Grenville Gold's Suitors Are Lining Up To Dance
By James West
http://www.devilsadvocatere****t.com
Grenville Gold Corp. (TSX.V:GVG) looks poised to get gobbled up by any
number of suitors, if the recent flurry of press releases are any
indication.
And judging by the companies doing the courting, it would appear that some
know more than others, in terms of where the real value may lay in this
dynamic little company. It appears that the companies lining up to kick
the
tires are all well established in Peru.
The focus of all the attention, or most of it, is a group of 4 mines the
company acquired recently on a little shopping spree. The four mines were
owned and operated independently of one another by four different
companies.
All four mines are part of the same vein system, which produced some
bonanza
grades of silver, lead, zinc and gold. They are the Germania, Pacococha,
Millotingo and Silveria mines, which Grenville has collectively named the
Silveria Project.
The Silveria Project mining operation is part of the Viso-Aruri mining
district located in the
San Mateo District, Department of Lima, Province of Huarochiri, in the
central Andes of
Peru.
Published documentation on historical production, reserves, reserve ore
grades and estimated mine life at December 1990 on the Millotingo and
Pacococha Mine pegs the minimum historic production from these two of the
four mines at 18 million ouncers of silver, 88 million pounds of copper,
and 96.8 million pounds of zinc. Grenville believes a potential target
grade
of 113.4 grams (4 ozs) per ton silver, 1% copper, and 2.5% zinc is
attainable over a potential target tonnage of between 10 and 25 million
tons
of ore grade material.
But there is even easier, lower hanging fruit to be plucked from the
Millotingo mine site.
The Millotingo tailings dam was recently sampled, and Initial estimates of
tailing grades reveal between 85 grams (3 ozs) and 567 grams (20 ozs) per
metric ton of silver, and between 1 and 3 grams per metric ton of gold.
So who's sniffing around?
On May 23, Grenville announced in a press release that Compania Minera
Ares
S.A.C., a subsidiary of the Hochschild Mining PLC, was reviewing historic
data and conducting a site visit at the Silveria Mine.
Hochschild Mining PLC (LSE: HOC.L) is headquartered in Peru, listed on the
London Stock Exchange, and is a leading precious metals company with a
primary focus on the exploration, mining, processing and sale of silver
and
gold. Hochschild is focused on the development of its high-grade reserve
base and has a proven track record of consistent reserve replacement,
sustaining the reserve and resource base.
On April 18th, in another press release, the company announced that
"Solway
Andes SAC, a subsidiary of the Solway Group (www.solwaygroup.com) plan to
send three senior geologists to Peru for one month to conduct a site visit
at the Silveria Project, review data from various Grenville projects and
meet with Grenville project consultants, managers and geologists in order
to
complete its due diligence."
Solway Andes S.A.C. is a South American subsidiary of Solway Management
which is a sole and
exclusive asset management company of Solway Investment Fund, a private
equity investment
fund specializing in worldwide strategic investments. Solway Investment
Fund
is owned by a
small group of experienced international investors and employs over 8 ,000
people worldwide. Solway's total assets exceed US$900 Million.
Now obviously large mining groups pouring over data and poking around in
the
old mine is no assurance that any kind of a deal is imminent, but it
certainly is a positive indication.
Another plus is the fact that Goldhawk Resources Inc (TSX.V:CGK) in 2006
paid US$12 Million for their Tamboraque project, which is 2 km from the
Silveria project, and part of the same mineralized system as those within
Grenville's project.
According to Goldhawk's 43-101 pre-feasibility re****t filed in April of
this
year (Note that Goldhawk has renamed the project from "Tamboraque" to
"Coricancha"):
"The mineralization of the Coricancha operation consists of
low-sulfidation,
narrow veins containing gold, silver, lead, zinc, and copper that filled
the
main fractures of the system (Constancia and Wellington Veins) as well as
other tension-type veins such as the Rocío,
Colquipallana, and Animas.
CMSJ's estimate of mineral reserves indicates that the combined total of
the
Constancia
and Wellington Veins contain 436,500 tonnes of proven and probable
material
averaging
5.09 grams per tonne of Gold, 161.29 grams per tonne of Silver, 2.72%
Lead,
2.52% Zinc, and 0.31% Copper. It is Gustavson's opinion that the CMSJ
estimated reserves meet the current Canadian Institute of Mining (CIM)
guidelines and requirements."
If Silveria's grades turn out to be comparable to Goldhawk's, there could
be
a monster of a mine there. Bear in mind that all of the mining and
exploration to date have focused on development in the mountain rising
above
the valley floor, and no exploration has been conducted below the valley
level. All of these fluids are typically forced upward, so the best place
to
look for more mineralization is below that which has already been
discovered.
Grenville presently has a great deal of work underway at Silveria.
Knight Piésold has re****ted approximately 50% completion of its
environmental scoping study project. Knight Piesold has completed its mine
sight inspection, has examined waste rock dumps, and tailings dams, and is
in the process of making numerous recommendations regarding the location
of
a new tailings facility, location of a new waste rock dump, and opinions
on
the reprocessing of existing tailings dams. The 3D modeling program of the
Pacococha veins is near completion and will be followed by 3D modeling of
the Millotingo vein system.
Knight Piésold is a specialised international consulting company offering
engineering and environmental services in Mining, Environment, Hydropower,
Water Resources, Roads & Construction Services.
I'd like to wrap this up with an explanation of why I am such a firm
believer in Grenville Gold.
When I first was introduced to the company, it was trading at $0.15,
Silveria wasn't in the picture, and the company owned a piece of a half of
a
tiny diamond project in Ontario. But the reason I even agreed to look at
the
project was its new chairman, Len De Melt.
Len is a large man with a booming voice and a no-nonsense approach to
mining. He's not a theory guy..he's a miner's miner.
By that I mean, he has spent his life working underground and in open
pits,
in virtually every mining jurisdiction in the world chasing everything
from
diamonds in Nanavut to Uranium in Australia.
Trying to keep up with his giant strides as he marches up and down
Peruvian
mountainsides is an exercise in endurance. He works tirelessly and travels
in and out of Peru's remotest regions in search of the next Yanacocha,
which
is Newmont's big gold mine and the 3rd largest gold mine in the world. De
Melt did a stint there improving head grades and production flow.
"I like Peru because it's the land of giants," he explains. "If you want
to
find other giants, you go to where they've been discovered in the past.
I've
been exploring in Peru for over 10 years now. I speak the language, and my
partners are well connected in the government. Why would I search
elsewhere?"
Exactly. Why would I search elsewhere for companies to write about when
Grenville, which has quadrupled in value is just over a year, is sitting
right under my nose.
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