Vancouver – Last fall Aura Silver (AUU-V) and joint-venture partner Intrepid Mines (IAU-T, IAU-A) delayed a drill program at the Higo Blanco project in Oaxaca, Mexico, to better identify drill-targets by conducting IP and resistivity tests.
The wait appears to have paid off.
The joint-venture hit significant gold and high-grade silver in its first three drill holes of 2009, news that catapulted Aura Silver’s share price by more than 200% at presstime, up 25¢ to 34¢.
The drilling confirmed the two companies’ expectation of zonated gold and silver mineralization. Hole 1 hit 30 metres starting from surface grading 0.5 grams gold per tonne and 15.39 grams grams silver per tonne in the Mescal vein system.
In the adjacent, and largely silicified carbonates, hole 2 hit 58 metres grading 65 grams silver including as much as 1 metre grading 743 grams silver. Hole 3 bettered the score intercepting 34 metres grading 0.13 grams gold and 211.7 grams silver including a 5 metre section grading 1,077 grams silver. Respectively the intercepts in hole 2 and 3 started 14 and 85 metres downhole.
The joint-venture is testing the Mescal vein area in the hopes that it represents a feeder zone of even greater mineralization at depth. Gold is typically hosted in the vein system and silver in the silicified carbonates, also known as the jasperoid zone.
At present the 50-50 joint-venture partners are drilling within the Higo Blanco structural corridor to the southeast.
The partners have an option to earn a 70% stake in two concessions totalling 13,724 ha. which contain Higo Blanco from a subsidiary of Pan American Silver (PAA-T).
The agreement, entered into in 2006 by Intrepid (Aura Silver since earned its 50% of Intrepid’s option), calls for Intrepid to spend US$4 million over five years on exploration and pay US$790,000 to Pan American. Pan American has a back-in right for 40% of the total stake if, within the five year option term, the property gets a measured and indicated resource of 50 million oz. silver or more.
If that occured and Pan American exercised the back-in right it would hold a 70% stake in the project. To retain the back-in stake, however, Pan American has to pay all expenditures on the property over the following four years and those expenditures have to come in at three times what Aura Silver and Intrepid spent on the property up until that point.
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