In a basin high above Ouray’s bustling tourist shops and hot springs pools, one of the precious metals that birthed this town and fired up its early boomtown days, is readying for a comeback. The first major silver mine in the San Juan Mountains in at least 80 years is on course to be in production next spring.
Aurcana Silver Corp., a Vancouver, British Columbia, company that owns Ouray Silver Mines Inc., is deep into pre-production work at the Revenue-Virginius Mine, one of the largest and oldest silver mines in the San Juan Mountains. There are no known mines with richer silver than the Revenue-Virginius, the company says.
“I think this is tremendously significant,” said Stan Dempsey, president of the Colorado Mining Association. “We’re very pleased this company has been able to successfully reopen this mine.”
The Revenue-Virginius has stumbled through many modern-day false starts as different players tried to bring it back into production. But mine watchers, like Dempsey, and those involved in the current effort to revive the Revenue-Virginius, say they think this attempt is on track to be successful. They cite a number of factors, including a bull market for silver, a new infusion of investor cash and a plan to go back to the mine’s roots using an extraction technique that was successful in the earliest days of the Revenue-Virginius.
Brian Briggs, the CEO of Ouray Silver Mines, COO of Aurcana and a sixth-generation Ouray mining professional, also attributes the mine’s anticipated success to diligent background work..
“Study,” he said. “We have done lots and lots of study.”
Briggs said in preparation for reopening the Revenue-Virginius, he delved into 42 failed mining operations around North America to determine what went wrong. He found many mine owners tried to go into production after completing only preliminary mining assessments. Aurcana has gone well beyond that, he said, by taking the next step and completing a pre-feasibility study with test drilling and metallurgy studies. Aurcana then took the ultimate step of doing a costly, full-blown feasibility study with advanced geology work and equipment tests.
Briggs found failed mines also suffered from a lack of financing and from being beholden to “predatory” lenders. He said Aurcana doesn’t have those problems. It needed $36 million to go into production and has raised more than $40 million from investors. A portion of that — a $28-million infusion of investor cash — was announced last week.