Southern Silver Exploration Corp. has granted Electrum Global Holdings L.P. the right to earn an indirect 60% interest in the Cerro Las Minitas property in Durango, Mexico 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.