Southern Silver Exploration Corp. (TSX.V:SSV) (“Southern”) reports that Kirkham Geosystems Ltd. (“KGL”) has completed an update of its independent Mineral Resource Estimate on the Cerro Las Minitas (“CLM”) project in Durango State, Mexico, operated on a joint venture basis by SSV(40%) as operator and Electrum Global Holdings LP(60%).
This Mineral Resource Estimate showcases the continuity of the mineralization and continued expansion of the Cerro Las Minitas project and updates the previously reported March 2016 estimate. The new Resource Estimate incorporates additional data from drilling conducted in 2016 and 2017 that has successfully delineated a major new deposit on the project and significantly increased the resource base in both the Indicated and Inferred Resource categories as well as improving the overall grade of the resource, most significantly in the Indicated category.
Resource Model Highlights
In comparison to the 2016 Mineral Resource estimate, the 2017 update, at a 175g/t AgEq cut-off, features:
- a 318% increase in Indicated Mineral resources to
- 10.1Mt averaging 102g/t Ag, 0.1g/t Au, 0.15% Cu, 1.4% Pb and 3.6% Zn (356g/t AgEq, 7.6% ZnEq);
- a 18% increase in Inferred Mineral resources to
- 8.7Mt averaging 74g/t Ag, 0.04g/t Au, 0.15% Cu, 0.7% Pb and 4.5% Zn (332g/t AgEq, 7.0% ZnEq);
- the utilization of a higher cut-off (175g/t AgEq) to reflect potential mining costs and metal recoveries;
- an increase in the average grade, as denoted in AgEq, of the Indicated Resources; and
- the newly delineated Skarn Front zone which now forms the single largest mineral deposit in the Cerro Las Minitas Project area.
Table 1: Base-case Mineral Resource Estimate for CLM Project Utilizing a 175g/t AgEq cut-off value:
Notes: The 175g/t AgEq cut-off value was calculated using average long-term prices of $16/oz. silver, $1,200/oz. gold, $2.75/lb. copper, $1.0/lb. lead and $1.10/lb. zinc and metal recoveries of 82% silver, 86% lead, 80% zinc and 80% copper were used to define the cut-off grades. The base case cut-off grade assumed $75/tonne operating and sustaining costs. All prices are stated in $USD.
Table2: Mineral Resource Cut-off Sensitivities at the CLM Project, Durango State, Mexico
- The current Resource Estimate was prepared by Garth Kirkham, P.Geo., of Kirkham Geosystems Ltd.
- All mineral resources have been estimated in accordance with Canadian Institute of Mining and Metallurgy and Petroleum (“CIM”) definitions, as required under National Instrument 43-101 (“NI43-101”).
- Mineral resources were constrained using mainly geological constraints and approximate 10g/t AgEq grade domains.
- AgEq cut-off values were calculated using average long-term prices of $16/oz silver, $1,200/oz gold, $2.75/lb Copper, $1.00/lb lead and $1.10/lb zinc and metal recoveries of 82% silver, 86% lead, 80% copper and 80% zinc. Base case cut-off grade assumed $75/tonne operating and sustaining costs. All prices are stated in $USD.
- Contained metal calculations assume 100% recoveries.
- Mineral resources are not mineral reserves until they have demonstrated economic viability. Mineral resource estimates do not account for a resource’s mineability, selectivity, mining loss, or dilution. All figures are rounded to reflect the relative accuracy of the estimate and therefore numbers may not appear to add precisely.
Four separate mineral deposits were modelled in the resource update with the Blind, the El Sol and the Las Victorias deposits forming sets of sub-parallel, northwest-trending and steeply dipping mineralized zones which extend for over 1000 metres strike and up to 600 metres depth. The fourth deposit known as the Skarn Front, forms beneath the Blind, El Sol and Las Victorias deposits and is localized on the outer edge of the skarn alteration zone surrounding the Central Monzonite Intrusion. Thick zones of higher-grade mineralization cluster at the projected intersections of the Blind and El Sol zones and the Skarn Front, the outline of which forms an extensive “higher-grade” target area which rakes for over 800 metres diagonally and ranges from 300 to 600 metres in width. Significantly, this target region and other targets along the Skarn Front zone have been only partially drill tested to date. More detailed drilling is required, particularly to delineate the extent of the higher-grade lenses. Analyses of the block model has identified several new target areas for drill testing in 2018 as well as the previously described extensions of the Skarn Front in the Las Victorias and North Skarn Target areas (see NR-18-17, November 6th, 2017).
KGL suggests that an underground mining scenario is appropriate for the project at this stage and has recommended a 175g/t AgEq cut-off value for the base-case resource estimate. Also listed are grade-tonnage sensitivities at 150g/t, 175g/t, 250g/t, and 350g/t AgEq cut-off values (see Table 2 above) which demonstrate both a significant increase in contained precious- and base-metals at lower cut-off values and good tonnage retention, at increasing overall grade, at incrementally higher cut-off values. A NI 43-101 Technical Report will be posted on SEDAR within 45 days.
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Inferred Resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be classified as Mineral Reserves. There is no assurance that any part of the Inferred Resource will be converted to Measured or Indicated Mineral Resources or ultimately converted to a Mineral Reserve.
President, Lawrence Page Q.C. stated “Since acquisition in September 2010, CLM continues to develop Mineral Resources with great potential to become a significant economic deposit. Exploration since 2016 has resulted in a 318 percent increase in Indicated Resources and an 18 percent increase in Inferred Resources, largely through the delineation of the new Skarn Front deposit which significantly remains open in several directions. We are confident that additional exploratory drilling during 2018 will continue adding great value to the present Resource”.
“Metal prices continue to enhance the value of the project with silver, lead and zinc; all industrial metals, increasing in demand as evidenced by their respective market prices with silver having a duality in value as a currency. The property is not burdened with royalties which enhances the prospects of mining and processing. Aggregate acquisition and exploration costs of $15.1 million, equate to a “finding” cost of approximately $0.07 per silver equivalent ounce with continued upside to add further resources.”
“During the past year, we have added at nominal cost 19,500 hectares of prospective ground to our property base, and have developed drill targets for exploration to begin here within the next few months.”
“ ‘Location, location, location’ must be strongly emphasized when assessing the value of a resource. CLM is located in the middle of the Mexican silver district, in a “miner-friendly” jurisdiction surrounded by producing mines. Concurrently with the continued development of the resource, we continue to obtain independent reports on metallurgy and mining parameters to de-risk the project and increase value. Our shareholders will enjoy the continuing development of this Resource.”
2018 Exploration Program
Compilation and analysis of the 2016-17 results continues toward further drill targeting for the 2018 exploration program with Southern as the operator.
Exploration in 2018 will continue to define the overall size of the project and include:
- testing the immediate offsets of the Mineral Resource within the primary target area of the Skarn Front;
- off-set drilling in the Las Victorias and North Skarn extensions;
- continued development of precious-metal-enriched epithermal surface targets (similar to the nearby Avino Mine) on the recently acquired CLM West claims (Biznagas, Los Lenchos and Cerro del Oro); and
- RC drill testing of the newly defined CLM West targets in Q2 2018.
The overall objective of the 2018-19 exploration program is to continue to increase the existing resource base and to identify and drill test new epithermal vein systems within the larger claim package.
CLM Resource Parameters
- The estimate was carried out using a block model constrained by 3D wireframes of the individual mineralized zones. The block model is comprised of an array of blocks measuring 10m x 2m x 10m, with grades for Ag, Au, Cu, Pb and Zn interpolated using Inverse Distance to the Third Power (ID3) weighting. Silver and zinc equivalent values were subsequently calculated from the interpolated block grades.
- The interpolation was carried out in three passes using progressively larger search radii to a maximum of 150m x 150m x 25m. For all passes, the interpolation was restricted to a minimum of 1 and a maximum of 12 composites, with a maximum of 4 composites from any one drill hole (i.e. a minimum of two drill holes required for +4 composites).
- Bulk densities were based on a total of 390 individual measurements taken by Southern field personnel from 21 mineralized intervals ranging from 1.7m to 30.4m in thickness. Density values ranged from 2.13 t/m3 to 5.27 t/m3. However, an average value of 2.85 t/m3 was used as it was thought to be representative of the densities within the Blind, El Sol, Las Victorias and Skarn Front zones.
- Silver values have been capped in order to remove the effects potential overestimation due to statistical outliers. The threshold chosen was 700 g/t silver. In addition, outlier values for the co-product metals were capped at the threshold levels as follows; 1.5 g/t gold, 1.4% copper, 5% lead and 19% zinc.
- The mineralized zones were initially defined by Southern personnel and then validated and refined by KGL. The mineralized wire frames were defined using a combination of geological constraints, grade threshold of an approximately 10 g/t AgEq grade cut-off and no minimum thickness.
- For all zones, blocks are classified as Inferred if they are included within 100m of at least one drill hole intercept. Blocks within 65m of the nearest intercept, and estimated by at least two drill holes were classified as Indicated. However, an interpreted boundary is the final determination of indicated resources in order to remove outlier blocks and the “spotted dog” effect.
About Southern Silver Exploration Corp.
Southern Silver Exploration Corp. is a precious metal exploration and development company with a focus on the discovery of world-class mineral deposits in north-central Mexico and the southern USA. Our specific emphasis is the Cerro Las Minitas silver-lead-zinc project located in the heart of Mexico’s Faja de Plata, which hosts multiple world-class mineral deposits such as Penasquito, San Martin, Naica, Los Gatos and Pitarrilla. We have assembled a team of highly experienced technical, operational and transactional professionals to support our exploration efforts in developing, along with our partner, Electrum Global Holdings LP, the Cerro Las Minitas project into a premier, high-grade, silver-lead-zinc mine.
The Company engages in the acquisition, exploration and development either directly or through joint-venture relationships in mineral properties in major jurisdictions. Our property portfolio also includes the Oro porphyry copper-gold project located in southern New Mexico, USA. The Oro property consists of patented land, State leases and BLM located mineral claims which cover a highly prospective quartz-sericite-pyrite alteration zone, interpreted to overlie an unexposed porphyry center and distal sediment-hosted, oxide-gold target.
Robert Macdonald, MSc., P.Geo., is a Qualified Person as defined by National Instrument 43-101 and he is responsible for the supervision of the exploration on the Cerro Las Minitas Project and for the preparation and review of the technical results in this disclosure. Garth Kirkham, P.Geo., and Principal of Kirkham Geosystems Limited is an Independent Qualified Person responsible for the preparation and disclosure of the Mineral Resource Estimate.
On behalf of the Board of Directors
Lawrence Page, Q.C.
President & Director, 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. 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. Factors that could cause actual results to differ materially from those in forward looking statements include 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.