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Golden Tag Resources is on track to develop one of Mexico’s biggest silver resources

Snapshot

The company’s San Diego Project has an Indicated and Inferred resource of more than 115 million ounces of silver and 1.5 billion pounds of zinc

Golden Tag Resources Ltd. -

Quick facts: Golden Tag Resources Ltd.

Price: 0.48 CAD

TSX-V:GOG
Market: TSX-V
Market Cap: $78.96 m
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  • Owns one of Mexico’s largest undeveloped silver assets
  • Billionaire investor Eric Sprott has a 19% equity stake in the company  
  • New management team and board of directors

What Golden Tag Resources does:

Golden Tag Resources Ltd (CVE:GOG) (OTCMKTS:GTAGF) is a mineral resource exploration company that holds a 100% interest in the San Diego Project, consisting of four mining concessions encompassing 91.65 hectares, in Mexico’s Velardeña Mining District.

The Velardeña District hosts several mines that have been producing silver, zinc, lead and gold for the past 100 years.

The Toronto-based company considers San Diego to be one of Mexico’s largest undeveloped silver assets, with an estimated Indicated resource of 31.6 million silver ounces at an average grade of 60 grams per tonne (g/t) and 438 million pounds of zinc, along with an Inferred silver resource of 83.8 million ounces at 62 g/t and 1.2 billion pounds of zinc. The resource estimate, completed in 2013, is based on 59 holes totalling 33,000 metres drilled since 2005.

Golden Tag is focused on four key exploration zones at the San Diego Project: 1849 Target Areas; Fernandez Zone Above 1200 Level; the Arroyo Zone; and the Trovador Zone.

The company has noted that it has several exploration targets ready to be tested that could potentially expand the deposit materially in several key areas, adding that it is fully permitted to resume exploration drilling.

Golden Tag believes the San Diego Project has an additional exploration potential of 70 million to 265 million silver equivalent ounces, based on 20 million to 50 million tonnes grading between 100 and 150 g/t silver equivalent.  

The San Diego project is easily accessible via highway and gravel roads, with power and mining infrastructure nearby.

Golden Tag Resources is led by CEO Greg McKenzie, a former senior investment banker with more than 20 years of experience with firms such as Morgan Stanley and CIBC World Markets. McKenzie previously practised corporate law with a leading Canadian securities and M&A law firm.

As a measure of the company's potential, nearly 19% of Golden Tag’s shares are owned by billionaire resource investor Eric Sprott.

How is it doing:

In November 2020, Golden Tag Resources initiated an exploration program on the San Diego Project, consisting of approximately 4,500m of diamond drilling in 10 to 12 holes with a focus on expanding mineral resources in the Fernandez, 1849, Arroyo and Trovador Zones.

Initial results released in February 2021 from infill sampling on historical diamond drill holes included 175.30 metres of 88.54 g/t silver equivalent in hole SD-11-42 along with 298.02 metres of 101.96 g/t silver equivalent in hole SD-11-40, which resulted in a 10% increase in the reported grade.   

The company noted that four new mineralized zones were identified proximal to the Fernandez Zone, including two shallower zones, and said that three new shallower zones of mineralization were identified above the Fernandez Zone.

Golden Tag said a comprehensive infill sampling program will be implemented on 2,500 to 3,000m of historical diamond drill holes, with the goal of realizing further improvements in geological, mineralization, and grade continuity within the broad mineralized envelope.

It noted that collectively this sampling program has the potential to significantly increase the mineralization envelopes and provide further grade improvements.

On the financial side, Golden Tag closed an oversubscribed non-brokered private placement financing in August 2020, in which the company issued 25 million units at a price of $0.28 per unit for total gross proceeds of C$7.0 million. Of note, Eric Sprott subscribed for 42.8% of the offering. The company currently has approximately C$8.0 million in cash and no debt.

In early November 2020, the company received approval to have its shares trade on the OTCQB Market in the US.  

Inflection points:

  • Additional drill results from the San Diego Project
  • An updated resource estimate
  • Improved project economics from a rising silver price

What the boss says:

Commenting on the company’s recently-released infill sampling results on the San Diego Project, Golden Tag Resources CEO Greg McKenzie said in a statement: “We are pleased to see the current drill program is advancing with strong productivity, despite challenges associated with COVID. Infill sampling and assays of previously unsampled areas have generated insight, and allow us to significantly expand mineralized areas, improve continuity and has demonstrated higher grades.”  

He added: “As our exploration program continues over the coming months, we look forward to unlocking further value on the San Diego Project.”

Contact Sean at sean@proactiveinvestors.com

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