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 Southern(40%) as operator and Electrum Global Holdings LP(60%).
Resource Model Highlights
Compared to the 2018 Mineral Resource estimate, the 2019 update, at a 175g/t AgEq cut-off, features:
A nominal 0.97Mt increase in Indicated Mineral resources to 11.1Mt averaging 105g/t Ag, 0.1g/t Au, 0.16% Cu, 1.2% Pb and 3.7% Zn (375g/t AgEq; 8.2% ZnEq), containing:
- 37.5 million ounces of silver;
- 35 thousand ounces of gold;
- 40 million pounds of copper,
- 303 million pounds of lead; and
- 897 million pounds of zinc,
This equates to 134 million ounces silver equivalent or 2.0 billion pounds zinc equivalent.
A more significant 4.2Mt increase in Inferred Mineral resources to 12.8Mt averaging 111g/t Ag, 0.07g/t Au, 0.27% Cu, 0.9% Pb and 2.8% Zn (334g/t AgEq; 7.2% ZnEq) containing:
- 45.7 million ounces of silver;
- 31 thousand ounces of gold;
- 76 million pounds of copper,
- 253 million pounds of lead; and
- 796 million pounds of zinc.
This equates to 138 million ounces silver equivalent or 2.0 billion pounds zinc equivalent.
This new Mineral Resource Estimate illustrates the continuity of the mineralization and continued expansion of the mineral deposit in the Cerro Las Minitas project and updates the previously reported January 2018 estimate. The new Resource Estimate incorporates additional data from a very successful drilling program of 10,157 metres in 2018-19, updated metal recoveries and pricing, application of a more rigorous specific gravity (“SG”) measurement protocol and further refinement of the resource wire frames.
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 $16.6/oz. silver, $1,275/oz. gold, $2.75/lb. copper, $1.0/lb. lead and $1.25/lb. zinc. Metal recoveries for the Blind, El Sol and Las Victorias deposits of 91% silver, 92% lead, 82% zinc and 80% copper and for the Skarn Front deposit of 85% silver, 89% lead, 92% zinc and 84% copper were used to define the cut-off grades. The base case cut-off grade assumed $75/tonne operating, smelting and sustaining costs. All prices are stated in $USD.
Table2: Mineral Resource Cut-off Sensitivities for CLM Project
1) The current Resource Estimate was prepared by Garth Kirkham, P.Geo., of Kirkham Geosystems Ltd.
2) 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”).
3) Mineral resources were constrained using mainly geological constraints and approximate 10g/t AgEq grade domains.
4) AgEq cut-off values were calculated using average long-term prices of $16.6/oz. silver, $1,275/oz. gold, $2.75/lb. copper, $1.0/lb. lead and $1.25/lb. zinc. Metal recoveries for the Blind, El Sol and Las Victorias deposits of 91% silver, 25% gold, 92% lead, 82% zinc and 80% copper and for the Skarn Front deposit of 85% silver, 18% gold, 89% lead, 92% zinc and 84% copper were used to define the cut-off grades. Base case cut-off grade assumed $75/tonne operating smelting and sustaining costs. All prices are stated in $USD.
5) Silver Equivalents were calculated from the interpolated block values using relative recoveries and prices between the component metals and silver to determine a final AgEq value. The same methodology was used to calculate the ZnEq value.
6) 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.
7) 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 are traced for over 1300 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 and has been drilled along an approximate 1100 metre strike length and to depths of up to 1000 metres.
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 and grade retention 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.
2018-19 Exploration Review:
Drilling in the 2018-19 Exploration season, as reflected in the updated Mineral Resource estimate, successfully:
- filled grade gaps in the earlier block model and allowed the more effective projection of higher grade mineralization throughout the deposits;
- built continuity of several higher grade zones within the central part of the Skarn Front deposit establishing several high-grade lenses of mineralization within 400 metres of surface;
- established greater continuity between the Skarn Front deposit and footwall mineralization (lateral to and equivalent to the Skarn Front style mineralization) in the Las Victorias zone;
- extended and built continuity of higher-grade, shallow mineralization (<400 metres) in both the Las Victorias deposit and North Skarn zone;
- added 163Kt Indicated Resource and 216Kt Inferred Resource at grades >380g/t AgEq in the Las Victorias deposit;
- added 2.1Mt Indicated Resource and 2.7Mt Inferred Resource to the Skarn Front deposit at similar or higher average AgEq grade;
- provided better definition of three higher grade sub-zones within the El Sol deposit; and
- identified anomalous silver and pathfinder mineralization in the CLM West Epithermal 19,500 ha. claim group located approximately 10-15km to the southwest of the established mineral resources on the CLM property
The Mineral Resources at Cerro Las Minitas have increased substantially since the initial resource estimate in 2016 with 133 drill holes for 59,000 metres, US$18.5M spent to date and with a discovery cost of: $0.07/oz AgEq; $0.005/lb ZnEq.
The project continues to provide a strong high-grade resource growth projection.
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 2018 has resulted in a 9.5% percent increase in Indicated Resources and a 48% percent increase in Inferred Resources on a tonnage basis. A modest expenditure in 2018 of $2 million in drilling and exploration costs at the area of the Cerro has added great value to the existing resource and we are confident that additional exploratory drilling during 2019-20 will continue adding great incremental value to the Project”.
“The property is not burdened with royalties which enhances the financial fundamentals of mining and processing. Aggregate acquisition and exploration costs of $18.5 million, equate to a “finding” cost of less than $0.07 per silver equivalent ounce with continued upside to add further resources.”
“Exploration of portions of our 19,500 hectares at CLM West has resulted in a “discovery hole” highlighted by a 3 metre intercept grading 168g/t Ag from a strongly oxidized and broken zone located in the upper part of drill hole 18CLMW-007.”
“Concurrently with the continued development of the resource, we continue to obtain independent assessments on metallurgy and mining parameters to de-risk the project and further increase value”.
2019-20 Work Program
Compilation and analysis of the 2018-19 results continues toward further drill targeting for the 2019-20 exploration program with Southern as the operator.
The overall objective of the 2019-20 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.
Mineral Resource Estimate 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 2 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 1,103 individual measurements taken by Southern field personnel. Density values ranged from 2.41 t/m3 to 5.33 t/m3. Density values were interpolated on a block-by-block basis using an inverse distance to the second power. An average value of 2.85 t/m3 was assigned to blocks that were not interpolated.
- Silver composite values have been capped in order to remove the effects of 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 of 1.5 g/t gold, 1.4% copper, 5% lead and 19% zinc.
- The mineralized zones were initially defined by Southern personnel and subsequently validated and refined by KGL. The mineralized wire frames were defined using a combination of geological constraints, grade boundaries and no minimum thickness. Intervals that were not sampled were assigned a zero grade.
- For all zones, blocks are classified as Inferred if they are included within 100m of at least one drill hole intercept. Blocks within 50m 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.