Magna Gold Corp. (TSX-V: MGR)(OTC: MGLQF) – currently trading around US$0.80 per share – is a Canadian-based gold-silver company with a growing portfolio of exploration and production stage mineral projects in Sonora, Mexico.
Magna’s flagship asset is the producing San Francisco Gold Mine where, earlier this year, the company produced a Prefeasibility Study outlining a scenario for average annual gold production of 69,000 ounces per year at all-in sustaining costs of US$1,204 per gold.
Magna Gold is advancing an impressive suite of gold-silver projects located within the mineral-rich Sonora-Mojave Megashear Tectonic Zone, Mexico — including the flagship producing San Francisco Mine.
On 8 December, Magna announced results from its recently-completed Phase I drill program at its La Pima Silver Project — located just 24 km northwest of the flagship San Francisco Gold Mine.
Drilling highlights from La Pima include 302.73 grams per tonne silver equivalent (g/t AgEq) over 1.3 meters with mineralization occurring near-surface.
Magna Gold president & CEO, Arturo Bonillas – whom you’ll be hearing more from in a moment – commented via
“Magna is encouraged by these drill results and a second round of drilling is currently being planned to commence the 1st quarter of 2021. Magna continues to advance the San Francisco Mine to full production.”
Magna’s upcoming Phase II drill program at La Pima will test multiple intercepts from Phase I at-depth, plus additional areas of mineralization that have yet to be fully drill-tested.
Magna is also making steady progress at its drill-ready Margarita Silver Project where only about 1.5 km of 7 km of outcroppings have been drilled to-date. The company expects to release an inaugural resource estimate for Margarita in Q2 2021.
At the flagship San Francisco Gold Mine, Magna is steadily ramping up production with development occurring in both pits and in the underground mine. The project is cash flow positive and remains on pace to attain targeted gold production by March of next year.
And if that’s not enough… Magna is also advancing its neighboring San Judas, Mercedes, and Los Muertos silver projects.
Our own Gerardo Del Real of Junior Resource Monthly and Junior Resource Trader recently caught up with Magna CEO, Arturo Bonillas, for an overview of La Pima and San Francisco – plus a look at the company’s expanding portfolio of gold-silver projects in Mexico’s prolific Sierra Madre mineral belt.
Magna Gold (TSX-V: MGR)(OTC: MGLQF)
CEO, Arturo Bonillas, on Newly-Released
Drill Results from La Pima & Much More
Gerardo Del Real: his is Gerardo Del Real with Resource Stock Digest. Joining me today is the president & CEO of Magna Gold, El señor Arturo Bonillas. Arturo, buenos dias!
Arturo Bonillas: Gerardo, muy buenos dias! How are you?
Gerardo Del Real: I am excellent. Thank you so much for coming on. I'm excited to talk to you about a strategy that I don't think the market has really picked up on yet. And that is… you are quietly, but methodically putting together a very impressive silver portfolio.
We know about San Francisco; we know you're ramping up; we know it's cash flow positive, and we know 2021 is going to be a very important year. But I'm noticing the silver portfolio continues to get bolstered up. And so you just recently added the Margarita Project. I want to talk about that.
And you just announced some results from La Pima. Let me read the most recent headline: You drilled 1.3 meters of 302.73 grams per tonne silver equivalent at La Pima.
For those that are not familiar with La Pima, can you describe it for them? And then, let's talk about the results because I know the flashy number is the 302 AgEq g/t at La Pima. But there's a lot more to get into; it's near-surface and some very good widths of mineralization for a Phase I program.
Arturo Bonillas: That is correct. La Pima is a property that came with our acquisition of the San Francisco Mine. It's an early-stage silver target, high-grade, with excellent historical mine workings and outcrops. We just completed a physical survey on the property that coincided very well with the surface sampling that we had done and also the old artisanal mines.
So we put in the first phase of diamond drilling. We completed 1,719 meters in nine core holes, and we're very, very pleased with the results. We have identified basically three zones, and we are preparing for our new drill program for next year starting the year.
We will be targeting the target depths at vertical zoning from the drill holes we've produced and coincidental with our geophysics. And also we have identified, besides the silver targets, we have identified a gold-silver target that's just geophysics.
So we're very excited about it. And we are, as I said, preparing for the next stage. We will do another 2,000 meters to follow-up, and we expect to complete those in Q1 of next year. So that's exciting. And that's on La Pima.
Gerardo Del Real: And this Phase I program, before we talk about Margarita, the Phase I program totaled 1,719 meters. You just mentioned that you're going to be targeting these holes but at-depth. And I want to read some of the grades because they were very near-surface.
And I have to believe if you're targeting them at-depth, it's because you believe you're going to get an increase in grades, and potentially widths, correct?
Arturo Bonillas: That is correct. Yes. Remember, La Pima is an exploration property and it's early-stage. So we’re being very careful in how we drill and follow up. But we will do deeper holes to test all of these surface outcrops at-depth. And, as I mentioned, other zones that were identified.
Gerardo Del Real: Excellent. Excellent. So let me read off some of the results that you're looking to increase at-depth:
Hole 3 had 22.5 meters of 21.4 (g/t) silver equivalent;
Hole 5 had 14.65 meters of 93.38 (g/t) silver equivalent; I could continue on…
Hole 6 had 3 meters of 134 (g/t) silver equivalent… all of this from 37 meters, 39 meters, 60 meters. So very shallow.
The fact that you believe that the grades and the widths can increase at-depth is exciting given the early-stage nature of what looks like a very high-grade silver target.
Arturo Bonillas: That is correct. Yes. You know, the surface thickness can go from 40 to 60 meters in some areas. And we know there’s mineralization at 70 meters in depth. So we are very encouraged by what we’ve completed there.
AgEq g/t grade calculation using $20/oz Ag, $0.92/lb Pb, and $1.01/lb Zn.
One troy ounce (to) is equal to 31.1035 grams (g) and one Tonne is equal to 2,204.62 lbs.
Intervals are not true thickness.
Gerardo Del Real: Excellent. Let's talk Margarita. You closed the acquisition of the Margarita Silver Project in Chihuahua, Mexico. This is a project that has seen a lot of drilling. It is located within a very, very prolific gold belt, the Sierra Madre gold belt, which obviously hosts numerous multi-million ounce gold and silver deposits. Can you tell me about Margarita?
Arturo Bonillas: Of course. It’s in a very, very good neighborhood. Again, the property, we've had 7 kilometers of outcroppings in multiple veins, and only one vein has been drilled with excellent results. Sable Resources, the company we acquired it from, put 35 diamond drill holes in and with interesting, very interesting widths.
I'm talking an initial calculation here from averages; 230 grams silver equivalent over 17 meters. And that includes a core within the same holes of close to 500 grams (475 grams per tonne) between 3 and 4 meter widths. The property is basically drill-ready. We will go back there, and the idea here is to have an inaugural resource estimate by Q2 of next year.
And we are… I'm very positive that we can produce a very interesting PEA-level study there which will increase company value. We're surrounded actually by a company called Sunshine Silver, which I think recently changed their name to Los Gatos Mine, that’s spent a lot of money in the same trend and very similar geology (though we’re at a higher elevation), and the mineralization is wide open.
And, as I mentioned, that’s 7 kilometers of outcroppings/veins… the company only drilled 1.5 kilometers of those. I think that Margarita will move fast. It becomes the number one priority on our silver portfolio.
Gerardo Del Real: Arturo, you have a lot of priorities. You're also ramping up San Francisco. Gold is right near the $1,850 level. You're very cash flow positive. And, of course, the best is yet to come. How is the ramp-up coming along at San Francisco?
Arturo Bonillas: Going very well. We’ve had better than expected… and the underground mine, which is new to the company, is already sending gold to the leach pad.
Magna Gold’s 117,000-acre San Francisco Gold Mine Project with infrastructure in place and a newly-released Prefeasibility Study envisioning average production of 69,000 ounces of gold per year over ~8 years at all-in sustaining cash costs of US$1,204 per gold ounce.
We are in development in both pits and the underground mine, and we shall reach stable production of ore from the pits and the underground mines by March of next year, which is according to what was planned in our technical report that we published in August/September of this year. We're on-target on everything that we’ve set out to do.
Gerardo Del Real: Excellent. Arturo, I’ve got to ask about one last project. I know… well, three more projects! Again, the portfolio is growing rapidly, right? You have San Judas; you have Mercedes. I know there's work being done there. But back in August, you very quietly entered into an agreement to acquire the Los Muertos Silver Project in Sonora, Mexico. How did that play out?
Arturo Bonillas: All 3,000 very well (laughs!). Los Muertos, it's a property that was worked on by a Canadian junior company about 10 years ago. And we acquired it from the mine owner, the concession owner, after the property came back to him. The property was and is drill-ready with very clear targets based on geological and geophysical work. So that paid off very well.
And we've acquired another one that we haven't announced yet. We are closing on that deal. It's named Cuproro. We might change the name but it's also silver and in a good area and good district.
So in total… I can say that we have 5 silver targets; 3 acquired plus La Pima and plus another silver target within our Mercedes District in the Sierra Madre gold belt. That looks pretty good. And in San Judas, we are going to have a drill project also early in the year.
Gerardo Del Real: Arturo, you could say that you have 5 silver projects… I could say you have another silver-company-to-go with San Francisco. We'll see how that plays out in 2021.
You obviously are very cash flow positive. There's obviously an abundance of projects and targets. It's impressive what you've been able to do in such a short amount of time. Is there anything else that you'd like to add, Arturo?
Arturo Bonillas: No, nothing. We will assess, very well, what's best for shareholders and the company in terms of the silver portfolio of properties. And, you know, we may do a standalone silver company but that's something that has to be determined. I don't know yet. We're more concerned now about working on putting the fundamentals together in the properties and that we are on-target on all of our targets.
Gerardo Del Real: Excellent. Well, congratulations, Arturo. Again, impressive work. I'm a happy shareholder. And I think the company presents an excellent speculation given the cash flow… given where gold and silver is... and, frankly, given the potential for a standalone silver company, or just a portfolio of silver companies.
That is extremely exciting and provides a lot of exploration upside anchored by the San Francisco Mine. Good work!
Arturo Bonillas: Well, thank you very much, Gerardo. It was nice talking to you again. And remember, I'm here to update you as often as possible.
Gerardo Del Real: I appreciate it. Thank you so much, Arturo. You stay safe out there.
Arturo Bonillas: Stay safe. Goodbye.
Mike Fagan has mining in his blood. As a teenager he staked countless gold and silver properties in Nevada alongside his dad, Brian Fagan, who created the Prospect Generator model that’s still widely used today in the resource space. One of those staking projects was put into production by a major Canadian mining company — a truly rare and profitable experience. That background uniquely qualifies him as a mining stock speculator. One of the most well-known names in the business, Mike is now putting that experience to use for the benefit of Resource Stock Digest and Hard Asset Digest readers.