Prime Mining Corp. has announced encouraging drilling results at its flagship Los Reyes gold-silver project in Sinaloa, Mexico, suggesting that the three main deposit areas at the site are larger than previously reported. The company’s updated technical report highlights the potential for new discoveries, particularly in mineralized trends identified outside the currently defined resource areas.
Following the announcement, Prime Mining’s shares saw a modest uptick, rising 1.34% to $1.51. The company’s stock has traded within a 52-week range of $1.13 to $2.50.
Expanded resource estimates
Los Reyes, a high-grade, low-sulphidation epithermal gold-silver project, has seen significant exploration progress since Prime acquired the property in 2019. The company has invested more than $59 million into direct exploration and has completed over 210,000 metres of drilling to date.
As of October 15, 2024, Prime reported an updated multi-million-ounce, high-grade, open-pit constrained resource. The new resource estimates show significant growth in both indicated and inferred resources:
- Open-pit milled resources:
- Indicated: 1.27 million ounces of gold equivalent (AuEq) (24.7 million tonnes at 1.60 g/t AuEq)
- Inferred: 335,000 ounces AuEq (7.2 million tonnes at 1.45 g/t AuEq)
- Underground milled resources:
- Indicated: 664,000 ounces AuEq (4.1 million tonnes at 5.00 g/t AuEq)
- Inferred: 406,000 ounces AuEq (4.1 million tonnes at 3.12 g/t AuEq)
- Open-pit heap-leach resources:
- Indicated: 261,000 ounces AuEq (20.3 million tonnes at 0.40 g/t AuEq)
- Inferred: 76,000 ounces AuEq (5.9 million tonnes at 0.40 g/t AuEq)
The company has also revised its fiscal 2024 exploration program, increasing its drill campaign to 50,000 metres from the previously planned 40,000 metres, in response to the positive results from ongoing drilling.
Ongoing drilling and exploration potential
Prime Mining emphasized the significant upside potential at Los Reyes, with mineralization remaining open along strike and at depth. The ongoing drill program is focused on high-grade mineralization in both the northwest and southeast extensions of the Z-T Trend, the southeast extension of the Guadalupe and Central Trends, and other emerging targets across the property.
With five drill rigs currently active on-site, Prime is continuing to expand the exploration footprint. The company also noted that historic mining operations at Los Reyes recovered an estimated 1.0 million ounces of gold and 60 million ounces of silver between 1770 and 1990, further highlighting the project’s rich mining history.
Location and project history
The Los Reyes project is located on 37 contiguous mining claims spanning 6,300 hectares, situated approximately 43 kilometres southeast of the mining centre of Cosala, Sinaloa. Mining activity in the region dates back to the 1700s, and the area has a long history of mineralization.
Prime Mining acquired the Los Reyes project from Vista Gold Corp. in a deal that included the buy-back of two separate 2% net smelter royalties and a 49% back-in right on underground mining. The project had been on track to become a heap leach mine in 1998, but was mothballed following a decline in gold prices.
Before Prime’s acquisition, previous operators invested approximately US$20 million on exploration, engineering, and prefeasibility studies.
Looking ahead
Prime Mining’s exploration success at Los Reyes is positioning the project as a potential cornerstone asset in its portfolio. With an expanding resource base, ongoing high-grade drilling results, and a robust exploration program, the company is well-placed to advance the Los Reyes project toward development.
As the gold and silver market continues to attract investor interest, Prime Mining’s efforts to expand resources at Los Reyes could make it a significant player in the growing precious metals sector.
