Southern Silver Exploration Corp. ("Southern Silver") reported today that Freeport-McMoRan Exploration Corporation ("FMEC") has reported on results of first year operations, made an option payment of $100,000 and delivered plans for the first phase of second year operations on the Cerro las Minitas project in Durango State, Mexico.
Prior to FMEC's involvement with the project, Southern Silver had explored the property through airborne and detailed ground geophysical surveys together with 15,704 metres of diamond drilling in 62 holes which outlined high-grade, silver-lead-zinc mineralization over a cumulative 820 metre strike-length at the Blind zone. New discoveries were made at the El Sol zone, in parallel structures to the Blind zone mineralization, at the South Skarn target and in extensions to the historic deposits at Mina Santo Nino and Mina La Bocona.
Since entering into the option, FMEC has funded a first year exploration program consisting of 3445 metres of drilling in 8 holes subsequent to completion of detailed ground geophysical surveys.
Highlights from the most recent drilling funded by FMEC include:
- a 9.2 metre interval averaging 401g/t silver, 8.5% lead and 5.1% zinc (777g/t AgEq) from a shallow intercept on the Blind zone;
- a 55.2 metre interval averaging 41g/t silver, 0.7% lead and 5.3% zinc (202g/t AgEq) intersected at over 500 metres below surface in the El Sol zone; and
- a 13.9 metre interval averaging 135g/t silver, 2.4% lead and 1.3% zinc (250g/t AgEq) including a 2.4 metre interval 545g/t silver, 10.3% lead and 3.8% zinc (942 g/t AgEq) from the South Skarn target.
Exploration plans for the commencement of the second year of operations are for approximately 4,000 metres of core drilling to commence in November 2013. An initial seven sites have been selected for testing as a follow-up on earlier drilling funded and conducted by FMEC, which was successful in confirming both the distribution of high-grade mineralization in the Blind zone and identifying significant extensions of mineralization at each of the El Sol and South Skarn targets.
The proposed drilling will continue to test the lateral extensions of the El Sol and Blind zone mineralization and includes one hole on the recently acquired EL Sol concession (see NR-15-13, September 23, 2013) which could extend the on-strike potential of the previously identified zones of mineralization by upwards of 800 metres. An initial drill hole is planned to test the depth extension of mineralization at Mina Santo Nino, one of several historic small mining operations on the project, and two deep holes of up to 1,000 metres each are planned to test skarn targets on the flanks of the central intrusion. A third deep hole is planned as a test of IP and gravity geophysical anomalies outboard and to the northeast of the central intrusion.
FMEC contract synopsis
In year one of the option agreement, FMEC has funded total expenditures and payments of $2,687,103.05 as follows:
- paid Southern Silver $700,000 in option payments;
- funded $1,218,000 to the underlying Optionor of the property as option payments; and
- funded exploration costs of $769,103.05 on the project.
(Note: all references to money and $ refer to United States currency)
FMEC has been providing funding for, and directing, Southern Silver's subsidiary, Minera Plata del Sur, S.A. de C.V. ("MPS"), to explore the property since October 2012 and holds an option to earn a 70% indirect 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. Included in the gross interest is an initial 51% interest to be earned in the first three years of the agreement by expenditure of $5,000,000.FMEC has now met and exceeded the first year earn-in requirements of the option.
FMEC recently acquired from a third party an interest in the contiguous El Sol Concession, for cumulative payments of $2 million payable over a three year period, and, to the extent paid by FMEC, these payments will be counted as a credit towards its earn-in expenditures of the Cerro Las Minitas project.
Figure: Proposed FMEC target areas for 2013-14 Cerro las Minitas drilling (to view please click the following link: http://media3.marketwire.com/docs/SSVMap114.pdf)
Source: http://www.southernsilverexploration.com/