A new press-release and a new interview show the great success that Mexico-based gold explorer Tocvan Ventures Corp. (CSE: TOC; OTCQB: TCVNF) has achieved with its recently completed phase-2 drilling program – and what's next.
With the possible end of the gold price correction, Tocvan is in a great position to become one of the best performing gold stocks this year, also because the next phase of project development (so-called “trenching” and “mini-bulk-sampling”) is planned to begin in October. In the past, Tocvan’s share price rose sharply before new project phases began and results were published.
A new interview with Tocvan's VP of Exploration, Brodie Sutherland, was publsihed. Brodie explains what Tocvan has accomplished with the recently completed phase-2 drill program and what's next:
The interview impressively shows what a great success the phase-2 drill program was at the Pilar Gold-Silver Project in the Mexican state of Sonora.
The goal of the drilling program was to expand the known deposit called Main Zone. Expansion drilling is always very risky, as drilling is done outside the known mineralization. But the courage paid off: Tocvan delivered excellent gold grades over long distances with almost every drill hole, thus considerably increasing the dimensions of a potential open-pit.
The maps shown in the press-release and interview illustrate the greatly increased extent of the gold-silver mineralization trend.
Another great interview featuring Tocvan’s CEO Derek Wood:
In October, Tocvan plans to start trenching which has already been permitted by the Mexican authorities along with additional drilling. A total of 7 property sections are planned to be tested with trenching. The subsequent lab results will determine which of these 7 trenches will be mined for a bulk sample of up to 50,000 tonnes. Tocvan’s neighbor Minera Alamos Inc. (TSX: MAI; market cap: C$253 million) has demonstrated over the past few years how quickly such gold projects can move forward and what is important in making a production decision.
Highlights of Tocvan’s drill programs:
- 3 m @ 0.8 g/t gold equivalent directly at surface (hole JES-21-47): this step-out hole extended the Main Zone by 100 m to the south. The first 12.2 m returned 1.1 g/t gold and 12 g/t silver (directly at surface), and 19.8 m @ 1.06 g/t gold from 27.5 m depth.
- 7 m @ 0.96 g/t gold including 12.2 m @ 3 g/t gold from 39 m depth and 13.7 m @ 1.7 g/t gold from 119 m depth (Hole JES-21-50): 50 m southeast of Hole JES-21-47)
- 1 m @ 0.72 g/t gold equivalent from 98 m depth (Hole JES-21-43): This step-out hole extended the Main Zone by 100 m to the east.
- 29 m @ 0.71 g/t gold directly at surface (Hole JES-21-38): This step-out hole extended the Main Zone 30 m to the northwest.
- 4 m @ 0.65 g/t gold (Hole JES-21-38)
- 6 m @ 1.6 g/t gold (hole JES-20-32)
- 2 m @ 1.1 g/t gold (Hole JES-20-33)
- 4 m @ 2.5 g/t gold + 73 g/t silver (Hole JES-20-36)
Minera Alamos 2018 Phase 1 drill program (highlights):
- 5 m @ 0.65 g/t gold (from 2 m depth)
- 4 m @ 1.05 g/t gold (from 19 m depth)
- 7 m @ 0.85 g/t gold (from 32 m depth)
- 127 m @ 0.81 g/t gold (from 23 m depth)
The proposed San Francisco gold mine of Magna Gold Corp. has 1.4 million ounces of gold resources (M&I) at an average grade of 0.446 g/t gold. The San Francisco gold mine is also located in Sonora (only 18 km from Tocvan’s second project, Picacho, and about 200 km from Pilar).
Immediate neighbors of Tocvan’s Pilar project include the Santana Gold Mine of Minera Alamos Inc. (market capitalization: $253 million CAD) with average grades of 0.65 g/t gold from bulk sampling, and Argonaut Gold Inc.’s Colorada Gold Mine. (market capitalization: $957 million CAD) with grades averaging 0.59 g/t gold.
Argonaut has successfully demonstrated over the past several years that gold grades in the range of 0.5 g/t gold are sufficient to operate a highly profitable open pit mine in Mexico, where production costs and mine construction costs are comparatively low.
For Osisko Gold Royalties Ltd. (market capitalization: $2.6 billion CAD), good drill results and a 50,000 t bulk sample were sufficient to acquire a $14 million stake in Minera Alamos Ltd. which was used to finance mine construction. Today, this once small gold explorer Minera Alamos Inc. has a handsome market capitalization of $253 million and has been one of the best performing gold stocks in the world with >800% returns over the last 2-3 years.
Tocvan’s CEO Derek Wood already talked last year about how happy the whole team is with the Pilar project, with 17,000 m of drilling already completed in the Main Zone (by previous operators mainly in the 1990s when the gold price was below $500, and in the 2010s when the gold price was in a long-term correction).
As the chart below shows, Mexico ranks 2nd among all countries worldwide in terms of gold exploration spending. No other country (except Canada) has as much money flowing into gold exploration as Mexico. The mining and exploration companies know exactly why Mexico is so attractive. Mind you, this chart is up-to-date and refers to global exploration spending between February 2020 and February 2021:
Example Minera Alamos: In the last 2-3 years, the gold explorer has impressively demonstrated how quickly a gold project in Mexico can be brought into production. Minera took over the Santana project from another company at a favorable time when the gold price was low. Minera then completed two drill programs and mined a 50,000 t bulk sample, demonstrating gold grades averaging approximately 0.6 g/t gold. With the price of gold rising sharply in recent years, these results alone were enough to attract Osisko Gold Royalties Ltd. as a strategic partner to fund mine construction (i.e., without official resource estimation and feasibility studies). In other parts of the world, it takes much longer to bring a gold project into production. The Santana gold mine was built at record speed, recently completed, and is now set to become a showcase for how quickly things can happen in Mexico.
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