VANCOUVER, BC, Jan. 13, 2022 /CNW/ - Outcrop Silver &
Gold Corporation (TSXV: OCG) (OTCQX: OCGSF) (DE:
MRG1) ("Outcrop") is pleased to share an open
letter from President and Chief Executive Officer, Joseph Hebert, to shareholders of the
Company.
Dear Fellow Shareholders:
I wanted to take the opportunity to reflect on our growth and
relate objectives for an important year ahead. 2021 provided
numerous achievements for Outcrop.
Strong Start as a TSX Venture 50 Company
We started 2021 strong, being named to the TSX Venture 50, a
ranking of top performing companies traded on the TSX Venture
Exchange. At that time Outcrop was ranked fourth in the Mining
Sector with a market cap increase of 1,381% and a share price
increase of 392% in 2020. Achieving this significant milestone was
a testament of the abilities of the team in Colombia, Management, Board of Directors, and
the ongoing support from our community stakeholders of Falan and
surrounding areas.
We hope that as you read on, you will take away the value
generated on the ground last year, and the potential that lies
ahead to return to the valuation we had in early 2021 and
beyond.
Expanded Footprint in Colombia's Richest Historic Silver
Camp
Work has progressed systematically on our flagship Santa Ana discovery in Colombia's richest silver camp. As such, we
adopted a name change to Outcrop Silver and Gold to reflect our
strategy and results.
With continued drilling success, we expanded our land package to
36,000 hectares to capture over 60 kilometres of cumulative vein
zones which includes three significant historic mines. The Frias
Mine in particular produced 7.8 million ounces of silver at a
recovered grade of 1,300 g Ag/t from a single shoot 250 metres long
by 320 metres deep. Frias serves as an analogue for a typical
Santa Ana shoot. Outcrop has
defined 7 high grade shoots to date of comparable size to Frias.
Frias, 16 kilometres to the southwest occurs within an extension of
the same vein system hosting the Royal Santa Ana Mine.
The most recently added claims extend the property boundaries to
the south-southwest and fill-in important gaps in the south and
eastern portions of the Santa Ana
project. Outcrop now controls more than a district; it controls a
regional-scale, world class silver-gold vein system.
Consistent High-Grade Across a Growing Vein System
Santa Ana is the highest-grade
project in Colombia and is
competitive in respect to grade with any modern project active in
South America. By early
December 2021, we completed 29,510
metres in 183 core holes. For 110 intercepts over 200 g eq
Ag/t, the average weighted average grade is 1,380 g eq Ag/t (18.9 g
eq Au/t) over an average intercept width of 0.76 metres. All seven
shoots discovered to date are represented by the 110 intercepts.
The equivalent grades reflect an average of 7.25 g Au/t and 849 g
Ag/t for a silver to gold ratio of 117 to 1.
Importantly, we expanded the potential resource area and
identified several parallel and intersecting veins and related vein
segments, with the following compelling characteristics:
- More numerous high-angle veins are connected by low-angle
veins, with both orientations containing large high-grade
shoots.
- All seven shoots have robust average internal grades from
preliminary 3D models that range from 809 to 2,120 g eq Ag/t.
- Robert Tovar, San Juan, and San
Antonio are spaced several hundred metres apart and may
converge at depth. These shoots provide a regular periodicity to
help guide drilling.
- All shoots remain open laterally and at depth, with potential
for significant expansion.
- The long axis of the shoots rake or plunge at a low angle
within the plane of the vein. As an example, Megapozo has a long
axis of 480 metres across a 300-metre depth of the vein.
- Locally, some shoots comprise several close-spaced veins that
can be composited together in one interval. Examples are three
veins in Roberto Tovar that
composite for 10 metres at 450 g eq Ag/t and two veins in La Ivana
that composite 6 metres of 340 g eq Ag/t.
Narrow Vein Mining
Globally narrow veins provide over 30% of all underground
production. Several major underground mobile equipment
manufacturers provide mechanized drilling, and load and haul
equipment specifically for narrow-width mines. There are some
inherent advantages to narrow high-grade vein mining; less capital
is required, less development and waste tonnages are produced in
proportion to ore, and less tailings are produced in milling in
proportion to metals recovered. All these features contribute to a
smaller societal and environmental impact.
Santa Ana although in an
exploration stage, can be compared favorably with several projects
including Silvercorp's Ying Mine, Aurcana's Ouray Mine, and
SilverCrest's Chispas Project. These mines employ a combination of
mining methods including long-hole, shrinkage and in particular
resue (a mechanized selective mining method) or modified resue to
keep grade dilution to a minimum. Both Silvercorp and Aucana
use resue mining to mine veins less than 0.5 metres in width. These
projects report or forecast all in sustaining costs (AISC) in the
range of US $ 7.00 to $8.00 per silver equivalent ounce.
Path to Maiden Resource in 2022
Progressive work at Santa Ana
has shaped the foundation to deliver an upward scalable maiden
resource in late 2022 while simultaneously generating and drilling
additional robust targets. Currently, one rig is defining the
Megapozo and Ivana shoots and will continue north from San Juan to test for additional shoots.
A second rig is scheduled to arrive in Q1 2022 and will start
to the north at El Dorado, Los
Naranjos and Alaska targets before
moving to the Espiritu Santo, Las Maras, California, and La Isabela targets to the
south. Outcrop plans to mobilize a third drill rig in March to
focus on resource definition drilling.
Currently, the potential cumulative resource area with drill
definition is 1,840 metres long by 300 metres projected to depth.
It is likely the mineralization will extend well beyond 300
metres.
Our phase four drilling program is underway, with an expected
18,000 metres of drilling planned to be completed by August, when a
fifth phase drill plan will be initiated. We expect to share
further details on drill plans and outline additional high priority
targets as work advances.
District-scale Potential through Regional Prospecting
Beyond the known shoots, we are advancing seven new targets up
to 2.5 kilometres to the north and 5 kilometres to the south which
show encouraging values in surface sampling with assays up to 64.8
g Au/t and 5,242 g Ag/t and a high of 6,735 g eq Ag/t. Several
targets are drill ready, and we expect to add them to our
exploration plan in H1 2022. With less than 10% of the project
drilled to date, we are excited about the regional potential around
Santa Ana, and exploring to the
Frias Mine area 16 kilometres to the south of the Royal Santa Ana
Mine area.
The Right Team to Move the Project Forward
In August, we added a key member to our management team, Dr.
Jesus Velador as Vice President
Exploration. Jesus is a proven ore-finder, with extensive
experience and knowledge of epithermal systems. He previously
worked for Fortuna Silver Mines, First Majestic, and Fresnillo-MAG
Silver. His work with Fresnillo-MAG Silver in 2004 was instrumental
in the discovery of the Valdecanas vein deposit in Juanicipio. When
with First Majestic, he managed the exploration team that
discovered the silver and gold deposit at Ermitano near Santa
Elena. Jesus has been instrumental in growing the Santa Ana discovery and focusing on the
regional opportunities in the district.
Looking Ahead
While we continue to demonstrate that Santa Ana is a world class, high-grade
discovery, we strongly believe there is a significant discount in
our valuation. Although it has been a number of volatile months for
precious metals and equities, we have been working diligently to
bring Santa Ana to its next
milestone. In a landscape of a few explorers with robust and
expanding high-grade silver discoveries, we strongly believe
Outcrop provides a unique investment opportunity as we advance the
historic Santa Ana camp into the
21st century.
Colombia, with its proven rich
mineral endowment and relative lack of exploration is one of the
most attractive jurisdictions for mining investment in Latin America, as ranked by the Fraser
Institute in 2020. Falan is also a mining supportive region, and we
are actively working with the government leaders to provide benefit
to our greater community and neighbors living near the Santa Ana concessions through various
community-oriented initiatives.
We are entering 2022 with optimism and clear plan to generate
value for our shareholders, including identifying additional
opportunities for the other projects in our portfolio. On behalf of
the Outcrop team, I thank you for your continued support and look
forward to an exciting year ahead.
Yours truly,
Joseph Hebert, President and
CEO
About Outcrop
Outcrop is rapidly advancing exploration on five silver and gold
exploration projects with world-class discovery potential in
Colombia. Outcrop is currently drilling and expanding
the Santa Ana historic high-grade silver district. These
assets are being advanced by a highly disciplined and seasoned
professional team with decades of experience in Colombia.
ON BEHALF OF THE BOARD OF DIRECTORS
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as such term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release. Certain information contained herein
constitutes "forward-looking information" under Canadian securities
legislation. Generally, forward-looking information can be
identified by the use of forward-looking terminology such as
"potential", "we believe", or variations of such words and phrases
or statements that certain actions, events or results "will" occur.
Forward-looking statements are based on the opinions and estimates
of management as of the date such statements are made and they are
subject to known and unknown risks, uncertainties and other factors
that may cause the actual results, level of activity, performance
or achievements of Outcrop to be materially different from those
expressed or implied by such forward-looking statements or
forward-looking information, including: the receipt of all
necessary regulatory approvals, capital expenditures and other
costs, financing and additional capital requirements, completion of
due diligence, general economic, market and business conditions,
new legislation, uncertainties resulting from potential delays or
changes in plans, political uncertainties, and the state of the
securities markets generally. Although management of Outcrop
have attempted to identify important factors that could cause
actual results to differ materially from those contained in
forward-looking statements or forward-looking information, there
may be other factors that cause results not to be as anticipated,
estimated or intended. There can be no assurance that such
statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on
forward-looking statements and forward-looking information. Outcrop
will not update any forward-looking statements or forward-looking
information that are incorporated by reference herein, except as
required by applicable securities laws.
SOURCE Outcrop Silver & Gold Corporation