I interviewed Eloro (ELO.T) CEO Tom Larsen for motherlodetv.net a couple of weeks ago. We talked, more or less exclusively, about how the “tin domain” at Eloro’s Iska Iska Project in Bolivia was coming into sharper focus. Tin is a huge bonus on what, to date, has been primarily viewed as silver/zinc deposit.
Two days ago ELO put out a release about an extraordinary drill hole which included “962.23 g Ag/t over 9.75m”. That is nearly a kilo of silver per ton over a length taller than a two story house. Rock worth over $1000 USD per ton.
This bonanza grade was “within a wider zone of 34.50m grading 440.09 g Ag/t which is the highest grade Ag intersection obtained thus far in drilling at Iska Iska”.
When I see a press release like this from a company I already hold shares in and have followed closely for years I try to put it in context to gauge its overall importance. Does it change the game?
Well, the market certainly liked the news, taking the share price from $0.90 to $1.10 in two trading days. Which, in turn, makes a private placement to finance more drilling a much more attractive proposition at, say, $0.90.
What about the release itself? First off, the drill hole is within the boundaries of what ELO refers to as its starter pit. It is an infill definition hole which is important because it will tend to improve the grades which will be included in the company’s Preliminary Economic Assessment expected towards the end of the year.
When geologists estimate the mineral resource contained within a pit shell they assume that the mineralization indicated by one hole is surrounded by largely barren rock. Drill another hole 100 meters away and it is assumed that the mineralization encountered raises the average mineralization in the two hole system by some factor. Drill a third hole between the two original holes and the mineralization found in that hole will boost the average overall mineralization of the now three hole system by some larger factor.
The drill hole reported today will bump the overall silver values in the proposed starter pit when it comes time to build the model for the PEA. As the release put it,
As definition drilling has expanded to cover more areas in the Santa Barbara area, the density of high grade silver values greater than 50 g Ag/t has increased significantly, demonstrating the importance of tighter spaced drilling to obtain a more accurate estimate of grade.
Second, the grade and interval are amazing even within the context of the many high grade, long interval holes Eloro has drilled at Iska Iska. At a different project this sort of hole would “make the project”. At Iska Iska it is somewhat routine. A consistency which makes any single hole, no matter what the grade and interval no big surprise.
So game changing? Hitting higher grades in longer intervals is actually just what is expected in a richly mineralized area like Iska Iska. It is further confirmation that Eloro has a world class silver deposit adjacent to a world class tin deposit.
What this long interval high grade hole does do, as Tom Larsen points out in the release,
These results continue to dispel any previous misinterpretation that there are extensive areas of waste in the overall mineralized zone. The continual higher-grades that are being reported in the silver-tin polymetallic system from this latest drilling campaign are only adding to the overall economic potential of the deposit.
Larsen and his team were knocked back when their initial Mineral Resource Estimate was forced to assume that the Iska Iska system contained large barren areas. The geos were pretty certain that was not the case but the drilling to date was too widely spaced to make that case. The share price fell hard and has not recovered.
Continuing to report bonanza silver holes and long runs of metalurgically “easy” tin will, I expect, turn that story around. And, at a guess, the strategics, the big guys, are loading the numbers into their models and getting closer to pulling the trigger. Over at motherlodetv.net I quote Larsen,
“We are receiving more interest from potential strategics since the release of latest drill results in the newly discovered Tin domain and are in the NDA process stage with a couple of well recognized names,”
Which would, of course, be an actual game changer.
(Disclaimer: I hold shares in Eloro. I may buy or sell at any time. This is not investment advice. Do your own due diligence. Call the CEO.)
