Silvermex Resources Ltd. (TSX VENTURE:SMR) (the "Company" or "Silvermex") is
pleased to announce it has entered into an agreement with Aurcana Corporation
(TSX VENTURE:AUN) ("Aurcana") to acquire a 100% interest in the silver -- gold
-- lead -- zinc Rosario Property ("Rosario Property") located in south eastern
Sinaloa State, Mexico. The Rosario Property consists of 18 concessions totaling
approximately 8,515 hectares and is located approximately 94 kilometres
southeast of Mazatlan. The property is strategically located within 2 kilometres
of Silvermex's 1,250 hectare San Marcial Silver property.
The Rosario Property was acquired in order to consolidate Silvermex's land
position in the San Marcial area and will help to accelerate Silvermex's
objective of becoming a near-term silver producer. The proximity to Silvermex's
San Marcial project combined with the silver resource and existing
infrastructure at Rosario will significantly reduce both time and capital
expenditures required for production.
The acquisition will include all facilities and infrastructure, including
surface rights, underground workings, tailings dam, water, power, offices,
shops, 60 man camp, warehouses and assay lab. The previous operator completed
partial renovations to the mine and mill site including; upgrading of electrical
substations and wiring, camp accommodations upgrades, mine dewatering and
detailed engineering of an 800 tonne per day (t/d) mill. The acquisition also
includes an extensive list of mill equipment and vehicles, including; a 1,200
t/d SAG ("Semi-Autogenous Grinding") mill, two 9 by 12 ball mills, numerous
feeders and tanks, electrical equipment, loader/backhoe, trucks, pumps,
compressors, etc.
The land directly surrounding the Rosario mill site (330 ha) is owned in fee
simple and key exploration and mining areas are under a current surface rights
agreement which remains in good standing for 20 years. Silvermex is working on a
preliminary in-house study which will determine mine and production plans based
on combining the two projects.
Historic production on the Rosario property by Grupo Mexico, the prior operator,
averaged 600 t/d from 1986 to 2000. During this production period a total of 2.5
million tonnes of ore were produced which averaged 190.5 grams per tonne (g/t)
silver, 0.92 g/t gold, 2.02% zinc and 2.38% lead.
The two main areas of interest on the Rosario Project are the San Juan Prospect
and the Plomosas Mine.
The San Juan prospect is a high priority target on the project. This vein
structure has 26,205 tonnes of historic reserves with grades of 339.9 grams per
tonne silver, 2.1% zinc, 1.4% lead and 0.4 grams per tonne gold and 230,511
tonnes of historic inferred resources with grades of 327.8 grams per tonne
silver, 3.90% zinc, 1.70% lead and 0.2 grams per tonne gold. Developed workings
consist of several hundred metres of drifts and cross cuts on two levels.
Previous owners Grupo Mexico reported the following historic reserves.
San Juan Historic Reserves and Resources, 2000
---------------------------------------------------------------------------
Grade Contained Metal
------------------- --------------------------------------
Ag Au Pb Zn Ag Au Pb Zn
Category Tonnes (g/t)(g/t) (%) (%) (oz) (oz) (lb) (lb)
---------------------------------------------------------------------------
Proven 12,325 333.5 0.3 1.4 2.1 132,150 119 362,355 543,533
---------------------------------------------------------------------------
Probable 13,880 345.5 0.4 1.3 2.1 154,178 178 378,924 612,108
---------------------------------------------------------------------------
Total 26,205 339.9 0.4 1.4 2.1 286,327 297 741,279 1,155,641
---------------------------------------------------------------------------
Inferred 230,511 327.8 0.2 1.7 3.9 2,429,318 1,482 8,229,243 18,878,851
---------------------------------------------------------------------------
Two adits provide access to the San Juan prospect. A decline has been driven
into the San Juan Vein and has tested the vein structure over a vertical
distance of 40 metres. Historic drill intersections suggest that the zone
remains open at depth.
Exploration work planned for the San Juan vein area will include exploring the
known zone at San Juan to depth. Diamond drill testing will also evaluate the
San Francisco vein which is interpreted to be an extension of the San Juan vein.
Surface sampling by Grupo Mexico traced the vein along strike for 600 metres,
and has reported results including 3.02 g/t gold and 314 g/t silver over 1.6
metres, and 0.34 g/t gold and 574 g/t silver over 1.7 metres.
The Plomosas Mine has been partially refurbished by the previous operator in
preparation for an 800 tpd operation. The Plomosas Mine currently has 323,278
tonnes of historic reserves with grades of 92.0 grams per tonne silver, 3.7%
zinc, 2.5% lead and 1.0 gram per tonne gold and 286,613 tonnes of historic
inferred resources with grades of 161.3 grams per tonne silver, 3.21% zinc,
2.23% lead and 1.2 grams per tonne gold.
Plomosas Mine Historic Reserves and Resources, 2000
---------------------------------------------------------------------------
Grade Contained Metal
------------------- --------------------------------------
Ag Au Pb Zn Ag Au Pb Zn
Category Tonnes (g/t)(g/t) (%) (%) (oz) (oz) (lb) (lb)
---------------------------------------------------------------------------
Proven 37,624 123.6 1.0 2.6 3.9 149,509 1,210 2,054,270 3,081,406
---------------------------------------------------------------------------
Probable 285,654 87.8 1.0 2.4 3.4 806,341 9,184 14,396,962 20,395,696
---------------------------------------------------------------------------
Total 323,278 92.0 1.0 2.5 3.7 955,850 10,393 16,451,232 23,477,101
---------------------------------------------------------------------------
Inferred 286,613 161.3 1.2 2.2 3.2 1,486,326 1,058 13,241,521 19,260,394
---------------------------------------------------------------------------
The historic reserves are located in a number of mineral zones which include the
Veta Plomosas, Plomositas, Lead-Zinc Stock Work, and Silver Stock Work.
Silvermex will focus on the potential that remains within these zones and
intends to expand the resource from areas remaining between old mine levels
along strike and below the lowest level exploited. The stock work zones are
thought to have potential for significant tonnage expansion along the strike and
dip of the Plomosas fault structure.
The reader should be cautioned the historic reserves and resources do not
conform to National Instrument 43-101 requirements for reporting purposes; as
such the Company is not treating these historic estimates as current reserves or
resources. These estimates should not be relied upon until they have been
verified by further due diligence and by the Company's "Qualified Person".
In addition to the Plomosas Mine and the San Juan prospect, there are a number
of exploration targets outlined by geology, geochemistry and geophysics which
are drill ready. In particular, Grupo Mexico had proposed a significant amount
of work including diamond drilling in the La Chorreras, and La Rastra areas.
Silvermex is encouraged by the exploration potential that has been identified by
Grupo Mexico and Aurcana on the Rosario Project.
The information included with the Rosario Project provides a wealth of historic
exploration data (geology, geochemistry, geophysics, drilling, and Landsat
studies). The value of this asset cannot be understated, as the accumulation of
a data base of this extent today would be prohibitive at current market prices.
Previous operators have compiled this information into a comprehensive database
to support and optimize the systematic geological and geochemical surveys to be
carried out for further exploration of the various untested targets identified
on the property. The Company has outlined a development drill program at Rosario
to better define the existing historic resources and upgrade the resource
category to NI 43-101 standards.
Under the terms of the acquisition, Silvermex will pay Aurcana $125,000 CDN and
issue 1 million shares upon signing. Silvermex will pay an additional $125,000
CDN within 90 days of signing. Upon successful production or within 24 months,
Silvermex will issue an additional 1 million shares and pay to Aurcana
$3,000,000 CDN in 6 installments of $500,000 every 6 months over 36 months.
Silvermex will also assume the balance of payments due to Grupo Mexico in the
amounts of $350,000 USD due in July 2009 and $650,000 USD due in January, 2010.
There is an NSR payable to Grupo Mexico exclusively on ore mined from the
Rosario mine(s) based on a zinc price matrix ranging from 1.75% when the price
of zinc is below USD$1.00 per pound to a maximum of 3.5% when the price of zinc
is higher than USD$1.50 per pound. The agreement is subject to TSX Venture
Exchange approval, the assignment of the underlying option agreement to
Silvermex and satisfactory due diligence by Silvermex.
Bruce Bragagnolo, Silvermex CEO, states; "The strategic acquisition of Rosario
will help to accelerate Silvermex's objective of becoming a near-term silver
producer. The proximity to our San Marcial project combined with the resource
and infrastructure in place at Rosario will significantly reduce both time and
capital expenditures required for production. The acquisition complements our
short term goals and our pre-production profile."
Preliminary resource modeling has determined that the San Marcial project
currently hosts a near-surface, potentially bulk-mineable, high-grade NI 43-101
resource of 1.399 million tonnes grading 359 g/t containing 16.149 million
ounces of silver. The existing resource is open at depth and along strike and
has been traced on surface for 1.6 kms. San Marcial has the potential to host
further silver deposits and has still undefined potential to host a gold deposit
which is associated with stockwork zones and narrow veins.
The Company also reports that the news release dated March 23rd, 2009
inadvertently stated that the option agreement with Silver Standard was dated
for settlement on February 1st, 2011. This should read February 1st, 2012.
Readers are cautioned that there are no assurances that all or any part of the
Resource Estimate will be economically viable and although the information in
this press release is based on the best available data the Company has collected
to date, a material difference between the actual results and the Company's
expectations may arise once further exploration is completed.
Qualified Person
Pursuant to National Instrument 43-101, Mr. William Lewis, B.Sc., P.Geo. (Micon
International Limited) is the independent Qualified Person responsible for the
mineral resource estimate.
Bruce Bried, B.Sc., P.Eng. and Senior Mining Consultant will oversee the
evaluation and economic assessments of the San Marcial and Rosario projects. Mr.
Bried is a professional engineer with over 25 years experience in engineering
and operating mines, his specialty is underground vein gold and silver mines.
Both Mr. William Lewis and Mr. Bruce Bried have read and approved this news release.
This News Release contains forward-looking statements. Forward looking
statements are statements which relate to future events. In some cases, you can
identify forward-looking statements by terminology such as "may", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential", or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors that may cause our or our industry's
actual results, level of activity, performance or achievements to be materially
different from any future results, levels of activity, performance, or
achievements expressed or implied by these forward-looking statements.
While these forward-looking statements, and any assumptions upon which they are
based, are made in good faith and reflect out current judgment regarding the
direction of our business, actual results will almost always vary, sometimes
materially, from any estimates, predictions, projections, assumptions or other
future performance suggests herein. Except as required by applicable law the
Company does not intend to update any forward-looking statements to conform
these statements to actual results.
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