Santacruz Silver Announces Resource and Drilling Update at Rosario and Clarifies Disclosure
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 12/21/12 -- Santacruz Silver Mining Ltd. (TSX VENTURE: SCZ) ("Santacruz" or the "Company") is pleased to announce the completion of an updated NI 43-101 mineral resource estimate on its Rosario Project in the Charcas Mining District, San Luis Potosi, Mexico. The mineral resource estimate was completed by Gustavson Associates, LLC, of Lakewood, Colorado ("Gustavson"). The measured and indicated silver equivalent ("AgEq") resource amounts to 10.2 million AgEq ounces while the inferred resources stand at 2.5 million AgEq ounces. The initial resource estimate at the Rosario Project included only inferred resources and subsequent exploration work performed at the property by Santacruz has successfully upgraded 86% of these inferred resources to measured and indicated.
Highlights are as follows:
-- Measured Mineral Resources: 270,000 tonnes grading 210 g/t Ag, 0.94 g/t
Au, 3.69% Zn, and
1.17% Pb containing 3.3 million AgEq(1) ounces.
-- Indicated Mineral Resources: 711,000 tonnes grading 163 g/t Ag, 0.88 g/t
Au, 2.60% Zn, and
1.18% Pb containing 6.9 million AgEq(1) ounces.
-- Inferred Mineral Resources: 386,000 tonnes grading 90.6 g/t Ag, .81 g/t
Au, 2.10% Zn and 0.73%
Pb containing 2.5 million AgEq(1) ounces.
Both the Rosario I and II veins are open in all directions with 2 km of untested NE-SWE strike length. Limited drilling below the 200-metre level provides potential to further expand the resources.
Please see resource categories and further details below.
Prior work on the Rosario Project includes 185 diamond core holes totalling nearly 25,000 meters drilled in 3 distinct vein areas by the Servicio Geologico de Mexico (SGM), formerly Consejo de Recursos Minerales (CRM) from 1982 to 1987 that identified through drilling: the Rosario I (or "upper") vein and the Rosario II (or "lower") vein.
This prior data has been confirmed by twinned and closely spaced holes from 35 new holes drilled during exploration campaigns in 2011 and 2012. This additional drill hole information has been included in the current resource estimate. Selected material intersections of the drilling are summarized below. The nine holes drilled in 2011 were in the main portion of the mineralized zone on the property. The 26 holes drilled in 2012 were spaced along the length of the property and tested the area drilled earlier by CRM.
President Arturo Prestamo states, "This new NI 43-101 Mineral Resource Estimate on the Rosario Project re-affirms management's expectations of the Rosario Project based on exploration to date. This resource classification upgrade provides us with more certainty that the Rosario Project will be an emerging silver producer that will be the foundation of the Company as we advance towards becoming a mid-tier silver producer. We remain on schedule to achieve commercial production at the Rosario Project within the first quarter of 2013."
The Company decided to put the Rosario Project into production based on its verification of historical geological and mining information from Mexico's Geological Survey. Santacruz conducted exploration programs, including the drilling campaigns during 2011 and 2012 in order to confirm historical geological data which resulted in the generation of the new resource estimate. This information was incorporated by the Company into geological, mining and economic models which in conjunction with management's experience and expertise gained from building similar sized mines in Mexico led to a positive production decision.
The production decision for the Rosario Project was not based on a feasibility study of mineral reserves demonstrating economic and technical viability. Accordingly, there is increased uncertainty and economic and technical risks of failure associated with this production decision. Production and economic variables may vary considerably due to the absence of a completed and detailed analysis as would be included in a feasibility study. The risks associated with this decision are set forth in the Company's AIF under the heading "Risk Factors".
In light of the new resource estimate, the December 2011 Preliminary Economic Assessment cannot be relied upon.
Mineral resources which are not mineral reserves do not have demonstrated economic viability.
Rosario Project Resource Estimate
The Rosario Project contains a Measured Resource of 270,000 tonnes grading 381 g/t AgEq(1) and an Indicated Resource of 711,000 tonnes grading 303 g/t AgEq(1) and an Inferred Resource of 386,000 tonnes grading 203 g/t AgEq(1) at a cutoff grade of 75g/t. The cutoff for resource reporting is based on underground vein mining with long hole or shrinkage stoping with milling and flotation. The estimate assumes similar metallurgical recoveries for all metals.
For resource estimation, the vein assays were composited into a single intercept for each vein and the true thickness was calculated. A grid model was created for each vein. Gold, silver, lead and zinc were estimated using the composite grades and the true thickness of each vein was also estimated. Estimates were made using inverse distance weighting and a search distance of 150 meters along strike and down dip, approximately twice the average drill hole spacing. From 64 density measurements Gustavson has estimated an average in place density of 3.0 tonnes/cubic meter of vein material.
To view the tables that summarize the Mineral Resource Estimate, please click on the following link: http://media3.marketwire.com/docs/scz1.jpg
The new mineral resource estimate has an effective date of December 1, 2012 and was completed under the supervision of Donald E. Hulse PE and SME-RM. Mr. Hulse is a qualified person under NI 43-101 and independent of Santacruz as defined by section 1.5 of NI 43-101. Mr. Hulse is an employee of Gustavson. A complete technical report prepared pursuant to NI 43-101 will be filed on SEDAR within 45 days of this press release.
The quantity and grade of inferred resources reported herein are uncertain in nature and exploration completed to date is insufficient to define these mineral resources as indicated or measured. There is no guarantee that further exploration will result in the inferred mineral resources being upgraded to an indicated or measured mineral resource category.
The Company intends to incorporate the new resource estimate into a Pre-feasibility Study, planned for completion in the first quarter of 2013. The Company is planning to complete this Pre-Feasibility Study notwithstanding the production decision at Rosario discussed above, in order to move towards estimating potential mineral reserves.
Rosario Project - Selected Drill Results
Additional drilling completed on the property subsequent to the maiden resource estimate and included in the current resource estimate include the following intersections:
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Vein
DDH ------------------------ Au Ag Pb Zn
ID From To Width gr/ton gr/ton % %
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AP-1 114.30 115.35 1.05 0.98 3464 4.74 10.46
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AP-2 121.00 121.45 0.45 0.54 378 0.23 5.00
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AP-2 166.20 166.90 0.70 0.80 362 4.87 4.14
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AP-3 72.60 73.75 1.15 0.19 225 0.37 3.64
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AP-6 42.45 42.75 0.30 0.25 694 1.65 0.97
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AP-7 43.30 44.75 1.45 0.07 169 0.17 1.04
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AP-7 147.60 149.80 2.20 0.24 157 0.29 2.29
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AP-8 22.00 23.80 1.80 0.14 367 1.92 1.88
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RS-01 36.30 37.85 1.55 0.12 304 0.2 3.4
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RS-01 57.10 58.30 1.20 0.33 634 0.28 6.66
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RS-02 44.00 46.10 2.10 0.36 122 0.05 2.12
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RS-03 60.15 62.75 2.60 1.23 344 0.12 12.10
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RS-11 126.60 127.80 1.20 3.91 48 0.01 8.97
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RS-21 155.70 156.45 0.75 0.15 231 0.10 14.86
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RS-22 Bis 84.90 85.40 0.50 0.04 102 1.41 1.35
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All of the drill results are included in Schedule A to this press release.
Sampling and Laboratory
NQ-sized drill core was sawn in half at site and sent to ALS Chemex, a fully accredited and certified laboratory service. Samples were prepared at the ALS Chemex facility in Zacatecas, Mexico, and were assayed at ALS Chemex in Vancouver, Canada. All samples were analysed using a one ton fire assay with an AA finish Au and Ag (Au-AA23) and a 48 element ICP method for Pb, Zn and other elements (ME-MS61). A comprehensive QA/QC procedure is followed using standards, blanks and duplicates, all samples are randomly placed.
Qualified Person
Donald E. Hulse P.E., SME-RM of Gustavson Associates, LLC, is a qualified person under NI 43-101 and has reviewed and approved the technical information contained in this press release.
Data Verification
Mr. Hulse verified the data disclosed in this release, including the sampling, analytical and test data underlying the information contained in this release. Verification included a review and validation of the applicable assay databases and reviews of assay certificates.
About Santacruz Silver Mining Ltd.
Santacruz is a Mexican focused silver company with a project in development (Rosario) and two advance-stage exploration projects (San Felipe and Gavilanes). The Rosario Project is expected to reach production by the end of the first quarter of 2013. The Company is managed by a technical team of professionals with proven track records in developing, operating and discovering silver mines in Mexico. Our corporate objective is to become a mid-tier silver producer.
Arturo Prestamo Elizondo, President, Chief Executive Officer and Director
Forward-looking information
Certain statements contained in this news release, such as potential mineralization on the Company's properties, the Company's exploration and development plans and anticipated production dates on the Company's mineral properties, constitute "forward-looking information" as such term is used in applicable Canadian securities laws. Forward-looking information is based on plans, expectations and estimates of management at the date the information is provided and is subject to certain factors and assumptions, including, that the Company's financial condition and development plans do not change as a result of unforeseen events, that the Company obtains regulatory approval, future metal prices and the demand and market outlook for metals. Forward-looking information is subject to a variety of risks and uncertainties and other factors that could cause plans, estimates and actual results to vary materially from those projected in such forward-looking information. Factors that could cause the forward-looking information in this news release to change or to be inaccurate include, but are not limited to, the risk that any of the assumptions referred to prove not to be valid or reliable, that occurrences such as those referred to above are realized and result in delays, or cessation in planned work, that the Company's financial condition and development plans change, delays in regulatory approval, risks associated with the interpretation of data, the geology, grade and continuity of mineral deposits, the possibility that results will not be consistent with the Company's expectations, as well as the other risks and uncertainties applicable to mineral exploration and development activities and to the Company as set forth in the Company's Annual Information Form filed under the Company's profile at www.sedar.com The Company undertakes no obligation to update these forward-looking statements, other than as required by applicable law.
This news release does not constitute an offer to sell or solicitation of an offer to sell any securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable securities laws or an exemption from such registration is available.
To view the "Schedule A: Drill Holes 2011 and 2012" tables, please click on the following link: http://media3.marketwire.com/docs/scz2.pdf
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Santacruz Silver Mining Ltd.
Neil MacRae
(604) 569-1609
info@santacruzsilver.com