Hercules Silver Corp released the final results from the 2023 drilling on February 28, 2024 which the market liked for a couple days because it had fancy silver grades but then became disgruntled when it learned that drilling would not resume until May or later because of ground conditions. The stock has since recovered as the market began to appreciate that the meat in the final results news release was not the high grade silver-lead-zinc mineralization beneath the Hercules Adit near the contact between the "upper plate" rhyolite that hosts the silver-lead-zinc veins and the "lower plate" andesites that host the copper mineralization, but rather the geological discussion about a reinterpretation of the fault history of the area, much of which has been obscured by a thin veneer of much younger flood basalts.
An IP survey done in 2022 had revealed a substantial 1 km long IP chargeability anomaly beneath the known Hercules silver mineralization into which 400 hundred holes have been pumped since 1965, including some by Anne Mark's Anglo-Bomarc during the bull market of 1978-81. Hole 23-05 delivered in October 2023 confirmed a substantial copper porphyry system beneath the silver zones with high enough grades to support underground mining. This attracted a $23 million financing from Barrick Gold at a premium to the market (Hercules currently has $27 million working capital). But the followup holes drilled laterally and to the southeast of the IP anomaly had lower copper grades, and when released at the start of 2024 caused the stock to tank, enabling me to add Hercules Silver Corp (soon to be renamed Hercules Metals Corp) to the 2024 Favorites Collection. The company has since expanded the IP survey and stated that its footprint now extends several kilometres, but it has not published graphics for the new survey.
With the help of Barrick Chris Paul's team has done a lot scientific geology such as age dating and structural analysis, which has led to two important conclusions alluded to in the recent press release. One is that this porphyry system underwent multiple mineralizing phases, which is important for building big and rich deposits because successive fluid pulses remobilize mineralization from earlier phases and redeposit it in greater concentrations. The other is that the rhyolite "plate" that hosts the high grade silver was thrust from the northwest in a southeast direction over the andeslite "plate" that hosts the copper mineralization. This sort of high grade silver-lead-zinc mineralization one could expect at the peripheries of a porphyry system, but there is no zonation continuity between the rhyolite silver host and the underlying andesite copper host. The silver mineralization has been decapitated from the intrusive center that created it. Hercules had marched the drills along the length of the IP anomaly which turns out to have been the wrong direction. The proper direction appears to be in the northwest direction under cover rocks where no work has previously been done. Although Chris Paul would not spell out details, reading between the lines the IP anomaly extends beyond the Hercules Adit a couple kilometers.
So why the secrecy? The realization seems to have emerged among majors like Rio Tinto and Barrick that a 200 km trend of very fertile copper porphyry intrusions is located in western Idaho largely hidden by younger basalt cover rocks. Hercules has only a 2 km area of interest surrounding the existing property, beyond which Barrick is free to stake whatever it wants. And while Barrick may have seen the new IP survey data and perhaps even helped with the interpretation of the implications, there is no point in sharing those insights with other copper producers such as BHP, Rio Tinto and Freeport. Idaho, like the rest of the United State still requires old fashioned post staking so this is expensive and time consuming, plus those areas under state jurisdiction have different rules than BLM land. There is an old-fashioned copper focused staking frenzy unfolding in America!
Unlike in Arizona where major copper discoveries will be deep blind ones like Bell Copper Corp is chasing at Perseverance and Big Sandy in the hope of finding another Resolution scale deposit, these targets in Idaho, while likely still requiring underground mineable grades above 0.6% Cu, will be easier to discover and delineate if this trend hypothesis proves correct. The Hercules story is important because the big picture concept is that old mineralized systems which are typically dismissed as dead horse recycling plays can be evidence of something much bigger going on beneath the surface. All it takes is a fresh geological perspective, a willingness to think outside the box, and engage in extra data gathering that includes drilling geological scout holes. This is something the lifestyle juniors cannot accomplish, and when the resource juniors are pressed into service as the new heroes which will secure new metal supply in secure destinations, the lifestyle juniors will be left stranded at the dock as the serious boats put out to sea in search of whales. |
