Mexican Silver Mines Locks Down Historic Districts

Monterrey, Mexico — As one of the latest pure silver plays on the block, Mexican Silver Mines (MSM-V, MSMZF-O) has taken a different regional focus that may give it a serious leg up over the many other explorers scouring traditional areas of Mexico for its bounty.

Having spent about a year-and-a-half putting together a 1,300-sq.-km property package in the historic Eastern Silver Belt, north of Monterrey, in Nuevo Leon state, the company is confident in its potential.

Through a reverse-takeover transaction, Mexican Silver Mines pulled in more than 1,300 sq. km of land and now controls several historic silver districts with production dating back some 250 years to the Spanish colonial era.

Despite the abundant past workings littering the projects, the ground has seen next to no modern exploration.

“No one else has gone in and explored these districts, there’s not a single drill hole in them,” says Michael Thompsen, Mexican Silver Mines’ geological consultant.

The region has a history of very rich, bonanza-grade silver mineralization in carbonate-hosted deposits, with grades as high as several thousand grams silver per tonne recorded, along with associated high-grade lead and zinc values.

“We know the mineralization is there,” Thompsen says. “This isn’t raw reconnaissance that we think maybe there’s silver out there somewhere — we know significant silver has been mined from every one of these concessions.”

Many companies have had success recently by exploring near and beneath past workings in Mexico.

The properties are located in the far northeastern area of Mexico’s Sierra Madre Oriental mountain belt and host a thick Cretaceous limestone suite that has undergone compressional deformation to produce an anticlinal-synclinal sequence. The anticlines form an extensive series of elongate carbonate ridges trending roughly northwest-southeast, exposing the favourable host rock for silver mineralization.

A pair of Tertiary intrusive clusters in the region was the main heat engine driving the mineralizing fluids into the limestones, forming carbonate replace-type deposits (CRDs). The main intrusive cluster in the northern area sits near First Majestic Silver’s (FR-V, FRMSF-O) La Encantada mine, while Mexican Silver’s holdings are within the influence of the southern intrusive cluster.

Mexican Silver has broken its sizable land package into three concessions: Anillo de Fuego, Providencia and Ral.

Anillo de Fuego was initially staked to target favourable geology and was only thought to have a few prospects; subsequent investigations “rediscovered” much more significant historic showings along the anticlinal crest of limestones that forms the Mamulique mining district. It turns out mineralization extends for at least 10 km along strike and significant underground workings are evident in a recently acquired map set from 1982.

Mamulique mineralization is actually visible in a road cut on the main highway from Monterrey to Laredo, Texas — but only as a thin replacement horizon in the carbonates. The company describes the mineralization as “leaking off the main district.”

Maps of the Santo Nino mine show historic development of stacked mantos deposits in the limestone sequence. The Mamulique system has strong lateral fluid flow along preferential horizons and shows thickening at, or near, anticlinal crests. There are also zones of very high-grade zinc mineralization.

The company says it originally underestimated Mamulique’s significance, but has since made it a higher priority target, now ranking it third. The junior will study a recently discovered old report to help it establish the extent of past mining and evaluate potential remaining mineralization.

Vallecillo district

Farther north is the company’s Providencia concession, with extensive historic Spanish workings centred on the small town of Vallecillo.

Multiple mines in Vallecillo district targeted the CRD mineralization, including some pipes and high-angle structures, with significant tonnage extracted. The workings extend from roughly 5 metres depth to about 100 metres (at the Delores mine), and along 4 km of structure. Production from the camp is estimated at about 15 million oz. silver.

Ranking Vallecillo as its second priority, Mexican Silver recently began an 8-hole drill program on the project, first testing the Delores mine area.

The junior’s very first drill holes were recently completed at its La Blanca project, on the northern portion of the Providencia concession.

Historic mine workings at La Blanca are located in an area underlain by a claystone cap-rock — not an ideal host rock for silver-lead-zinc mineralization. However, trenching turned up massive galena carrying silver grades in excess of 4,000 grams, in narrow, high-angle structures.

Mexican Silver believes mineralization could be leakage from depth, with the claystone cap possibly ponding mineralizing fluids in the underlying limestone.

After its first two drill holes ended in the claystone unit, the company let the third go deep; however, only minor structurally controlled base metals were encountered, with the target limestone cut at about 300 metres depth.

La Iguana

The top target in the company’s portfolio is the La Iguana mine project, situated on its most northerly concession, Ral.

La Iguana, an underground silver-lead-zinc mine that operated a couple of hundred years ago, employed a workforce of about 5,000 at its peak. Grades at the mine were reportedly very high — prompting the Spanish government to post a tax collector on-site at the time. However, a major fire forced La Iguana to close before it was mined out.

With intrusives outcropping on surface, the old mine has a much more complex geology compared with other areas of the region. Both CRD and skarn-contact metamorphosed mineralization has been sampled.

With the La Iguana workings generally horizontal — having targeted the flat-lying mantos zones — Mexican Silver Mines sees potential for additional mineralization at depth and plans to drill to establish a resource estimate.

The company is hunting for the “Three 10s” — a deposit with 10 million tonnes, an average grade of about 10 oz. silver per ton (340 grams silver), plus a 10% combined lead-zinc value.

Having recently closed almost $13 million in financings, the company has earmarked about half the funding for exploration of its current properties, and the rest for acquisitions.

“We’ve got a second-stage program looking to acquire a production situation here in Mexico,” says Feisal Somji, company president and CEO.

Once that happens, the company would bring in the “capital and expertise to increase the production rates and the resource.”

Shares of the Mexican-focused silver hunter recently traded at around $1.10, giving the company a $44-million market capitalization based on its 40 million shares outstanding. The stock has a 52-week trading range of 70-$2.25.