Southern Silver Exploration Corp. (the “Company” or “Southern Silver”) (TSX.V: SSV) has granted Electrum Global Holdings L.P. (“Electrum”) the right to earn an indirect 60% interest in the Cerro Las Minitas property in Durango, Mexico (“Property”) by funding exploration and development expenditures of US$5 million on the Property over a maximum 48 month period.
Electrum will have the option to earn indirect interests in the Property through the acquisition of common shares of a Southern Silver subsidiary company which owns the Mexican company holding a 100% interest in the Property.
At closing, Electrum contributed US$500,000 to fund exploration expenditures and received an indirect 10% interest in the Property, which will be forfeited if Electrum does not contribute an additional US$1.5 million to fund exploration expenditures on the Property over the initial 18 month period of the option term. This initial US$2 million of contributions will earn Electrum an indirect 30% interest in the Property. Electrum will then have the right to earn an additional 20% by expending US$1.5 million in exploration expenditures in the succeeding 30 months of the option term. Subject to shareholder approval, a final 10% interest may be earned by expending an additional US$1.5 million in exploration expenditures during this time period.
Funding by Electrum will be utilized for exploration on the Property. Planning and budgeting is underway for the US$2 million exploration program which targets both the known zones of mineralization on the Property and new discoveries with the goal of developing a large silver-polymetallic resource on the Property.
Up to 10,000 metres of core drilling is planned as part of the overall exploration program as well as an expanded surface exploration program.
Drilling will focus on:
- the aggressive expansion at depth and along strike of high-grade Ag-Pb-Zn mineralization identified in the Blind and El Sol mineral zones;
- the delineation of new targets on the margins of the Central Monzonite Intrusion including the area of Mina La Bocona and the North Skarn zone;
- new drill targeting of geophysical and geochemical targets outboard of the known zones of mineralization both to the northwest and southwest of the Blind and El Sol zones; and
- systematic evaluation of previously identified biogeochemical anomalies throughout this 137 square kilometre, largely gravel covered property with the aim of identifying new discoveries separate from the currently known zones of mineralization.
This surface work will include additional vegetation sampling, surface prospecting and soil sampling in several key areas along the 25 kilometre strike-length. Several significant polymetallic biogeochemical anomalies are located on the eastern side of the property adjacent to Hecla Mining’s San Sebatian Au-Ag project (Indicated: 2.4Mt grading 281g/t Ag and 2.4g/t Au; Inferred: 3.7Mt grading 145g/t Ag and 1.2g/t Au) and will be a primary focus of this work. Up to 1,800 metres of the drilling program is proposed to test the best of these new anomalies.
About the Cerro Las Minitas Property
The Cerro Las Minitas property lies within the Faja de Plata (Belt of Silver) and is located just 70 kilometres to the northeast of the city of Durango in Durango State, Mexico, and is accessed easily by road. The Property consists of 18 concessions totaling 13,641 hectares in one of the most significant silver producing regions in the world with current reserves/resources and historic production in excess of 3 billion ounces of silver.
Since acquisition in 2010, drilling by Southern Silver on the Cerro Las Minitas project has totaled 23,310 metres in 75 core holes and has resulted in the identification of two high-grade silver-polymetallic deposits, the Blind zone and El Sol zone, which have been only partially delineated, and multiple new discoveries at the North Skarn and South Skarn targets and in extensions to the historic deposits at Mina Santo Nino and Mina La Bocona. Mineralization occurs as massive-sulphide pipes, veins and replacements in sub-vertical structures that demonstrate good continuity between drill holes. Mineralization is open on-strike and at depth in a geological environment similar to that of major Mexican Carbonate Replacement Deposits (CRDs) such as Santa Eulalia (45Mt of 310g/t Ag, 7.1% Zn and 8.2% Pb) and Skarn deposits such as San Martin (60Mt of 118g/t silver, 0.9% copper and 3 .9% zinc).
Geological modeling of the Blind and El Sol deposit using a nominal 80g/t AgEq cut-off has identified multiple distinct mineralized structures with a 820 metre cumulative strike-length and with depth projections of up to 350 metres below surface. Deeper mineralization has also been identified at the El Sol and Santo Nino zones.
The work to date provides the basis for future discoveries and the identification of potential Ag-Pb-Zn resources on the Property.
About Southern Silver Exploration Corp.
Southern Silver Exploration Corp. is a precious and base metal exploration and development company with a focus on mineral deposits in north-central Mexico and the southern USA. The Company engages in the acquisition, exploration and development either directly or through joint venture relationships in mineral properties in jurisdictions including the Cerro Las Minitas silver-lead-zinc project located in Durango, Mexico and the Oro porphyry copper-gold project located in southern New Mexico, USA.
Robert Macdonald (P.Geo) is a Qualified Person as defined by National Instrument 43-101 and is responsible for the compilation and review of the technical content of this release.
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 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.