AVM moves to 100% ownership of Victorian gold projects
Our silver and gold Investment Advance Metals (ASX: AVM) has just taken 100% ownership of its gold project in Victoria.
(source)
At the same time, AVM also announced:
- A bonanza-grade gold intercept - 0.2m @ 108.5 g/t gold from one of its recent holes on the project, and
- Metallurgical testwork from the project which returned gold recoveries up to 96% via simple gravity processing.
First on the latest batch of drill results - 108.5 g/t gold…
AVM completed five shallow drill holes to test areas of its project that weren’t mined historically.
The standout came from hole 26 which had a small but very high grade 0.2m interval with gold grades at 108.5g/t.
(source)
The bigger prize on this project is however the extensions at depth AND the potential discovery of “Happy Valley repetitions” - basically new discoveries that mirror the old workings along strike:
(source)
AVM had two holes with assays pending at depth right now.
Second - the metallurgical results - why the 96% gold recoveries are strong
Metallurgical recoveries are often the bit that gets overlooked in exploration stories.
But it can be the difference between a project that gets built and one that doesn’t.
AVM’s confirmed today the Gravity Recoverable Gold (GRG) testwork had total gold recoveries of 91.7% to 96.1%.
Gravity processing is the cheapest type of gold processing.
It doesn’t need cyanidation, doesn’t need flotation circuits, and dramatically reduces both the CAPEX and OPEX of a future processing plant.
So to get 91%+ recovery rates from a simple flowsheet is a good start.
(source)
For a small-cap miner, this is the type of metallurgical profile that you want to see as it points to it being a good chance of being brought into production (if grades and scale can be proven).
If gravity recoveries hold at scale, Happy Valley starts to look like a potentially low-CAPEX, fast-payback development opportunity.
These are still very early days, but it is worth pointing out that positive results seen today allow the company to continue forward with some confidence that this part of the equation is good.
And finally - the deal to take full ownership:
AVM had initially signed a Joint Venture (JV) deal to earn-in its 80% interest in the project for C$3.0M.
Today that original deal got amended to cover the remaining 20% of the project too.
The total outlay from AVM - C$4.0M (an extra C$1.0M for the final 20%).
Now, the payments are structured as follows:
- payments are staged in tranches over three years and AVM can settle each tranche in either shares or cash at its own choosing
- The vendor also gets a 1% net smelter royalty on any future gold production.
(source)
A quick update on AVM’s Mexican silver projects
Today’s news was primarily related to AVM’s Victorian gold project BUT a big part of why we Invested in AVM was for its three Mexican silver projects.
AVM is currently drilling one of its high grade silver project in Mexico..
AVM has three assets in Mexico:
- Guadalupe y Calvo (60.6M oz silver equivalent foreign resource estimate)
- Yoquivo (33M Oz JORC Mineral Resource announced in April)
- Gavilanes (22.4M Oz silver equivalent foreign resource estimate)
The project being drilled is Gavilanes - the highest grade of the three.
And of AVM’s three assets this project has had by far the least amount of drilling done on it.
To date, drilling has only tested ~0.2km^2 of the project area while the ~15km^2 of KNOWN veins are undrilled. (source)
Which means there is a lot that can go right on this with some more drilling... i.e, there’s a fair bit of upside here that is harder to predict.
(source)
The kicker for this project is its proximity to an existing mine owned by $13BN First Majestic Silver.
Right now, the project as it sits might not be big enough to become a standalone development asset BUT even if the resource stays where it is today, it could make for good feedstock to a much larger company's operations.
First Majestic’s San Dimas Tayoltita mine (134Moz of silver) sits ~23km northeast of this project.
(source)
This project is one of those that you just never know how big it might be, until AVM drills it out.
Now we are waiting to see IF AVM can grow the existing resource on the project with its up to 4,500m diamond drill program.
AVM is targeting a JORC resource on the project “later this year”.
What we want to see next from AVM
AVM’s three silver projects in Mexico
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Here are the milestones we are tracking across the three projects AVM owns in Mexico:
Gavilanes
- 🔲 Sampling program on historic drillcore
- ✅ Target generation work ahead of drilling
- 🔄 Maiden drilling program
- 🔲 Maiden JORC resource (hopefully upgrading the 22.4M ounce silver equivalent resource)
Yoquivo:
- 🔲 Resource growth drilling at Yoquivo
- 🔲 Open-pit potential assessment
Guadalupe y Calvo (GyC)
- 🔲 Maiden drilling program, subject to permits and approvals.
- 🔲 Maiden JORC resource converting the 60.6M oz silver equivalent foreign estimate.
Victorian gold (Australia)
At AVM’s gold project in Victoria, we want to see more assay results from all of the drilling AVM’s done over the last few months.
(source)
