Silver North Resources Ltd. press release
Unlocking Treasure Mountain: Huldra Silver takes an unconventional route to mining and exploration
TSXV - TSX Venture Exchange · Silver · Gold · Lead · Zinc · Copper · Canada
We’re about three and a half hours north of Vancouver, bouncing up a rough mountain road in a four-wheel-drive. The objective? To check out what Ryan Sharp calls “a grassroots exploration company with a producing mine. Or the other way around—a mining company with blue sky exploration potential.” He wants people to see for themselves Huldra Silver’s[V.HDA] Treasure Mountain and Thule projects because, he says, “We’re not a paper company.” In particular, the nearly 3,000-hectare Treasure Mountain silver-lead-zinc operation hasn’t been divulged on paper nearly to the same extent as most working mines.
“Other mines have gone into production without a feasibility study,” he points out. “Others have done it without a PEA. But very few have gone into production without a resource estimate.”
Well, there was a resource back in 2009. But Sharp maintains it was based on limited data. After investigating the company and its assets, he became convinced of far greater potential. That was in March 2010, when he was invited to join the company as president/CEO/director. Two months later he visited Treasure Mountain for the first time, driving up the logging road without a map. “I got all the way to the mine property without seeing another vehicle, and got out. I started walking through the snow, came across grizzly tracks and ran back to the vehicle. I found my way back to the Coquihalla Highway even though I’d never been up here before, and went home that night.”
But he returned, spending months at a time living in a trailer furnished with an air mattress. “I hiked the hills, I studied the rocks. I was the first person in 40 years to question the geology.” And to complement the geology was some infrastructure—a four-level underground mine built by Huldra in the late 1980s but never put into operation.
He sunk “pretty much 100% of my savings in it” and enticed investors to the site, including Coeur d’Alene[T.CDM], which currently holds about 10% of Huldra. Financing continued with, most recently, $10 million in convertible debentures that closed last February.
To get the mine up and running Sharp hired manager Al Beaton, whose worldwide experience includes a past stint with Huldra during Treasure Mountain’s 1980s development stage. Experienced workers signed up, attracted in part by one of the best locations and climates Canadian miners could hope for. Sharp attributes considerable cost savings to using his own staff, instead of contract mining.
Sharp’s background, on the other hand, might be atypical. But he says, “I have the background for what mining CEOs are going to become.” In addition to seven years as a broker, he headed an environmental construction/remediation firm. “It’s similar to mining in that it’s labour-intensive and equipment-intensive, with lots of permitting and red tape.” His geology is self-taught. Nevertheless the University of British Columbia took him on as an advisor and marker on an honours thesis about Treasure Mountain geology. “I’ve seen more rocks up there than anybody other than Magnus,” he says, referring to Magnus Bratlien, a prospector and Huldra director.
For all that, Sharp insists he’s “the world’s lowest-paid mining CEO.”
Treasure Mountain mining began in November 2011, with commercial production achieved last March. Now Huldra typically sends three trucks hauling 42 tonnes of ore twice a day each to its mill outside Merritt, an hour and 20 minutes away. April totals show 233 tonnes of lead-silver concentrate and 199 tonnes of zinc-silver concentrate went to the smelter, a 42% and 18% increase respectively over the previous month.
With Treasure Mountain classified as a small mine under B.C. regulations, Huldra is permitted for 60,000 tonnes a year. An environmental assessment application has already been drafted for an expansion permit, pending an updated resource and proven record of responsible mining.
Sharp bases his expansion optimism on underground drilling that’s continually increasing Huldra’s understanding of the deposit far beyond the 2009 resource. While mining continues on Level 1, uphole drilling from Level 2 continues in a program of at least 54 holes totalling up to 5,200 metres, which will include some delineation between Levels 2 and 3. A new resource is slated for Q3 release.
But Sharp has other plans as well. On a visit to what he calls “the world’s greenest mill,” he shows guests around the surrounding 8,500-hectare Thule copper-iron property just outside the town of Merritt. The mill itself, owned 100% by Huldra, features simple crushing/grinding and flotation circuits that produce a lead concentrate, in which most of Treasure Mountain’s silver is contained, and a separate zinc concentrate, which holds about 5% of the silver.
What makes the mill so green? It uses runoff from a former on-site underground mine, then keeps re-using the same water in a closed system. Only a small amount is discharged into a lined tailings pond.
The mine was the Craigmont, which extracted copper-iron from 1961 to 1982 and iron-magnetite from 1982 to 1997, then re-worked magnetite tailings up to last year. It’s now called the Thule property by Huldra, whose acquisition agreement requires the company to spin the project to a new outfit to be held 49.9% by shareholders of the former Craigmont Holdings and 51.1% by Huldra, subject to dilution on financing. Sharp thinks the mine has more to give. An NI 43-101 technical report released May 8 suggests spending $2.3 million on a program including geophysics, underground sampling, 5,000 metres of drilling and 2,000 metres of drift rehab. The property also includes three inactive gravel pits.
So looking one year ahead, Sharp hopes to see the Thule spinout in fruition. Five years from now, he’d like to see Huldra “a mid-tier producer focused on B.C.” Will he make it? As he surveys Huldra’s plant from a hill overlooking the Thule property, he says, “Two and a half years ago I was the only employee in the company. Now we’re up to 110 employees.”
Adjacent to Treasure Mountain’s north lies property held by Canadian International Minerals[V.CIN]. President/CEO Michael Schuss wonders if the area’s potential could eventually compare with a Beaverdell-type deposit, around which grew the south-central B.C. camp. The Beaverdell silver-lead-zinc mine operated almost continuously from 1913 to 1991.
“I think the Huldra story is really interesting on its own and the exploration potential in the area is quite good,” Schuss says. “Without a doubt the ground we have has excellent potential.”
Contiguous to Treasure Mountain’s south, Nomad Ventures[V.NMD] holds the 946-hectare Tulameen Mountain property under option from Silver Fields Resources[V.SF].
Adjacent to Treasure Mountain’s west, another 900 hectares has been picked up by Silver Stallion Resources, a private company with intentions of going public. John Curle says his company plans a summer of field work with possible drilling to follow in early autumn.
The property has benefited directly from its neighbour’s work. “When Huldra did their geomagnetic survey, they over-flew our ground and found a very strong mag high right on our property beside them,” Curle says. “And they did some soil sampling in our area by mistake so they owe us some information there. But the magnetometer survey indicates there’s a major mineralized zone right smack dab in the middle of our property. So that’ll give us a good starting point.”