Over the next 30-45 days, Gainey will share the assay results from its detailed mapping and stream sediment sampling programs that were announced over the past months. These programs have been carried out by Minera Cascabel SA de CV of Hermosillo, Mexico, a group that is considered leaders in precious metals exploration throughout Mexico. Minera Cascabel’s Senior Geologist, Rafael Gallardo, is leading our aforementioned programs and has come up with some significant findings.
Early discussions with our geological team indicated that we could have a very large mineralized system with high gold and silver grades on our 100% owned El Colomo property located in the highly-prolific Sierra Madre Occidental Trend in Western Mexico
Rafael Gallardo was quoted earlier this year saying, “El Colomo is one of the best properties with the highest potential I've seen in my 31 years of exploration. I'm excited to see our soon to be defined drill campaign test these prospective targets in the coming months.”
We’ve focused our detailed mapping initiatives on the aptly-named ‘Golden Zone.’ This is an area 3 km long and 1 km wide within our El Colomo Mineral Concessions, which currently contains 21 mineralized vein systems. The Golden Zone is a prolific gold region along the Sierra Madre Occidental trend where our 192 km2 El Colomo property is located. The mineralized vein systems that we are focused on within the Golden Zone include La Nueva Victoria, La Higuerita, El Arrayan, La Bufa, El Guayabo and Las Minitas areas
This detailed mapping program will help us identify specific drill targets for our proposed, upcoming drill program that is to commence early 2016. This drill program has been pushed into early 2016 because of the unexpected weather conditions we encountered this Monsoon Season in Mexico. We’re currently negotiating with several drilling companies that have extensive experience with this type of geological system within Mexico. Numerous drilling companies will be visiting Gainey’s Golden Zone area to conduct due-diligence site visits over the next 2-3 weeks in order to thoroughly analyze the property and targeted zones.
Gainey’s El Colomo property is on the investment community’s radar and has been visited by several large precious metal investment groups, funds and corporations for the following reasons:
1) 192 km2 land package in a potentially high gold and silver mineralized zone
2) Strong working agreement with the local Indian community
3) No security issues in this region of Mexico
4) Infrastructure in place (water, power, labour force, roads, etc.
In addition, please continue to be aware that Gainey is close to putting together a solid revenue and profit sharing strategy with various local groups. We are continuing to sample and process their mineralized materials at our 100%-owned, 300-tpd Toll-Processing Facility, which can immediately expand to 600-tpd if needed. We will also continue to provide further updates on these collaborations over the next weeks and months.
We’re on track to becoming a district play within Mexico and look forward to providing further updates on Gainey’s exploration and toll-processing activities.
David Coburn, CEO of Gainey Capital
We are very excited to share that the company is close to processing mineralized materials from several local groups in Western Mexico, which could add further cash flow to our company, greatly benefiting both shareholders and Gainey Capital.
The varying levels of mineralized material that we’ve been sampling over the last few months has allowed us to get a strong handle on our overall costs, production efficiencies and productivity levels as well as establish strong working relationships with key local groups. I am very comfortable in saying that we will continue to be a very low-cost tolling operator in Mexico and we will eventually start to process some of our very own mineralized material from our 100%-owned El Colomo property.
As the precious metals market and prices continue to fluctuate, we will survive and prosper in the months and years to come.
As I’ve mentioned, our strategy is to move towards a model that allows us to purchase and process mineralized material at a discount from properties in the area, which provides us with capital to further develop our own exploration properties.
In 2015, we will bulk sample our own mineralized material from our 192-km2, El Colomo property located in the highly prolific Sierra Madre Occidental Trend in western Mexico at our 100% owned Toll Processing Centre.
I’m happy to say that we are finally close to putting together a solid revenue and profit sharing strategy with the following local groups:
We have been sampling Goldplay’s mineralized material from 2 of its 3 highly prospective gold properties, which turned up very positive results that both Gainey and Goldplay were excited to discover. Based on these strong early results, we see a significant opportunity to executive a profitable processing strategy that could last as long as 12-14 months. We are very close to putting together a working agreement with Goldplay, which will be profitable for both companies.
Goldplay’s properties are strategically located in close proximity to Gainey’s Huajicori, Nayarit Toll Processing Center. Mineralized material from Goldplay’s first, second and third property contains ~6,000-7,000 tons, ~10,000-12,000 tons and ~100,000 tons, respectively and could potentially total more.
As an added note, Goldplay is working on several other sampling and processing programs with Gainey. Goldplay comes with a very strong technical team who has over 30 years of experience working throughout this area and is led by Geologist, Frank Powell, who has a proven track record of major discoveries throughout Latin America.
We are working with Belmex on an opportunity that involves the shipment of mineralized material from a new property in the area that looks extremely promising. We’ve already begun receiving mineralized material from their properties and will further explore the potential of this new prospect. We will provide further updates soon.
Another exciting opportunity that has tremendous upside potential is the renowned El Tigre property, which is located merely 7-km from our Toll Processing Centre. El Tigre was once a very successful gold and silver producer with its own processing centre. More to come on this shortly as we continue to work with the owners of El Tigre.
PICACHOS EJIDO COMMUNITY
We’re currently discussing the many opportunities that the Ejido community has brought forth. They occupy 2,000-km2 in the area and are located only 3-km from our Toll Processing Center. More to come on this opportunity as well.
GARABALDI RESOURCES AND COSALA MINING
We’re are continuing to work on other processing opportunities with Garibaldi and Cosala, which may require further sampling in the months to come. There are a lot of factors to consider in the tolling process and we are moving forward in exploring all potential opportunities and synergies.
Through these new opportunities and strong working relationships with local groups, Gainey is one step closer to becoming one of the most successful tolling operations in Mexico. We’re very excited for the coming year and look forward to providing further updates on our progress as the year goes on.
David Coburn, CEO of Gainey Capital
Gainey’s Toll Processing/Revenue Sharing Facility has been operational for little over 6 months and we have been making considerable headway. We want to provide our shareholders an update as we have been receiving considerable interest from mining groups in the area of western Mexico.
Let us highlight the following map that shows the mining groups that we’re currently in discussions with to process their mineralized material at Gainey’s 100% owned Toll Processing/Revenue Sharing Facility.
As you can see in the following map, there are numerous groups that have already entered into full discussions with the company. The overwhelming interest is just the beginning of Gainey’s strategy to become one of the largest toll-producers in the state of Nayarit, Mexico. We’re close to closing several of these tolling and revenue sharing agreements, which we expect to announce in this quarter.
Our Toll Processing/Revenue Sharing Facility is becoming well known in the area since the major overhaul and continuous upgrades to the Gainey processing centre. In addition to these major renovations, our attractive revenue sharing model continues to initiate countless high-level discussions between Gainey and local groups to process their materials from surrounding properties. Not to mention, current operations at our Toll Processing/Revenue Sharing Facility have resulted in the company being cash flow positive per our last two quarters at our Mexican operation.
We’d like to note that Gainey plans on bulk-sampling its own mineralized material from its 100% owned 18,766 hectare El Colomo property located in the Sierra Madre Occidental Trend in western Mexico in 2015 at its 100% owned Toll Processing/Revenue Sharing Facility. In conjunction to processing Gainey’s own material, as the company progresses, we aim to move towards a model that allows Gainey to purchase and process the mineralized material at a discount from properties in the area, which will give the company numerous funds to further develop its own exploration properties.
Gainey’s Toll Processing/Revenue Sharing Facility can support processing of 300 tpd and has the capacity to immediately expand to 600 tpd. Through these toll-processing agreements the company will further expand operations and has the capacity to process upwards of 1000 tpd when the opportunity arises.
Gainey is often compared to companies with the toll processing business model, like Dynacor Gold (TSX: DNG) and Inca One Gold (TSX.V: IO), who have been in business for many years. Given the historical progression of companies like these, Gainey is well ahead of the curve and making substantial headway in comparison.
We’re not going to be successful overnight but we are well on track to becoming a very successful Toll Processing/Revenue Sharing company in Mexico.
As we continue our regional outreach related to the many independents in Sierra Madre we’ll update this map and I’ll be sure to share with you. Meanwhile, if you have any questions, please don’t hesitate to get in touch.
David Coburn, CEO of Gainey Capital
The current market conditions are making things tough for a lot of juniors out there. At Gainey, however, we’re in the enviable position of being well-funded and, due to our business model, have attracted best-in-breed shareholders such as Mexican billionaire Ernesto Eschavaria.
So, although the markets are volatile, we are excited at the opportunities in front of us. In particular, there are potential accretive acquisitions, in the form of high-grade ore bodies, lying close to our property. We are in the process of evaluating these possible targets with the aim of making acquisitions and running the ore through our nearby 300 tpd processing mill.
As you know, it’s our intention to use every possible advantage when it comes to growing the company and shareholder value. Here are just a few points I want to draw to your attention:
- Gainey has over 192 km2 of exploration potential in the prolific gold/silver Sierra Madre region of Mexico and is surrounded by major producers with multimillion Oz deposits.
- We already have 21 high-grade target zones identified at our El Colomo property.
- We plan on using cash flow from our 100%-owned, 300tpd mill/processing centre to fund our ongoing exploration programs.
- We plan to double our mill capacity to 600tpd in the near future at very low capital cost and with no additional permitting required
- We’ve attracted the top geologists in Mexico, Peter Megaw and Minera Cascabel, who will be leading the work to prove out and host a new resource.
Please, at your leisure, peruse our current presentation and if you have any questions, please don’t hesitate to get in touch. You can also connect with us on Twitter and LinkedIn for timely updates.
David Coburn, CEO of Gainey Capital
It’s hard to describe just how much (unprocessed) high grade ore exists in the gold and silver-rich region of Sierra region in Western Mexico. Prolific is a popular term, so is abundant, plentiful… let’s just agree there’s a lot. Less common in the region are fully optimized, operational mills like ours that have gravimetric/flotation circuits for processing ore at a highly cost-effective and efficient rate.
Thanks to our advanced gold and silver mill/processing center, Gainey became officially cash flow positive in August – the first month following our upgrade and enhancement program. This is a very exciting time for the company as we continue to sample ore from the many high-grade ore bodies near the mill while simultaneously gearing up for phase one exploration at our El Colomo property.