The last time we checked in with Prime, they were reporting “more bonanza grades” at their 13,800-hectare flagship Los Reyes project in the mining-friendly state of Sinaloa Mexico. They were also adding a 7th rig to their 15,000-metre Phase-1 drill campaign.

Los Reyes is a district scale low sulphidation epithermal gold-silver project located in a prolific mining region of Mexico. Over $20 M in exploration, engineering and prefeasibility studies have been spent on the project over 2 1/2 decades by previous operators with development plans being held back due to declining gold prices. Historic data coupled with an existing and recently updated resource estimate has provided sufficient understanding to fast-track the project to production. However, there is substantial resource expansion upside based on open extensions of known deposits, multiple untested high priority exploration targets, and only 40% of the known structures systematically explored leaving 10 kilometres of untested strike length. Potential for significant growth of the resource remains strong.

The resource at Los Reyes currently stands at 633,000 ounces of gold and 16,604,000 ounces of silver in the Indicated category PLUS an additional 179,000 ounces gold and 6,831,000 ounces silver in the Inferred category.

This ounce count—spread across a tight cluster of eight deposits—represents one of the highest-grade (pure) oxide gold and silver resources on the planet. And notably, it’s open along strike and at depth (historic drilling was limited to a depth of 200 meters below surface).

Phase-1 Los Reyes drilling began back in December with a single rig—a program that was accelerated with multiple rigs shortly after. Since then, management has been creating significant shareholder value with the drill bit.

A run-through of recent (news) events

February 1st news – Pierre Lassonde Increases Ownership in Prime Mining Corp.

Highballer’s coverage of this Feb.1st news event – A chat with Prime Mining’s (PRYM.V) Exec VP Andrew Bowering – Pierre Lassonde increases stake in the company to 11.85%

February 25th news – Prime Mining Adds 5th Core Drill at Los Reyes

Highballer’s coverage of this news event – Gold, Bonds, and companies on our list making headlines – Pure Gold (PGM.V), Defense (DEFN.V), HighGold (HIGH.V), Cartier (ECR.V), Banyan (BYN.V), Forum (FMC.V), and Prime (PRYM.V)

March 10th news – Prime Mining Doubles Los Reyes Land Position To 13,800 Hectares

March 18th news – Prime Mining Extends Bonanza Grade Gold-Silver Mineralization 150 Metres Below Previous Drilling in Estaca Vein

Highballer’s coverage of the first assays to flow out of the Los Reyes Phase-1  drill campaign – Prime Mining (PRYM.V) encounters bonanza grade gold and silver near surface and at depth in 1st drill hole at Los Reyes Project in Sinaloa, Mexico

April 6th news – Prime Reports Results Including 8.95 gpt Au and 74.5 gpt Ag over 4.5 Metres and 1.96 gpt Au and 63.6 gpt Ag over 18.7 Metres from Ongoing Drilling at Los Reyes

Highballer’s coverage of drill results out of Zapote-South, Noche Buena, and the San Miguel East zones – Inflation, Gold, Copper – Forum (FMC.V), Defense (DEFN.V) and Prime (PRYM.V) – Part 1

May 25th news – More Bonanza Grade Gold-Silver at Los Reyes as Ongoing Drilling Expands Guadalupe East and Zapote South

Highballer’s coverage of drill results out of the Guadalupe East and Zapote South deposit areas – Forum (FMC.V) announces initial results from Janice Lake, Harfang (HAR.V) confirms kilometric-scale gold structure at Serpent Project, Prime (PRYM.V) delivers MORE bonanza grades at Los Reyes Project

Then, on June 28th, Prime Mining dropped the following headline…

Prime Mining Intercepts 4.44 gpt Gold and 1,060.1 gpt Silver over 7.5 Metres at New Discovery 1.3 Kilometres from Guadalupe East; Phase 2 Drilling Underway

This headline telegraphs a new discovery—Mina—located 1.3 kilometers northeast of the Guadalupe East deposit, the most easterly of the eight-known deposits at Los Reyes so far.

Highlights from this June 28th press release:

Mina Area Exploration Drilling

  • 4.44 gpt gold Au and 1,060.1 gpt Ag over 7.5 meters (4.8 meters estimated true width) (etw) from 142.5 meters downhole; including 3.15 meters (2.0 meters etw) at 6.62 gpt Au and 1,397.8 gpt Ag and 1.85 meters (1.2 meters etw) at 6.3 gpt Au and 1,881.0 gpt Ag (drill hole 21Mina-02);
  • 3,243 gpt Ag over 1.15 meters (0.74 meters etw) with no associated gold from 81.7 meters downhole (21Mina- 05);
  • 1.45 gpt Au and 29.3 gpt Ag over 3.7 meters (1.85 meters etw) from 91.0 meters downhole (21Mina-05);
  • 1.72 gpt Au and 29.6 gpt Ag over 3.85 meters (3.20 meters etw) from 23.7 meters downhole (21Mina-06);
  • Six holes were completed at Mina during Phase 1 drilling.

Those are some FAT silver values in drill holes 21Mina-02, 21GE-01, 21GE-03, and 21GE-07 (see tables 1 and 2).

Mina is a new mineralized zone that could ultimately set up deposit number nine at Los Reyes. This discovery is the upshot of a surface sampling campaign that targeted the Mina 20 and Mina 21 adits (rock chip sampling of adularia bearing banded quartz veins and breccias returned several mineralized intervals including 3.0 meters at 29.8 gpt Au and 1,132 gpt Ag).

“This initial drilling demonstrates the potential for substantial new mineralized zones to be defined at elevations that are near the top of the “boiling zone” and over 250 meters higher than the top of the Estaca Vein at Guadalupe East. Geological and structural relationships between the drill intersections and surface geology at the adits are still unclear with only six holes drilled.”

Mina, elevated to top-shelf status, will see aggressive follow-up drilling during the Phase-2 campaign later this year.

Drill holes 21MINA-01 and 21MINA-02 targeted an east-west structure, one of two structures identified along these adits—21MINA-02 is the deepest of the six holes completed at Mina thus far having intersected the mineralized structure at an elevation of 964 meters above sea level.

Drill hole 21MINA-03 probed the subsurface stratum below an arsenic anomaly identified during recent surface trenching—said anomaly runs obliquely along strike of the east-west structure intersected in 21MINA-02.

“21MINA-05 and 21MINA-06 tested a north-northeast structure under the Mina adits, intersecting multiple mineralized zones displaying different metal characteristics: 1) typical Au/Ag ratios and 2) bonanza grade Ag with no associated gold. The silver rich, gold barren zones have already been recognized at the San Miguel East deposit. Two holes drilled under the adits encountered low-grade mineralization in the interpreted boiling zone at a relatively high elevation in the mineralization system. 21MINA-05 did not intersect similar bonanza Au-Ag grades sampled in the adit, possibly because we are at the top of the epithermal system, where the mineralization is more irregular. Additional drilling is required to fully test and delineate this new discovery.”

2021 Los Reyes Drill Program

  • 4 drill rigs are currently active at Los Reyes, down from 7 with the onset of the rainy season;
  • The 15,000-meter Phase-1 drilling is complete;
  • A 30,000-meter Phase-2 program has begun;
  • Permitting activities are underway for Phase-2 roads and drill pads.

The Company drilled 74 core holes for 15,061 meters during Phase-1. A Phase-2 (30,000-meter) campaign has begun and will target areas that can be easily accessed during the rainy season—infill and stepout drilling along strike of the Zapote and Noche Buena deposits.

Once the rainy season draws to an end, the Company expects to have permits in hand that will grant expanded access to the eight-known deposits, as well as additional (new) structural targets like MinaOritoFresnillo, and Las Primas.

Expect to see an acceleration in the program, with additional rigs, to meet the 30k meter objective.

“Surface mapping continues and is successfully defining more nearby areas of significant interest at Los Reyes including Mariposa, El Tule, Mirodor, Altamira, Las Palmitas, Las Cantanos and others.

Relogging of historic drill core continues with 80 of 89 holes already completed. Soil sampling is completed at Guadalupe and ongoing at Las Primas.”

Final Payment made to Vista Gold Corp.

  • Final US$1.0 million (“M”) payment completes the acquisition of Los Reyes;
  • Vista no longer retains royalty or back-in rights.

Daniel Kunz, CEO:

We are extremely excited about this early-stage grassroots discovery at Mina, an area of limited historic small-scale mining we found during our regional mapping program. We still need to define the nature of mineralization, orientation and structural controls but are highly encouraged by indications of multiple phases of mineralization present at Mina including bonanza and high-grade gold-silver mineralization (comparable to the Estaca vein at Guadalupe East) and bonanza-grade, silver-only mineralization (as encountered at San Miguel East).

Our discovery hole 21Mina-02, the deepest of the six holes completed at this time, intercepted high-grade mineralization at 964 m above sea level (“asl”) which is 250m higher than the elevation of high-grade mineralization in the Estaca Vein. With continued successful drilling at Mina, we expect to delineate the ninth gold-silver deposit at Los Reyes.”

With the stock establishing some exceedingly positive price trajectory in recent weeks—the shares are trading at the top end of their yearly range—it’s very intriguing to note that Andrew Bowering and Pierre Lassonde have been actively purchasing tidy blocks of shares on the open market… at current prices.

With a potential M&A event in the offing, there’s a lot to be said for averaging up.

Los Reyes is likely being watched closely by a number of resource-hungry predators. With the current oxide ounce count (812k ozs Au and 23.4M ozs Ag) and the quality of the assays flowing out of the project in recent weeks, I suspect it’s only a matter of time before a takeover offer drops.


—Greg Nolan

Full disclosure: Highballer does not currently have a marketing relationship with Prime Mining. The author does not own shares.

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