Southern Silver Exploration Corp. (“Southern Silver”) (SSV: TSX.V) announces that it has closed the first tranche of its previously reported non-brokered private placement by issuing 14,151,706 units at a price of $0.17 per unit for gross proceeds of $2,405,790. Each unit consists of one common share and one share purchase warrant exercisable to purchase one additional common share for a period of two years at an exercise price of $0.22 per share.
Securities issued pursuant to this tranche of the private placement, including common shares, share purchase warrants and finder’s warrants issued as finder’s fees, carry a legend restricting trading of the securities until November 21, 2011. The private placement and finder’s fees are subject to regulatory approval.
Net proceeds from the Offering will be utilized for exploration and property maintenance expenses incurred on the Cerro Las Minitas and Minas de Ameca projects in Mexico and the Oro project in the USA.
Specifically, the Company intends to immediately expand its current exploration program on its Cerro Las Minitas project in Mexico after initial results returned high-grade silver and polymetallic mineralization from four of ten core holes completed as part of the Phase I exploration program, including bonanza grade mineralization from a 1.8 metre interval averaging 1400g/t Ag, 19.7% Pb and 14.5% Zn within a 3.3 metre interval averaging 818g/t Ag, 12.9% Pb and 10.9% Zn in drill hole 11CLM-008 (see NR-08-11).
The positive results to date have prompted an expansion of the project into a second phase program of 25 to 30 diamond drill holes totaling 10,000 metres for which crews have now mobilized. This new drilling will target specific occurrences located within the area of historic mining and several additional targets derived from the recently completed surface IP geophysical program including extensions of this newly discovered high-grade zone in 11CLM-008.
Phase I drilling on the property by Southern Silver tested widely-spaced targets, each of which with the potential to develop significant high-grade mineral inventories. Surface work on other regional targets continues.
A summary of the hole locations and significant results from the Phase I drilling are presented in Figure 1 and Table 1.
Figure 1: Plan view of the area of historic mining at the Cerro Las Minitas Project showing the distribution of current, historic and planned drill holes. Gravel covered geophysical targets, outlined in red, highlight the exploration potential of the project.
About the Cerro Las Minitas property
The Cerro Las Minitas property comprises 17 concessions which total 10,980 hectares and an approximate 25 kilometre lineal strike length. The property is located about 70 kilometres to the northeast of the city of Durango in Durango State, Mexico, and is accessed easily by road.
Mining has been conducted on the property since colonial times and has identified several types of silver-, lead- and zinc-enriched massive-sulphide pipes, veins and carbonate-replacement deposits (CRDs), as well as mineralized skarns at the margins of a large intrusive body. The Santa Eulalia replacement deposit (45Mt of 310g/t Ag, 7.1% Zn and 8.2% Pb) and the skarn deposit of San Martin (60Mt of 118g/t silver, 0.9% copper and 3.9% zinc) are examples of two major Mexican mines occurring in similar geological environments(1).
Limited historical drilling on the project by Noranda (not independently verified by Southern Silver) returned numerous intervals of higher grade silver and base metals, including: a 11.45 metre interval (down hole) grading 123g/t silver, 1.55% lead and 7.79% zinc from drill hole NGV-00-02 and a 1.41 metre interval (down hole) grading 529g/t silver, 6.99% lead and 1.27% zinc from drill hole NGV-00-06.
The mineralized zones at Cerro Las Minitas have been exploited to depths of 300 metres and over widths of 60 metres.
Table 1: Summary of Phase I Drilling Assays from the Cerro Las Minitas Project
About Southern Silver Exploration Corp.
Southern Silver Exploration Corp. is a precious/base metal exploration 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 high-quality properties in progressive jurisdictions within North America. Its current projects include the silver-lead-zinc Cerro Las Mintas project and the copper-gold-silver Minas de Ameca in Mexico, the porphyry copper-molybdenum Dragoon project in Arizona and the gold-silver Oro project in New Mexico.
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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.
(1) Southern Silver advises that tonnage and grade of adjacent properties or those used for comparative purposes may not reflect the ultimate potential of the Cerro Las Minitas project
On behalf of the Board of Directors
“Lawrence Page”
Lawrence Page, Q.C.
President, Southern Silver Exploration Corp.
For further information, please visit Southern Silver’s website at southernsilverexploration.com or contact Liana Shahinian at 1.888.456.1112 or by email at liana@mnxltd.com.
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 Southern Silver’s projects, and the availability of financing for Southern Silver’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.