Progress at Tocvan’s advanced Pilar gold project is impressive, and shareholders are responding. Tocvan Ventures released an update this week regarding the 1,000 ton bulk sample, precious metal diagnostic testing, and $600,000 financing to an institutional investor, highlights include:
- Precious metal diagnostic leach head-grade results return high-grade gold;
- Bulk sampling and plant conditioning completed;
- Coarse-free gold visually identified in screened material;
- Gravity recovery circuit added for testing:
- $600,000 private placement to an institutional investor.
Tocvan Resources had another strong week of trading, closing at $0.73 on Friday, trading over 385,000 shares for the week. Trading continues to be relatively thin as a small number of shares were sold by impatient shareholders exiting the play, but this was more than balanced by new investors beginning to take note of what is happening. The share price has been steadily moving up since March 1 and is now equal to the share price in the spring of 2022 before the general overall pullback in the junior resource sector. Tocvan traded 1.74 M shares for the month of March, a good pace for a thinly traded stock with less than 40 M shares outstanding.
A good overview of the bulk sample progress comes from the Press Release this week, “Tocvan Ventures Corp. has provided a progress update on its first bulk sample at the Pilar gold-silver project in Sonora, Mexico. Over 1,200 tonnes of material have been stockpiled, with first shipments of material completed. Crushing, screening circuit and laboratory set-up is completed. Material crushing and screening have started. Foundation and drainage system for leach pad installation is continuing.”. I am very encouraged to see the extent of progress over a relatively short period of time. Building a relationship with a local producer 25 km away has certainly added to the efficient use of capital and rapid collection of samples and setup of the processing system.
A further quote from this week’s Press Release, “We are extremely pleased with the bulk sample progress so far and how quickly we are learning more about the robust mineralized system at Pilar,” stated Brodie Sutherland, chief executive officer. “All the material we need for the sample is now stockpiled. Through trenching and excavation for the sample we have unearthed historic workings that clearly were focused on higher-grade mineralization; this will provide us with key information to aid in future targeting. The new exposures are also giving us excellent structural data to enhance our modelling. We are also seeing free gold visible in the finer fraction of sample material which we will evaluate further. In addition, the first results highlighting the head grade for samples collected for diagnostic leach have returned very encouraging results. We look forward to updating shareholders as we progress.”.
Of particular importance is the depth and width of the trench sampling. Here is a link to a video that shows the trenching in action at Pilar. Why is sample size important? My dad always said, “be careful when interpreting assays from samples collected during exploratory field programs as they are generally biased since they are visually picked, not statistically picked”. The depth and width of trenching conducted on Pilar ensures an adequate statistical sample size that is more representative of an area. It will be very instructive to see the results of the heap leach study as they will lay the basis for an economic analysis and potential production decision.
Here is a link to the video showing bulk sample extraction (well worth watching)….
Tocvan is also conducting precious metal diagnostic leach tests to determine head grades. These have returned high-grade results with five samples averaging 6.2 grams per tonne Au, 7.6 g/t Au, 1.3 g/t Au, 11.1 g/t Au and 7.6 g/t Au, respectively. These samples were each over 10 kg. Diagnostic leach tests are continuing.
Of significance, the preliminary results from the diagnostic leach study suggest “FREE GOLD” is present in samples and has been confirmed visually by testing sieved (less than three-eighth inch) material. Subsequently, they have added a gravity concentration to the processing system to conduct formal testing for the presence and abundance of free gold in the finer-grained fraction. In certain areas, where free gold is present and abundant, this has the potential to significantly increase the economics of Pilar.
Another impressive aspect of Pilar is the number of historic underground workings. Much to management’s surprise during deep trenching at Pilar related to the bulk sample, trenching unearthed several new buried underground working entrances along quartz vein structures. This is a further indicator that mineralization starting at the surface is generally more widespread than previously thought. We already know mineralization extends at depth, for example, drilling in 2022 cut across 116.9 m at 1.2 g/t Au, including 10.2 m at 12 g/t Au and 23 g/t Ag. The extent of quartz veining underground isn’t fully known yet, but as drill snapshots are pieced together, they will hopefully outline a complete picture of the underlying gold structures. I look at it this way, the underground workings throughout Pilar always start with a quartz vein visible at the surface, just imagine how many veins have been covered over by erosion, don’t extend to the surface, and have yet to be discovered.
How much more is there to be discovered at Pilar?
Three primary zones of mineralization have been identified in the northwest part of the property from historic surface work and drilling, and are referred to as the Main zone, North Hill and 4-T. The Main zone and 4-T trends are open to the southeast and new parallel zones have been recently discovered. Structural features and zones of mineralization within the structures follow an overall northwest-southeast trend of mineralization. Mineralization extends along a 1.2 km trend; only half of that trend has been drill tested thus far. To date, over 23,000 metres of drilling have been completed. I suspect drills will be turning soon at both Pilar and El Picacho.
I am hoping Tocvan will accelerate their drill programs after having just executed a term sheet for a $600,000 private placement with an institutional investor. The private placement consists of 1,102,941 units of the company at a price of 54.4 cents per unit, for aggregate gross proceeds of $600,000. The Company will receive $50,000 per month from the closing date of the offering over the next 12 months. The offering structure is an extension of the private placement structure previously disclosed by the company in its news release dated June 30, 2022.
I love investing in companies who are aligned with deep pocketed financial institutions as they generally invest with a long time horizon, i.e. end point of achieving production or being acquired. Essentially free cash flow for a year with minimal share dilution..Institutional managers who seek approval from their Board of Directors generally allocate a follow-on investment equal to or more than their initial investment. Like my dad said, “in for a penny, in for a pound”, they are generally more flexible in their financial structuring and willingness to participate in future rounds and exercise of warrants.
It looks like they are a good partner, as each unit consists of only one-half of one share purchase warrant, with each unit warrant entitling the holder to purchase one additional common share at a price of 68 cents per unit warrant share, for a period of 36 months from the date of issue. Institutional investors always tag along fees and free stock to average down their investment, in this case the investor knows money is important to advancing Pilar, so they have waived their $36,000 fee in cash by the issuance of 66,177 common shares and 33,088 warrants on the terms noted above.
It is already April. Spring is here. I hope the Easter Bunny treats every one.