Silverspar drilling advances project

Recent drilling on the Silver District property in La Paz Cty., Ariz., returned a number fluorite intersections for owner Silverspar Minerals (VSE).

The drilling is part of a prefeasibility program on the property which hosts a series of fluorite-silver deposits covering an area measuring about 12 square miles. Fluorite is the primary feedstock in the manufacture of “ozone friendly” hydrofluorocarbons.

Drilling results from three separate holes on the Padre Keno zone included: a 25-ft. intersection from 120 ft. to 145 ft. grading 16.78% fluorite and 0.28 oz. silver per ton; a 5-ft. intersection from 95 ft. to 100 ft. grading 27.7% fluorite and 0.50 oz. silver; and a 25-ft. intersection from 185 ft. to 210 ft. grading 19.16% fluorite and 0.11 oz. silver.

Proven reserves, based on work up to 1988, were previously reported at about 1.8 million tons grading 14% fluorite and 3 million tons grading 4.95 oz. silver. Silverspar expects to receive a prefeasibility report on the property in mid-July and hopes to announce an updated reserve estimate shortly. The company is in the process of raising up to US$10 million through a private placement of exchangeable promissory notes. The notes are exchangeable into a total of one million units, each consisting of a common share and a warrant. The warrant will give the holder the right to purchase an additional share of the company at US$11 per share.

Silverspar estimates the total cost to bring the mine into production, including feasibility work, at about US$21 million; equivalent to the gross proceeds of the proposed issue assuming it is fully subscribed and all warrants are exercised.