed in 2019. The changes made it mandatory for a project to have an inferred resource that can be reasonably expected to be updated to the indicated category with further drilling. 

The metallurgical test included samples from multiple drill holes including hole 15 with the mineralized breccia, DHK-18 which is in the mineralized envelope, and DSB-06, which is a deep hole from the radio drilling platform at Santa Barbara. The DSB-06 hole was drilled at -80 to the south. It had an intersection featuring 4.43% tin over 73m. This intersection was originally deemed to be leftfield. However, after drilling DSBU-03, it is evident that the hole is on the northern tip of the massive tin zone. 

The metallurgical testing at Blue Coast will provide a good indication of tin presence as the mineralization here is fairly similar. The company also drilled 2 metallurgical holes. The second met hole featured very good continuous mineralization over 303m. The company is confident that the samples will provide a better insight into the metallurgy. The drill hole assay results are now coming back with shorter turnaround times. 

As of now, Eloro Resources has 13,000m outstanding assays. The company drilled a total of 15,000m by the end of 2021. Since then, It conducted 5,000m additional drilling. The last 2 releases have been on 5-6 holes except for the DSBU-03.

Micon International is going over the company’s model to help figure out an interpolation strategy. This will also help the company identify additional areas which need holes to be drilled. The extra rig has provided the flexibility to drill additional holes. Since this is an enormous target, the company will use its internal model to figure out where to drill the extra holes. Although the company has good coverage, especially in the eastern part of the Santa Barbara pipe. 

The company currently has CAD$11M in cash flow. The monthly burn rate has been a consistent $1M. The additional drill rig will ramp up the expenditure by a small margin. 

Geophysics have indicated that the deposit features excellent electrical continuity. Upon looking at the resistivity, it is evident that there is a massive presence of sulphides, as these offer virtually no resistivity. 

It is important to note that all the 80 holes drilled into the system so far have shown multiple, reportable intersections. The company has found a lot of 20m, 30m, 40m, and 70m intersections. 

The company is looking to attain the proof of concept for the ESBU-03 hole. It has plans to validate the magnetic model which will help map out the potential tin porphyry. 

Eloro Resources has acquired around 8-9 additional properties. It has plans to commence geophysics on these properties. About 1.5-2 years back, the company conducted an ASTA survey which led to the identification of highly-interesting signatures. The company continues to have a major focus on Iska Iska. It expects to release new information on the project on a bi-weekly basis. 

To find out more, go to the Eloro Resources website