TORONTO (miningweekly.com) – Global Minerals has faced several critical tasks at its Strieborná silver/copper project near Roznava, Slovakia, over the past 12 months, including dewatering the property to a feasible depth, moving forward with the rehabilitation of the site’s old Mária mine and pushing ahead with environmental planning and the on-going formulation of a preliminary economic assessment. 

The next 12 months were likely to be equally busy, with more milestones to be passed as the project made ready for the final furlong into production.

“The project is essentially a mine reactivation,” Global Minerals CEO and director William Pincus told Mining Weekly Online. “When they [the previous state-owned operators] shut the operation in the mid-1990s there was a mined-out area but also a new deposit – a parallel vein – that was prepped for mining. They’d even taken out 50 000 t through what you might characterise as test mining.”

“But a combination of low silver prices and Slovakia’s change to a market economy made the mine unfeasible. It was shut down and remained that way until Global Minerals acquired the property in 2007,” he added.

Effective 2008, Strieborná had an estimated measured and indicated resource of 1.93-million tons grading 232 g/t and 1.1% copper. Global Minerals also inherited a property with a comprehensive series of well-constructed tunnels, although most were flooded. Unsurprisingly, one of the company’s priorities was to launch a dewatering and water-treatment programme.

“I joined Global Minerals in 2010,” Pincus said. “At this stage, dewatering was considered a priority … The plant cost about $1-million and we started to seriously pump around January 2012. We’ve now dewatered down to about 280 m below the surface. There’s more water at the bottom of the mine, but these are areas we won’t reach until after five, six or seven years of mining.”

“Additionally, there was an old incline shaft under the water. We rehabilitated the shaft and the hoisting mechanism as we dewatered. Now we have a working shaft that takes us down to what we call Level 6, or 180 m below surface,” he said. “The shaft has also helped us fulfil certain safety requirements. For example, we’ve now established a secondary escape way.”

Global Minerals had started an underground drilling campaign, with the latest results released on January 20. Highlights included hole STR-06-12-007, which returned 297.1 g/t silver and 1.21% copper from 142.53 m to 149.65 m.

“The latest drilling results were pretty much what we had anticipated,” Pincus said. “The work is essentially in-fill drilling, so we’re increasing the resource certainty from inferred to measured and indicated. Really what you are seeing illustrated is a high-grade deposit: 200, 300 and 400 grams a ton of silver and a percentage or two of copper.”

“Alongside this, we’ve been working on the preliminary economic assessment [PEA] and it’s fairly well advanced. We’re also conducting a more detailed engineering appraisal that will be sufficient for the independent economic assessment. Our plan is to publish this concurrent with the PEA,” he added.

Work geared towards environmental permitting was also progressing. “We’re preparing our [environmental] permit application and hope to submit it during the first half of 2013. If all goes well, there’ll be a six-month [evaluation] process that will be followed by permit approval,” he said.

Pincus outlined several fiscal avenues the company might take. “Juniors are facing strong headwinds right now; the equity markets are terrible. So we have to be realistic and nobody wants another equity round. Everyone worries about dilution,” he said. “We’re talking to a number of groups about various options and interesting ideas, such as project loans, metal-streaming deals, metal-affiliated debt financing or convertible debt.”

On capital expenditure (capex), he was bullish. “Our detailed capital cost estimate will be unveiled in our PEA, but I think I can safely say – unless I’m totally surprised – that our capex will be well below $100-million, possibly even half of that. We’ll see what the number eventually becomes, but I know we’re looking at a relatively modest capex, which gives us a lot of flexibility.”

Strieborná was well positioned in terms of wider infrastructure and Global Minerals had sought to take full advantage of this. “We’ve just acquired surface land for tailings and a plant site that is adjacent to a road on one side and a rail line on the other. Pincus said. “We [also] bought an existing tailings facility after conducting the necessary studies, such as stability and environmental analysis.”

The purchase of the facility was formally announced on March 12. Throughput was estimated at 750 t/d, although Global Minerals’ plan to extend the tailings dyke would allow for an increase in capacity. However, several permits were still required to reinstate its use and additional work was needed to secure them. “The toe of the dyke needs to be supported and we’ll install geotextile to isolate the old tailings from the new tailings. The old tailings will then be dry stacked to prevent dusting and any other issues. Plus, we’ll recycle all of the water we use,” Pincus said.

The local workforce and its knowledge of mining was an important advantage for the company. “We’re in an old mining district, with mining undertaken in the region until very recently. We have local underground drillers or mining contractors available and there’s also a nearby mining university, which trains engineers, geologists and metallurgists,” Pincus said.

Relations with local people and the regional government were robust. “We’ve signed a collaborative agreement with the local municipality, while the regulatory community has been very reasonable … We’ve also held two public meetings to let local people know what we’re doing and the most common question by far is ‘where can I sign up?’”

“The best-case scenario over the next couple of years is for us to enter production. The first landmark is the PEA, which has the mine development scenario built into it. If we can then secure the permitting and financing, mine construction and development can start during 2014. Hopefully, it’s not too long before we’re making metal,” he said.