Oro property, New Mexico: This consolidated land package consists of patented claims, located claims and State leases. Southern Silver Exploration Corp. (“Southern Silver”) has amended the option agreement for purchase of a 100% interest in the located claims by extending the last payment of US$150,000 until August 28, 2013 at which time it will own a 100% interest in the claims; consideration for the extension agreement is the issuance of 200,000 common shares to the optionors. Additionally, Southern Silver has paid the final instalment of US$75,000 of the US$350,000 purchase price for the patented mineral claims which form the heart of the consolidated claim block and now owns a 100% unburdened interest in such patented claims. The claims are the location of historic mines known as the American Group which were operated between 1881 to 1961 producing silver, lead and zinc.
In other news, Southern Silver has entered into a finder’s fee agreement with Adrian Robles for his role in a previously announced transaction between Southern Silver and Freeport McMoRan Exploration Corporation (“Freeport”) with respect to the Cerro Las Minitas property (the “Property”) in Durango, Mexico (see news release of October 23, 2012). Pursuant to the finder’s fee agreement, Southern Silver will issue Mr. Robles: (i) 500,000 common shares; (ii) 250,000 non-transferable share purchase warrants, with each warrant exercisable to purchase one common share at a price of $0.30 for a period of two years from the date on which Freeport exercises its option to acquire a 51% indirect interest in the Property; and (iii) 250,000 non-transferable share purchase warrants, with each warrant exercisable to purchase one common share at a price of $0.40 for a period of two years from the date on which Freeport gives notice of its election to acquire an additional 19% indirect interest in the Property (for a total of a 70% interest).
The amendment agreement and the finder’s fee agreement are subject to TSX Venture Exchange acceptance.
About the Oro Property
The Oro project comprises a contiguous block of federal, state and private land totaling 17.2 square kilometres in the historic Eureka mining district in Grant County, New Mexico and is located approximately 40 kilometres southwest of the Silver City porphyry copper district. The property consists of 157 unpatented lode claims and a relatively large group of private mineral and surface patents and two parcels of New Mexico State Land which are critical to the further evaluation of the Oro property and which had previously hampered exploration due to fragmented land holdings in the district.
Mining primarily occurred in the Eureka District during the late 19th and early 20th centuries, but a small amount of production was reported into the 1950’s. Production has been estimated at 2.9 million lbs Pb, 1.7 million lbs Zn, 500,000 lbs Cu, 450,000 ounces Ag, and 5,000 ounces Au. In addition to widespread precious- and base-metal mineralization, favorable features of the Oro property include: prospective carbonate host rocks, low- and high-angle faults, a possible ‘cap rock’, and multiple Laramide or Tertiary intrusions with well-zoned, prograde and retrograde alteration haloes.
Southern Silver has completed nine drill holes totaling a 3,202 metre diamond drill program on the project. Potential for bulk-tonnage intrusion-related gold, polymetallic replacement (CRD)/skarn deposits, and copper-gold porphyries remains high with drilling having encountered strongly altered intrusive and sedimentary rocks, with anomalous metals, reflecting the large size of this mineral system. Mapping and sampling peripheral to the main altered area at the property has identified the shallow Stock Pond disseminated gold target. Permits have been received for additional drill testing of up to 14 holes which will expedite future exploration on the property.
About Southern Silver Exploration Corp.
Southern Silver Exploration Corp. is a precious and base metal exploration and development company and a member of the Manex Resource Group; a private company comprised of an exceptional multi-disciplinary team of professionals with specific expertise in all areas of exploration, development, corporate finance and public company administration.
The company’s growth strategy is to acquire, explore and develop either directly or through joint venture relationships high-quality mineral properties in progressive jurisdictions within North America.
Southern Silver’s silver-lead-zinc Cerro Las Minitas project located in Durango, Mexico is currently under option to Freeport-McMoRan Exploration Corporation which can earn a 70% interest in the project by making staged purchase payments and funding exploration and development expenditures of $25 million on the project over a ten year period. Southern Silver is currently advancing the porphyry copper-molybdenum Dragoon project in Arizona and the gold-silver-copper Oro project in New Mexico.
Robert Macdonald (P.Geo) is a Qualified Person as defined by National Instrument 43-101 and has reviewed and approved the technical contents of this release.
On behalf of the Board of Directors
Lawrence Page, Q.C.
President, Southern Silver Exploration Corp.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. These statements are based on a number of assumptions, including, but not limited to, assumptions regarding general economic conditions, interest rates, commodity markets, regulatory and governmental approvals for the company’s projects, and the availability of financing for the company’s development projects on reasonable terms. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, the timing and receipt of government and regulatory approvals, and continued availability of capital and financing and general economic, market or business conditions. Southern Silver Exploration Corp. does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.