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Prospero all set to drill in some of the most prospective silver country in the world

Prospero Silver has set the drill rigs turning on its Mexican silver projects
Prospero all set to drill in some of the most prospective silver country in the world
Prospero's projects are located in some of the richest silver country in the world

Markets and mining can work very effectively together, but when one side loses touch with the other, then a company can start to drift.

That, broadly, was the situation at Prospero Silver Corp (CVE:PLS) when Ralph Rushton was approached in mid-to-late August last year to try to breathe new life into the business.

There was no problem on the geological side, as Rushton divined immediately.

“They’d put in as technical director Tawn Albinson, who’s forgotten more than most of us will ever know about Mexican geology,” says Rushton.

Since Rushton has spent much of his 30-odd year career visiting mines and exploration projects around the world, that’s saying something.

Rushton’s role therefore wasn’t to scout out projects to bring the company back to life on the markets. Rather it was to reinvigorate the company’s presence on the markets to bring life back into the assets.

In his time, Rushton has participated in fundraisings that add up to a total of more than C$400 mln, and it was no surprise that once he’d settled into his new role as Executive Vice President Business Development he revealed he had a trick or two up his sleeve.

“The company had about C$80,000 in the bank when I joined, and that allowed them to take the odd chip sample and do not much else at all,” he says.

In its favour though, directors and key personnel weren’t accruing salary in the form of shares or debt, but were simply working on in the belief that the assets would one day pay off big enough to make it worthwhile.

That sort of commitment is always worth paying attention to, and it certainly dovetails with Rusthon’s assessment of the qualities of Albinson’s geological expertise.

“I went down there and looked at the projects and came back really impressed,” says Rushton.

“After that I went to see guys I knew straight away on the buy side and Sprott came back immediately. So Canaccord, Haywood and Sprott came in for C$1.9 mln.”

Lo and behold, Prospero was back in business.

“The second phase of the 18-month plan that we laid out as a management team,” continues Rushton, “was to get a strategic investor or major partner. So we approached a few companies and eventually one that I know well, Fortuna Silver, agreed to put in C$1.5 mln in a placement at C$0.28 for a share and a warrant.”

This deal is broadly similar to one Fortuna has with European-focussed Medgold (CVE:MED) and involves Fortuna financing exploration on a select small portfolio of projects and then electing or not to progress further with whatever looks good in a formal joint venture.

“C$1.2 mln gets put into the ground in a drill programme, that’s our undertaking to them,” says Rushton. “The other 20% goes into the generative effort.”

The “generative effort” refers to Prospero’s wider and longer term efforts at project generation in Mexico.

But in the near-term the company has a much more pressing priority.

“With the C$1.2 mln we will drill three projects,” says Rushton. “We want to demonstrate that Tawn’s ideas are correct. The first step is to make sure that the concepts work.”

There’s every confidence that they do, such that Fortuna, Sprott and Haywood have all put good money on the table. Albinson has lived in Mexico his whole life and spent his entire career exploring in Mexico. He has his own Mexican analytical laboratory and is also a well-known academic in Mexican geological circles.

In that sense, he’s got it all going on.

But now it’s down to the nitty gritty of drilling. Fortuna has selected the Matorral, Petate and Pachuca South East deposits as being the most prospective from its point of view, and with the money in the bank drilling is now underway.

“All these projects have structural geological control,” says Rushton.

“We need to know which way the fault is going and that will be the first job of each hole. They need to look at where we are vertically in the epithermal system – you need to know where you are relative to the payshoots.”

So it might not be bonanza grades from the get-go. “The best we can hope for is that we drill straight into a vein,” continues Rushton. “But we might have to drill around a bit.”

But if investors waiting for immediate gratification aren’t instantly satisfied, it’s worth remembering the context in which Prospero is working here.

The old Pachuca mine, not too far from Prospero’s Pachuca South East project, produced around 1.2bn ounces of silver and drove much of the Spanish Empire.

“This is a district that hosts some of the biggest epithermal systems in the world,” says Rushton.

“Tawn’s visited as many of the historic mines in Mexico as he can and looked at them both underground and at surface. If there’s anyone who knows what these things look like at the outset, it’s him.”


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