Red-Hot Resources

"Luck is not chance, it’s toil; fortune’s expensive smile is earned.”

Monday, November 06, 2006

Back On The Surface

Well, that was quite a trip! I'm back on the surface after visiting an underground Mexican silver mine.

I looked at the mine and its mill from top to bottom.
And by that I mean I started at a cliff top and worked my way all the way to the bottom of a mine shaft 140 meters below the surface … I talked to the people working there and examined the rock in the mine, drill cores and charts of their drilling results.

I’m not a geologist, but you don’t have to be one to come to some simple conclusions: It is a rich mine … the proven resource is likely just the tip of a MUCH LARGER resource … and I believe this stock is an easy double in the next year.

The trip started at a hotel in Durango, Mexico, where I joined a select group of other analysts before dawn. We made our way to the airport and crammed into a small plane. So small, in fact, that I had to crouch over to fit my big ol' American body in.

After a 45-minute ride over steadily rising plains dotted with orchards and farms, we flew over the foothills of the Sierra Madre. We landed in a horse pasture. I know this because the pilot had to chase away the horses before we could take off on our return journey.

The countryside was beautiful.

A quick survey of the town from a cliff-top showed us the area’s rich history. The Conquistadors started mining here in the 1500s, and the countryside is littered with abandoned tunnels, crumbling workings and even the tall stone smelter chimneys of Cornish miners who came here to mine tin. And yet despite the hundreds of small-scale efforts and a few really big and organized projects, one explorer after another missed the silver
motherlode that the company I visited is sitting on.

After a delicious breakfast of eggs and home-made salsa and a quick mine safety course (Rule #1: Don’t Die), we strapped on our gear and boarded motorized carts for the trip into the mine.

First, we passed through the old, historical workings. Then the shaft pitched downward and we started our descent. Looking up at the roof of the shaft, we could see the remains of the ore vein, and it guided our path lower. There are about five or six areas in the mine that are being actively worked to one degree or another. The main body of the work is being done in a rich area of nearly-white rock against which the dark streaks and specks of the silver ore stood out sharply.

“This,” one worker told me, handing me a piece of the ore-rich rock, “is the honey-pot of the mine.”

Workers in one section were busy drilling holes for explosives. The mine blasts twice a day – making sure everyone is safely outside first – and then they go in and scoop up the ore. At right, you'll see a photo of one of the drills that make the holes for the explosives.

About 60 dump trucks per day make their way up the mine and deliver ore to the mill to be crushed and processed.

We pulled into alcoves as the big trucks roared past us. The silver vein dives into the Earth at about a 52-degree angle. The miners get as much of the ore as they can in one area, then tunnel around in a circle to mine below where they went before. We followed this path deep into the mine, a 7-kilometer road that ended 140 meters below the Earth.

It was the end of the road, but not the end of the vein. Indeed, the miners are finding that the ore is getting RICHER as it goes DEEPER.

to be continued ...
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