'In my eyes Nicaragua’s a second tier jurisdiction'

Mako Mining expects to begin production within months at San Albino in Nicaragua – one of the world’s highest grade open pit gold projects.

But that is just the start, CEO Akiba Leisman tells BNamericas, with the company targeting additional production from the nearby Las Conchitas deposit and further exploration across its 188km2 concessions in the Central American country.

Looking further ahead, Vancouver-based Mako plans to use cash flow from Albino to fund acquisitions.

While the COVID-19 pandemic has delayed progress at San Albino, Leisman says he has been pleasantly surprised with his experiences in Nicaragua – a jurisdiction he ranks more highly than Mexico.

BNamericas: How have you found Nicaragua as a mining jurisdiction?

Leisman: We’ve been pleasantly surprised with how supportive the ministry of mines, the federal and local governments, and the local communities have been of us restarting the historical San Albino mine.

We have also been pleasantly surprised by the depth of expertise in the country.

That’s partly because B2Gold, with their two mines that they sold to Calibre Mining, really set the stage. They are very professionally run and created this workforce for their mines.

We have some of their former employees that were trained properly, that know how to report up to a Canadian company. It’s not like we were starting from zero.

BNamericas: What about permitting?

Leisman: Our mine received permits to construct and operate a 500t/d facility in September 2017. Just last month we received permits to expand operations to 1,000t/d.

This process to expand our operations was seamless, and it was fast. We got the permits to double processing capacity in less than a year.

In this challenging time with COVID-19, and getting things through customs, bringing in supplies and equipment, they [the government] have gone out of their way to make sure we’re able to stay on our revised timeline for building the mine.

BNamericas: How do you view the potential at San Albino?

Leisman: We have one of the highest grade open pit projects on the planet. San Albino is just the start.

We have 188km2 of continuous land that’s trending northeast-to-southwest, because that’s the trend of the mineralization. We call it the Corona de Oro belt. 

It’s about 23km along strike and 3km wide. We’re getting ready to put out a resource update which will highlight the area where we’re presently mining, the San Albino vein and San Albino project area, but we’re very excited about the future prospects of our land package, especially in two areas.

Las Conchitas, about 2.5km south of San Albino, is an area where we think we’ll have a second resource and second mining area, hopefully within the next two years.

To the north we acquired the Potrerillos concession, that’s on the other side of a river from San Albino but it’s onstrike and with the same mineralization.

Ultimately what we think we have is an orogenic gold camp, where if these veins were subvertical, as they are in Canada or Western Australia or other parts of the world where they can be mined a mile deep or more, people would recognize this very quickly and this would have already been mined as an underground mine.

There would be a very large operation here, but because the veins are tilted on their side, anywhere from 25-40 degrees, it allows us to mine them open pit, but makes it more difficult to mine them underground.

For us, we are only focused on the open pit but there is a lot of potential for underground for someone else, or maybe for us once we hire people that are specialists in that type of mining.

There are mines that are mined like that but you need to have the right ground stability, the right mining method, but for us we say we’ll take the cream at the top and will let the underground ounces be interpreted and valued by someone else further down the line.

Just with what we see at surface, this is a district, and it’s very exciting. We’ll be drilling here for many years.

Right now we’re only running one drill rig, at Las Conchitas, but as soon as the mine is in commercial production, which we think will be April or May 2021, we’ll ramp up to six or seven rigs.

We have operated at that level before and have the ability and staff to process the core from about seven rigs, maybe as many as 10, and we’ll take it up to those levels.

BNamericas: What are the main hurdles to get to production?

Leisman: We have started mining and are over 70% complete on the processing plant and tailing storage facility. We’re expecting to be in a position to start processing material around December and have our first gold pour in January.

We have the ability to go up to 1,000t/d. Most open pits have grades of about 1g/t. We have double-digit grades here.

It isn’t like anything else in the world, and because of that we have to be very careful how we mine it.

We’re going to be mining 2-3 faces at a time. We’re constantly going to be working with 2-3 crews on the same mountain but at 2-3 different places to be able to maintain a constant throughput to get us to 500t/d.

If we wanted to do 1,000t/d just from San Albino it would be difficult to do in a sustainable manner for a long time, because we need more faces.

To get to 1,000t/d we’re going to have to have a resource at Las Conchitas to have another operation where we can do another 2-3 faces.

BNamericas: How much do you expect to produce initially?

Leisman: The first three months we’re going to be processing lower grade ore, from 2-3g/t, to get the operation going, then in month three or four we’ll start processing the high grade.

We expect to be in commercial production in early Q2.  We’re still waiting for our resource update in order to specify expected grades, but a range of 8.0-9.5g/t at 500t/d based on our expected recoveries would equate to 40,000-50,000oz/y once the mine is in commercial production.

BNamericas: How has the COVID-19 pandemic affected you?

Leisman: We have been delayed. We were expecting to have first gold poured in September. We had to push that back to January 2021.

Commercial flights into Nicaragua have been shut down. We recently brought a crew in of our senior operating team, and they had to come in via private charter from Mexico.

They had to have negative COVID-19 tests administered within 72 hours, including the pilots. It’s tough but it’s tough everywhere in the world.

In March and April, people were uncertain about what this disease was all about, we had employees who just wanted to go home. They were scared and hesitant to work around others.

We had a webcast with the employees to explain we’re going to do everything we can to mitigate the virus and that they’re probably safer under our care, and with the resources we have, than if they were unemployed and on their own.

Once I explained it like that they got it. They saw that we were establishing protocols and buying PPE and medicine that was otherwise not available to them.

We have doubled our medical workforce and gained a lot of trust and loyalty from the employees.

We have had employees who have got sick. It’s tricky down here as we also have dengue fever, and about half the people who thought they had COVID-19 actually had dengue, and the other half tested positive for COVID-19.

Luckily, they were mild cases and we were able to quarantine them and provide care, and we never had to stop working and never had a full outbreak.

Since March we’ve only had a handful of people infected, at different times, usually because they were on public transport. They get on these crowded buses, even though we’ve asked them not to do so.

BNamericas: What is your long-term strategy?

Leisman: Everything that we build is eventually for sale. Nicaragua is not on the top of the list of jurisdictions that people are eager to do business in. It should be but it’s not. Canada, Nevada, Western Australia, those are the best of the best. There is a second tier, and I would say Nicaragua is really considered a third tier jurisdiction, but in my eyes it’s a second tier jurisdiction.

It is for me a better place to do business in than Mexico at this point. Definitely safer.

We understand that unless we develop an operation that is running at 1,000t/d and has 10+ years of mine life, then it’s really not going to be on the radar screen for many people to do M&A.

Because of that, if we’re able to generate the sort of cash flow that this mine can generate, we’ll then use that cash to be acquisitive ourselves, to find other operations that could use that cash, which are accretive to our company, and build an even bigger business.

M&A is 100% on our mind. Right now the company is not ready. We’re just getting things going.

BNamericas: What sort of asset would you be looking for?

Leisman: It would be in the Americas and it would be gold.

We like development stage projects with exploration upside. We have a team that can build mines. We’re not scared to build things. We think we are fast and cheap.

It would be 18-24 months from now as a base case before we consider any M&A.