New Look At Old Silver Mine Yields Potentially High World Ranking Re-Discovery.
Resource is Already Approaching 100 million oz Ag with Barely 30% of the Structure Drilled. Deposit is Open at Strike and at Depth
Financed by Eric Sprott, Drills are Turning at this Bonanza Silver Discovery with Results that have Caught Investors Completely Off Guard
Prophecy’s (PCY.TO; PRPCF.OTCQX) Pulacayo Discovery Could Soon Produce the Biggest Winner in this Silver Bull Market
October 2, 2019
It’s an old story. Pulacayo is a high grade historic silver underground mine in Bolivia at which Apogee Silver Ltd spent over $28 million drilling from 2005 to 2012 before Pulacayo was sold to Prophecy in 2015 when silver hit the bottom. Apogee has since changed its name to focus on Cannabis business.
An Open-pit Angle at an Underground Story
Apogee had taken on the Pulacayo legacy with a plan to resume underground mining. They drilled in a small area (30% of the known strike) near the San Leon tunnel and developed an underground reserve. Unfortunately, they completely missed the big picture: mineralization starts from surface and is continuous to a depth of 1,000 meters. Pulacayo is ripe for bulk tonnage open pit mining, which is an ideal call option on rising silver prices.
Pulacayo mineralization starts from surface (100g/t) with increasing grades (500g/t) at depth.
An Example of Re-Disocvery that Reaped Giant Rewards
If you are searching for an example of a profitable new spin on an old project, look no further than Pulacayo’s neighbor San Cristobal, which is currently the world’s third largest active silver mine.
San Cristobal is 100 km to the southwest of Pulacayo by highway.
The San Cristobal silver-lead-zinc mine contains 533.38M oz of silver reserves (Dec. 2011 est.), making it the third biggest silver mine in the world. It is owned and operated by Minera San Cristobal (MSC), a wholly owned subsidiary of the Sumitomo Corporation of Japan.
San Cristobal is an open-pit mining operation with a 40,000 tpd concentration plant. The mine’s annual output is up to 600,000 t of lead, silver, and zinc concentrates (over 20 million oz silver, 550 million lb zinc, and 180 million lb zinc).
Click to play San Cristobal Clip
San Cristobal was an artisanal high-grade underground mine in the early 1900s. In 1993 NY financing billionaire baron Tom Kaplan acquired it, and conceived and marketed San Cristobal as an open pit operation. It became a giant success story for Kaplan, who reaped hundreds of millions of dollars before San Cristobal was eventually sold to Sumitomo, which commissioned San Cristobal as an open pit mine in 2010.
With shrewd management by Prophecy, which sees the big picture and has an execution track record of M&A and mine development, Pulacayo may just become the next San Cristobal.
Pulcayo: Successor to San Cristobal ?
Drilling by Apogee, which covered roughly 1,000 m strike x 300 m depth, culminated in 20.7 mt historic resources* (70million oz Ag@100g/t, & 1.5% Zn, 0.8% Pb).
*historic resource by TWP Jan 17, 2013 for Apogee Silver Ltd, not 43-101 compliant and should not be relied on
Apogee also discovered and drilled a satellite Paca open-pit resource 7 km north of Pulacayo which yielded 20 million inferred silver oz at 257 g/t, making the combined Pulacay Paca district resource at nearly 100 million silver oz.
Extensive records by Hochschild mining demonstrated a 3 km strike for Pulacayo Tajo vein system which is open past 1 km at depth.
Prophecy is planning wide step-out drilling that would expand strike to 3,000 m and depth to 600 m. This would essential triple the resource strike length and double the resource depth, thereby multiplying the existing known resource.
Pulacayo: Deja Vu of Lee’s Success in 2011 with Welllgreen at Prophecy Platinum.
I recall in 2011 when John Lee, who is currently Prophecy Development’s executive chairman but was was then also the Chairman of Prophecy Platinum, meticulously assembled Yukon’s Wellgreen PGM land package with a history of disjointed drillings from various landowners. The consolidated Wellgreen package ended up with a 150 million+ tonnes open-pit resource containing millions of ounces of in-situ PGM in the ground. The resource announcement jolted Prophecy Platinum stock (now Nickel Creek) tenfold in 2011, many of my subscribers that followed Prophecy reaped handsome profits.
Lee’s vision and negotiating skills have been masterful then, and I believe he will do even better with Pulacayo.
Pulacayo is a much better asset than Wellgreen, in terms of grade, metal recovery, and infrastructure access (water, power, rail, and port). Second, Lee recruited Michael Doolin as Prophecy’s COO, who built 3 Nevada gold mines and transformed Klondex Mines Ltd from an explorer to a billion dollar NYSE-listed company before it was sold to Hecla in 2018. Third, we are in a full fledged silver bull market in which silver prices could run much higher and potentially reach or eclipse the prior 1980 and 2011 peaks of $50 an oz. In this bull market, Pulacayo + Prophecy is a can’t miss.
One of Lee’s several visits at Pulacayo
1,000g/t silver samples
Here is the Opportunity
Prophecy just completed a $2.6 million financing lead by billionaire Eric Sprott.
With the Pulacayo-Paca resource already approaching 100 million oz Ag (covering just 30% of known mineralization), resources at Pulacayo would potentially multiply as Prophecy keeps on drilling to prove up new resource.
The investment community will soon be caught off guard and unprepared for what Prophecy is about to unveil—a generational, world-ranking open-spit silver re-discovery that rivals San Cristobal.
With San Critobal mine reserve becoming exhausted in 2023, Pulacayo could be a prime take-over candidate by the Japanese. I also hear Lee is gaining traction with Chinese mining majors, then there is the Sprott and New York outfits (maybe Kaplan, who also invested in Wellgreen?)
In this major silver bull market, Prophecy is trading at $40 million Canadian, about 1/10 of New Pacific (TSX: NUAG), whose Silver Sands project is next to Pulacayo. Simply put, if you own New Pacific, you should also own Prophecy.
Subscribers ought to take a serious look before drill results are in and Prophecy gains further institutional exposure.
Editor of Silver Elephant
Historical Background of Pulacayo Mine
Silver mining at Pulacayo began around AD 1545, during the Spanish colonial period. But there are no recorded production details. The first work formally recorded was carried out in 1833. Revenue from the mine funded the first railway line in Bolivia. In 1888 it connected Pulacayo to the port of Antofagasta, Chile. In 1891, reported annual silver production reached 5.7 million ounces. Mining operations at Pulacayo at that time were the second largest in Bolivia. Work continued through the intervening years until the mind was closed in 1959 due to an exhaustion of reserves, a lack of exploration, and rising costs. The total output from the Pulacayo mine during this period, as estimated by the National Geological and Mineral Service of Bolivia (SERGEOTECHMIN), was 678 million ounces of silver, 200,000 tons of zinc, and 200,000 tons of lead. Production at Pulacayo was predominantly derived from Veta Tajo (the Tajo vein system), which had been defined along a strike length of 3 km and to a depth of more than 1000 m.
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