South American Silver Corp. Announces an Updated Resource Estimate for the Gold Springs Gold-Silver Project Located in Nevada/Utah, USA
VANCOUVER, BRITISH COLUMBIA -- (Marketwired - Feb 26, 2014) - South American Silver Corp. (TSX:SAC) (TSX:SAC.B) (OTCQX:SOHAF) (the "Company") is pleased to announce the completion of an updated resource estimate for the Jumbo Zone and the Grey Eagle Zone at the Gold Springs gold-silver project that straddles the Nevada-Utah border.The updated 2014 resource which includes, measured, indicated and inferred resource categories was estimated for the Jumbo Zone in Utah and the Grey Eagle Zone in Nevada, both of which are open to expansion. These two targets represent only two of the eighteen outcropping targets identified so far in the 74 sq. km Gold Springs District and none of the buried geophysical targets which greatly exceed the size of the 18 surface targets.
| Grey Eagle plus Jumbo | |||||||
| Resource | Gold | Silver | Gold Equivalence | ||||
| Cutoff Au g/tonne | Tonnes | Troy oz | Grade g/t | Troy oz | Grade g/t | Troy oz AuEq | Grade g/t AuEq |
| Measured plus Indicated ("M&I") | |||||||
| 0.2 | 21,289,000 | 339,000 | 0.50 | 6,687,000 | 9.8 | 456,000 | 0.67 |
| 0.30 | 13,724,000 | 279,000 | 0.63 | 5,158,000 | 11.7 | 369,000 | 0.84 |
| Inferred* | |||||||
| 0.2 | 16,674,000 | 214,000 | 0.40 | 4,857,000 | 9.1 | 299,000 | 0.56 |
| 0.30 | 8,771,000 | 150,000 | 0.53 | 3,329,000 | 11.8 | 208,000 | 0.74 |
| Gold equivalent (AuEq) calculations reflect gross metal content using the following gold/silver ratio of 57.14, and have not been adjusted for metallurgical recoveries. Numbers have been rounded, which may lead to some numbers not adding up exactly. | |||||||
*The Inferred resource is in addition to the measured and indicated resource
This updated resource includes the assay information from an additional 55 reverse circulation (RC) drill holes completed in 2013. The allocation of part of the resource as M&I became possible because of both the increased drilling and importantly, the much tighter geological control and understanding of the mineralization. The terms Inferred, Indicated and Measured refer to categories of increasing certainty of the resource. Only Indicated and Measured Resources can be included in pre-feasibility and feasibility studies.
Highlights:
- The newly defined M&I resource of 456,000 oz. AuEq averaging 0.67g/t AuEq and an additional 299,000 oz AuEq @0.56 g/t AuEq in the Inferred category, is based on a gold (Au) cutoff of 0.2 g/t. If the cutoff is increased to 0.3 g/t Au then the M&I resource grade increases to 0.84 g/t AuEq for a total of 369,000 oz. AuEq and an additional 208,000 oz AuEq @0.74g/t AuEq. in the Inferred category.
- The prior resource published by High Desert Gold Corp. ("HDG") on March 28, 2013 included 415,254 oz AuEq @0.67 g/t AuEq. All in the Inferred category. The additional AuEq ounces discovered by the 2013 drilling program equates to approximately 6,200 ounces per drill hole for the 55 hole program.
- The gold-silver mineralization at both the Jumbo and Grey Eagle Zones remains open to expansion laterally and to depth as the drilling to date has typically only penetrated the top 150 metres vertically below the surface at Jumbo and 200 metres below the surface at Grey Eagle.
- The mineralization located in the drill holes typically projects to the surface where it outcrops or is covered by a thin veneer of gravel or post mineral volcanics.
- Metallurgical test-work on coarse grained material (HDG PR13-23 dated September 9, 2013) gave good gold extractions, suggesting that low cost "heap-leach" processing may be applicable (crushing only, no mill).
- Grey Eagle extractions: 78.8% gold, 19% silver
- Jumbo extractions: 88.5% gold, 53.5% silver
- Grey Eagle extractions: 78.8% gold, 19% silver
- Metallurgical testing of fine grained material (HDG PR13-23) from the same samples showed very high extractions. Processing fine grained material would require the additional capital cost of a mill to grind the mineralized material and leaching would likely be in vats.
- Grey Eagle extractions: 89% gold, 41% silver
- Jumbo extractions: 93% gold, 76% silver
- Grey Eagle extractions: 89% gold, 41% silver
- Metallurgical testing at Jumbo shows that up to 57.2 % of the gold is recoverable by gravity means. (HDG PR10-17, October 18, 2010)
- The ZTEM geophysical survey, completed in 2011, indicates that the gold-silver bearing geological/geophysical setting that has been drilled at the Jumbo may continue for approximately 8 kilometres along strike, much of which remains untested. (HDG PR12-14, August 16, 2012).
- The total strike length of the margins of the high resistivity ZTEM geophysical targets interpreted to correlate with the gold mineralization is approximately 33 km.
Ralph Fitch, President and CEO of South American Silver Corp., stated "This dramatic increase in the size and quality of the resource at Gold Springs strongly supports management's contention that the property has the potential to host a significant economic resource. The next step for the Company is to complete an internal economic review and decide whether we presently have an economic unit which we could move towards development or we need to continue to expand the resource to achieve this."
The resource in more detail:
| Grey Eagle plus Jumbo | |||||||
| Resource | Gold | Silver | Gold Equivalence | ||||
| Cutoff Au g/tonne | Tonnes | Troy oz | Grade g/t | Troy oz | Grade g/t | Troy oz AuEq | Grade g/t AuEq |
| Measured | |||||||
| 0.2 | 3,337,000 | 69,000 | 0.64 | 767,000 | 7.1 | 82,000 | 0.77 |
| 0.3 | 2,372,000 | 61,000 | 0.80 | 633,000 | 8.3 | 72,000 | 0.95 |
| 0.5 | 1,369,000 | 48,000 | 1.10 | 452,000 | 10.3 | 56,000 | 1.27 |
| Indicated | |||||||
| 0.2 | 17,952,000 | 270,000 | 0.47 | 5,920,000 | 10.3 | 374,000 | 0.65 |
| 0.3 | 11,352,000 | 218,000 | 0.60 | 4,525,000 | 12.4 | 297,000 | 0.81 |
| 0.5 | 4,654,000 | 135,000 | 0.90 | 2,116,000 | 14.1 | 172,000 | 1.15 |
| Measured plus Indicated | |||||||
| 0.2 | 21,289,000 | 339,000 | 0.50 | 6,687,000 | 9.8 | 456,000 | 0.67 |
| 0.3 | 13,724,000 | 279,000 | 0.63 | 5,158,000 | 11.7 | 369,000 | 0.84 |
| 0.5 | 6,023,000 | 183,000 | 0.95 | 2,568,000 | 13.3 | 228,000 | 1.18 |
| Inferred | |||||||
| 0.2 | 16,674,000 | 214,000 | 0.40 | 4,857,000 | 9.1 | 299,000 | 0.56 |
| 0.3 | 8,771,000 | 150,000 | 0.53 | 3,329,000 | 11.8 | 208,000 | 0.74 |
| 0.5 | 2,845,000 | 76,000 | 0.83 | 1,321,000 | 14.4 | 99,000 | 1.08 |
| Gold equivalent (AuEq) calculations reflect gross metal content using the following gold/silver ratio of 57.14, and have not been adjusted for metallurgical recoveries. Numbers have been rounded, which may lead to some numbers not adding up exactly. | |||||||
| Grey Eagle | |||||||
| Resource | Gold | Silver | Gold Equivalence | ||||
| Cutoff Au (g/t) | Tonnes | Troy oz | Grade (g/t) | Troy oz | Grade (g/t) | Troy oz AuEq | Grade (g/t) AuEq |
| Measured | |||||||
| 0.2 | 3,337,000 | 69,000 | 0.64 | 767,000 | 7.1 | 82,000 | 0.76 |
| 0.3 | 2,372,000 | 61,000 | 0.80 | 633,000 | 8.3 | 72,000 | 0.94 |
| 0.5 | 1,369,000 | 48,000 | 1.09 | 452,000 | 10.3 | 56,000 | 1.27 |
| Indicated | |||||||
| 0.2 | 4,329,000 | 81,000 | 0.58 | 928,000 | 6.7 | 97,000 | 0.70 |
| 0.3 | 3,058,000 | 71,000 | 0.72 | 762,000 | 7.8 | 84,000 | 0.85 |
| 0.5 | 1,765,000 | 55,000 | 0.97 | 523,000 | 9.2 | 64,000 | 1.13 |
| Measured plus Indicated | |||||||
| 0.2 | 7,666,000 | 150,000 | 0.61 | 1,695,000 | 6.9 | 180,000 | 0.73 |
| 0.3 | 5,430,000 | 132,000 | 0.76 | 1,395,000 | 8.0 | 156,000 | 0.89 |
| 0.5 | 3,134,000 | 103,000 | 1.02 | 975,000 | 9.7 | 120,000 | 1.19 |
| Inferred | |||||||
| 0.2 | 3,484,000 | 65,000 | 0.58 | 759,000 | 6.8 | 78,000 | 0.70 |
| 0.3 | 2,440,000 | 56,000 | 0.71 | 607,000 | 7.7 | 67,000 | 0.85 |
| 0.5 | 1,477,000 | 43,000 | 0.91 | 450,000 | 9.5 | 51,000 | 1.07 |
| Gold equivalent (AuEq) calculations reflect gross metal content using the following gold/silver ratio of 57.14, and have not been adjusted for metallurgical recoveries. Numbers have been rounded, which may lead to some numbers not adding up exactly. | |||||||
| Jumbo | |||||||
| Resource | Gold | Silver | Gold Equivalence | ||||
| Cutoff Au (g/t) | Tonnes | Troy oz | Grade (g/t) | Troy oz | Grade (g/t) | Troy oz AuEq | Grade (g/t) AuEq |
| Measured - Not Applicable | |||||||
| Indicated | |||||||
| 0.2 | 13,623,000 | 189,000 | 0.43 | 4,992,000 | 11.4 | 276,000 | 0.63 |
| 0.3 | 8,294,000 | 147,000 | 0.55 | 3,763,000 | 14.1 | 213,000 | 0.80 |
| 0.5 | 2,889,000 | 80,000 | 0.87 | 1,593,000 | 17.2 | 108,000 | 1.17 |
| Inferred | |||||||
| 0.2 | 13,190,000 | 149,000 | 0.35 | 4,098,000 | 9.7 | 221,000 | 0.52 |
| 0.3 | 6,331,000 | 94,000 | 0.46 | 2,722,000 | 13.4 | 142,000 | 0.70 |
| 0.5 | 1,368,000 | 33,000 | 0.75 | 871,000 | 19.8 | 48,000 | 1.09 |
| Gold equivalent (AuEq) calculations reflect gross metal content using the following gold/silver ratio of 57.14, and have not been adjusted for metallurgical recoveries. Numbers have been rounded, which may lead to some numbers not adding up exactly. | |||||||
Lane & Associates estimated the mineral resources for each of the two deposits within Gold Springs, Grey Eagle and Jumbo, by constructing a model representing the mineral deposits and statistically and geostatistically analyzing the drill hole data. This information was used to define the estimation parameters used to estimate gold and silver grades into the 3-dimensional (3D) block model. Three algorithms were used to estimate grade for both gold and silver within each block model: Geologic Wireframe using inverse distance cubed (ID3), indicator kriging (IK), and nearest neighbor (NN). The results from each method were very similar, validating the estimate. The Geologic Wireframe model is the preferred estimate and is reported here. The data includes 88 exploration holes and trenches in the Grey Eagle deposit totaling 11,123 metres and 76 exploration holes and trenches in the Jumbo deposit totaling 9,235 metres. The drill holes in the Grey Eagle deposit are up to 262 metres deep, and all of them are within the block model limits. The drill holes in the Jumbo deposit are up to 233 metres deep, and all of them are within the block model limits. Information from channel and trench samples were included to better define mineralization near surface.
The assay data contains a total of 13,953 gold results, ranging from 0 to 18,867 parts per billion (ppb), and 13,732 silver results, ranging from 0 to 189.7 parts per million (ppm). Within the Grey Eagle, deposit, there are 7,314 gold results, ranging from 0 to 15,181 ppb, and 7,120 silver results, ranging from 0 to 89.2 ppm. Within the Jumbo deposit, there are 5,257 gold results, ranging from 0 to 18,867 ppb, and 5,231 silver results, ranging from 0 - 189.7 ppm. The samples were taken at 5 foot (1.52 metre) intervals. Assays were composited to 15 feet (4.57 metre) intervals down hole. This resulted in 2,441 composites in the Grey Eagle deposit and 2,031 composites in the Jumbo zone. Of the Grey Eagle composites, 1,193 were in the Grey Eagle wire frame, and 1,275 of the Jumbo composites were in the Jumbo wire frame. The Geologic Wireframe model utilized a block model with 5 metre by 5 metre, by 5 metre blocks (xyz) and the geological interpretation of the mineralized envelope to isolate the mineralized domain from non-mineralized rock and to control estimation of gold and silver near known faults. An inverse distance cubed algorithm was used with a minimum of 2 composites and a maximum of 5 composites to reduce smoothing.
Lane and Associates classified the Mineral Resource as Measured within 15.24 metres of a drill hole, Indicated up to 30.48 metres from holes, and Inferred beyond 30.48 metres. The Measured and Indicated categories fall within approximately 1/2 of the variogram range. The Jumbo Resource does not include the Measured category as much of the drill hole data is more sparsely distributed.
>The Company is not aware of any legal, political, environmental, or other risks that could materially affect the potential development of the mineral resources at Gold Springs.
The Mineral Resource has been prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) standards by Ms. Terre Lane, President of Lane and Associates. Ms. Lane is a "qualified person", as defined in NI 43-101, is "independent" of the Company, as defined in NI 43-101, and has reviewed and approved the technical information regarding the resource estimate in this release. A NI 43-101 compliant technical report on the resource will be finalized and filed on SEDAR within 45 days of the date of this news release.
ABOUT SOUTH AMERICAN SILVER CORP.
South American Silver Corp. ("SASC") is a growth focused mineral exploration company creating value through the exploration and development of the 100% owned, near-surface, Gold Springs gold-silver project in mining friendly Nevada and Utah in the USA; the advancement of the large scale Escalones copper-gold project in Chile, and realization of value from the expropriated Malku Khota project in Bolivia through the arbitration process. The Company also has a 30.5% interest in the Canasta Dorada property in Sonora, Mexico, through its equity interest in Highvista Gold Inc. and a 100% interest in the San Antonio property in Sonora. There has been insufficient exploration to define a property-wide mineral resource at Gold Springs and it is uncertain if further exploration will result in the additional targets being delineated as mineral resources.
For further information on the Company please visit our website at www.soamsilver.com or click on the following link to go directly to maps associated with this press release: www.soamsilver.com/gold-springs.asp
Forward-looking Statements
Certain statements contained herein constitute "forward-looking statements". Forward-looking statements look into the future and provide an opinion as to the effect of certain events and trends on the business. Forward-looking statements may include words such as "target", "expansion", "planning", "indicates", "potential", "suggesting," "would", "will" and similar expressions. Information concerning mineral resource estimates and the interpretation of drill, metallurgical testing and other exploration results may also be considered forward-looking statements as such information constitutes a prediction of what mineralization might be found to be present if and when a mining project is actually developed. These forward- looking statements are based on current expectations and entail various risks and uncertainties. Actual results may materially differ from expectations, if known and unknown risks or uncertainties affect our business, or if our estimates or assumptions prove inaccurate. Factors that could cause results or events to differ materially from current expectations expressed or implied by the forward-looking statements, include, but are not limited to, possible variations in mineral resources, grade, metal prices; availability of sufficient financing to fund planned or further required work in a timely manner and on acceptable terms; changes in project parameters as plans continue to be refined; failure of equipment or processes to operate as anticipated; regulatory, environmental and other risks of the mining industry more fully described in the Company's Management Information Circular dated November 7, 2013 (including documents incorporated by reference therein), which are available on SEDAR at www.sedar.com. The assumptions made in developing the forward-looking statements include: the accuracy of current resource estimates and the interpretation of drill, metallurgical testing and other exploration results; the availability of equipment and qualified personnel to advance the Gold Springs project; execution of the Company's existing plans and further exploration and development programs for Gold Springs, which may change due to changes in the views of the Company or if new information arises which makes it prudent to change such plans or programs; and the completion by the independent qualified person of a NI 43-101 compliant technical report on the resource within 45 days of the date of this news release.
Readers are cautioned not to place undue reliance on the forward-looking statements contained in this news release. Except as required by law, SAC assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or any other reason. Unless otherwise indicated, forward-looking statements in this news release describe the Company's expectations as of February 26, 2014.
Inferred Resources
This news release uses the term 'inferred resources' which is recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects), however, such term is not a defined term under SEC Industry Guide 7 and is not normally permitted to be used in reports and registration statements filed with the United States Securities and Exchange Commission. Investors are cautioned not to assume that any part or all of the 'inferred resources' will be upgraded or converted into 'indicated resources' or 'reserves' as defined under NI 43-101. In addition, 'inferred resources' have a great amount of uncertainty as to their existence, and economic and legal feasibility. Under Canadian rules, estimates of inferred resources may not form the basis of feasibility or pre-feasibility studies, or economic studies except for preliminary economic assessment as defined under NI 43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.
Contact
South American Silver Corp.
Ralph Fitch, President and CEO
(303) 584-0606
(303) 758-2063
rfitch@soamsilver.com
www.soamsilver.com