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Toronto-listed Brigadier Gold (TSX-V:BRG / OTC:BGADF / FRA:B7LM) is a fast-moving junior mining venture which has positioned itself well between two other projects that are already yielding very good results.

In summary:

  • Exploration led by a highly experienced geologist who knows the region well and has been involved in many high profile Mexican mining ventures
  • Well-situated in one of the richest gold and silver producing areas in the world
  • Close proximity to a pair of other projects yielding bonanza results
  • Still cheaply priced vis-à-vis peers
  • Previous explorations have shown evidence of both gold and silver deposits
  • Fast capital raise demonstrates interest from institutional players
  • Good logistics and port connectivity enhances value for bigger miners who may want to develop the site

While there are many junior miners out there, when it comes to rich gold and silver deposits, it is hard to beat Mexico’s Sierra Madre region.

In Mexico’s Sinaloa State, junior miner Brigadier Gold (TSX:BRG)  has commenced a fully-funded drill program in the very intriguing Picachos Project.

The exploration project is looking to extract samples from a large and unexplored porphyry target as well as other high-grade veins which have never been tested before. Brigadier Gold is setting out to prove the existence of high-grade, gold-silver veins under the Mexican soil that can be developed via underground mining techniques.

Brigadier Gold’s Picachos Project

The Picachos Project constitutes 3,954 hectares, sited less than 15 miles from the gold and silver discoveries of Vizsla and GR Silver. While the site has over 160 historic mines and workings, Brigadier Gold will be the first company in the project’s history to drill test high priority targets using diamond core drilling.

The geology does look very exciting: Picachos lies between the GR Silver and Vizsla claims, overlapping one of the most contiguous and highest amplitude anomalies for gold, silver and base metals, in the Western Sierra Madre.

The San Agustin mine, which Brigadier is focusing on, represents 665m of underground development, and over three rounds of test mining in 2014 yielded 15.8g/t Au and 63g/t Ag across 2.5 metres. It has veins that are open at depth and have never been tested with diamond core drilling.

Proximity to other successful projects

We also like the project’s proximity between GR Silver Mining and Vizsla Resources, both of which have made significant discoveries.

GR Silver Mining has been exploring the Plomosas project, which is about 15 miles as the crow flies southeast of Picacho. Channel sampling here has uncovered a high-grade polymetallic mineralisation, with a continuous intersection. Part of the assayed length revealed 1313g/t of silver equivalent.

Shares in GR Mining saw a significant run in June from 0.335 to hit a peak of 0.93 at the start of September. Shares in the miner are still trading significantly north of where they were in June as the market awaits further results from Plomosas.

Travel north-west of Plomosas, across Brigadier’s Picachos claim, and you arrive at Vizsla Resources’ Panuco project. Here Vizsla has uncovered some high grade samples at 69m at 6.0m width (1808 g/t silver and 66.8g/t gold) as well as further promising samples at 69.5m at 3.7m width (2889 g/t Ag and 107g/t Au). Shares in Vizsla Resources popped from 0.44 CAD in June to hit peaks at CAD 2.65 and CAD 2.61 in July and August respectively. At CAD 1.45 prices are still well above where they were in June.

Historic exploration of the Picachos Project

In June 1997 Thunderbird Projects completed the first round of exploratory drilling on the site, with an average grade of 81.22g/t Au and 73.6g/t Ag. This was followed by further exploration by MCA which yielded 1850 tons of muck from a shaft about 12m long, 1.5m wide, and 45m deep, sunk at the end of the mine’s main level. Values at the bottom of this shaft were at 185g/t Au.

The third exploration project, initiated by Vane Minerals (2014), looked at three rounds from the south face. The average assay values were 15.8g/t Au and 63 g/t Ag across a width of 2.5m.

Highly experienced team

We also like the fact that renowned mining geologist Michelle Robinson is involved in the project. Robinson assembled the Picachos land package over 10 years ago and is intimately familiar with the intricacies of the asset. Fluent in Spanish and English, she has been heavily involved in the Mexican mining scene specifically for decades. A Qualified Person, she worked for a number of mining enterprises in the 1990s and 2000s, among them Noranda, Cominco (now Teck Resources) and Anglo American’s Vancouver exploration group.

Robinson moved to Mexico in 1998 and domiciled several junior mining explorers in the country, so knows the country and the geology well.

Logistics and capital raise

Brigadier Gold recently renewed its surface access agreement with the local community. The Picachos Project is 4 hours by road from the port of Mazatlan on the Pacific coast of Mexico. There are a further 20km of roads that are internal to the project, allowing for low cost, easy access to high priority drill targets. This would enhance its attraction from the perspective of a possible acquirer of the project.

Brigadier Gold is moving very quickly and managed to fully fund its first phase of drilling activity within 30 days. With just $21m market cap, it raised a further $4.2m and we are expecting the results of initial exploration imminently.

Why we are fans of Sinaloa as a mining region

Sinaloa has a long history of silver mining which goes back to the 1500s and the local port of Mazatlan has played a key role in shipping silver out of Mexico over the last 400+ years. What is more, miners keep discovering more of it. This is testament to the local geology, where restless tectonic activity has created the Sierra mountain ranges as well as rich gold and silver deposits.

Mexico is the biggest producer of silver in the world, according to numbers from the US Geological Survey. In 2019, it produced 6,300 tons of silver, versus 3,800 tons from second-placed China. That’s out of 27,000 tons mined globally last year.

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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