Angela Harmantas | December 1, 2017 | SmallCapPower: Five hundred kilometres due north of Toronto, the sleepy town of Cobalt, Ontario, is living up to its namesake. Ever since cobalt (the metal) became the darling of the commodity markets, companies are flocking into Cobalt (the town) to examine new and historic deposits that are suddenly very attractive thanks to higher metal prices and surging demand.
Frank Basa, CEO of Castle Silver Resources Inc. (TSXV:CSR), is already intimately familiar with the geology of the region. He has been working in and around Cobalt for nearly 35 years, having formerly worked as a cobalt-silver metallurgist at Agnico Eagle’s mill near Cobalt when it was mining silver and cobalt at various properties in the area in the 1980s, and more recently leading successful exploration activities at the Castle Mine after his Company acquired it in 2010. He knows the importance of having boots on the ground in the region itself, to explore with the naked eye rather than remotely in an office far away. He understands how frustrating the cobalt deposits can be to drill, even with visible cobalt at surface. And he knows just how to drill the deposit to return the very best results.
“Drill for structure, mine for grade,” said Mr. Basa, when asked about his approach to exploration on the property. “When we talk about structure, what we are really referring to are the veins and how they wind through the rock. Then you mine only a certain portion of the entire vein system, just the higher-grade area.”
CSR’s portfolio of projects includes the historic Castle Silver mine located 85 kilometres northwest of the Town of Cobalt. The mine operated on and off between 1917 and 1989 and produced nearly 300 million grams of silver and 376,000 lbs of cobalt. Today, Castle Silver Resources is hoping to resurrect the Castle Silver mine, but this time as a primary cobalt producer.
So how does the “drill for structure” motto apply at Castle Silver’s main property? “There is high-grade cobalt all over the site, but to mine it, our cutoff is at least 0.3% or higher,” said Mr. Basa. “I don’t think anything under that can be mined in the Cobalt camp.”
Recent drill results support the new approach. An exploratory surface drill program within 200 metres of the adit at the Castle Silver mine intersected mineralization in every hole, with 1.55% cobalt, 0.65% nickel, 0.61 g/t gold and 8.8 g/t silver over 0.65 metres at 3.85-4.5 metres, a very shallow depth.
Castle Silver Resources is fielding investment interest from Japanese and Chinese buyers of cobalt-based salts that are used in the lithium battery market. But in order to reach the scale needed to become a significant producer in the cobalt market, Mr. Basa thinks a major consolidation has to occur within the Cobalt mining camp.
“For most of the companies in the Cobalt camp, the size of the resource will never justify building a mill,” he said. The Castle Silver mine is expected to produce around 900 tonnes per year of cobalt on its own accord. “The only way that we are building a mill is by tying it onto one of our sister properties, Granada Gold Mine (TSXV:GGM), which has 5 million oz of gold.”
Castle Silver Resources recently signed a provisional agreement with GGM that permits the development of a flowsheet for the mill that can equally process the ore from Granada as well cobalt‐silver‐bearing mineralization from Castle Silver. Mr. Basa is CEO of both companies.
For now, CSR’s focus is on structuring agreements with investors as well as completing trenching and bulk sampling underground. The Company hopes to be drilling for structure again in 2018.
Mr. Basa is hopeful that other companies in the Cobalt camp will come up with positive results as well. “Castle Silver has the technical expertise of people who have worked in the camp before and understand it,” he said. “The camp is not like anything else in the world, it’s very special. It’s simple – get your boots on the ground and you’ll find it.”
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