Quaterra confirms Nieves silver, gets Goldcorp backing

VANCOUVER — Quaterra Resources (QTA-V, QMM-X) has hit high-grade silver at its 50%- owned Nieves project in Mexico’s Zacatecas state through infill drilling designed to shore-up an initial resource estimate.

The Nieves project covers roughly 65 sq. km over 16 concessions and is about 90 km north of Fresnillo, Mexico’s largest silver mine.

In early 2009 the company, along with equal private partner Blackberry Ventures 1, released an estimate based on drill holes spaced 50 metres apart. The latest 6,000-metre, 29-hole drill program punched holes on 25-metre spacing between existing holes to confirm continuous mineralization.

Quaterra targeted the core area of the known deposit for 200 metres along strike and up to 200 vertical metres below surface. The company drilled exclusively in the La Quinta stockwork along the Concordia-Gregorio vein.

On the western edge of the targeted area, hole 97 cut 49 metres averaging 135 grams silver per tonne starting at 72 metres depth, including 7.3 metres grading 519 grams silver. Hole 100, just east of 97, hit 62.2 metres grading 101 grams silver from 70 metres downhole. Hole 108, on the eastern edge of the core area, intersected 48.1 metres averaging 92 grams silver starting at 84 metres.

The company released in February the results of the first half of the infill program, which also hit high-grade silver. Highlights include hole 84 that cut 32 metres carrying 212 grams silver, hole 89 that returned 23 metres grading 272 grams silver and hole 94 that intersected 42 metres averaging 127 grams silver.

Speaking of the project at the Wall Street Analyst Forum in New York City, Quaterra’s chief executive Thomas Patton said: “What we’re excited about now is that we have identified a zone with a true thickness of 20 to 60 metres that we think has open-pit potential in addition to the high-grade underground potential that we’ve got already.”

The company’s next steps are to update the resource and then move to a scoping study that will look at both open-pit and underground options, as well as conduct further exploration. Drilling to date shows that mineralization continues along strike and down dip.

The current resource at Nieves, based on a 400-metre section of the Concordia-Gregorio vein, is 2.9 million indicated tonnes of 110.23 grams silver and 2.3 million inferred tonnes at 96.56 grams silver, using a 60-gram cutoff.

Quaterra is active at other properties throughout North America and recently secured funding to explore its other Mexican projects. The company has signed an agreement with Goldcorp (G-T, GG-N) whereby the major will provide US$10 million in exploration funding for Quaterra’s Mexican projects. In return, Goldcorp has the option to acquire a 65% stake in any of Quaterra’s Mexican projects, with the exception of Nieves, by spending US$2 million on advanced exploration and by completing a feasibility study.

“It’s an incredible opportunity for us,” said Patton of the deal. “It’s nice for us to be able to concentrate on what we do best, which is exploration, and know that if we’re successful, we’ve got a major go-to gold company like Goldcorp to back us up.”

Patton is no stranger to Goldcorp. He was chief executive of Western Silver between 1998 and 2006, during which time his exploration team discovered the Peasquito deposit. Western Silver was then bought out by Glamis Gold, which in turn was scooped up by Goldcorp. Peasquito is now one of Goldcorp’s biggest mines, while the exploration team that discovered it, is still with Patton.

Quaterra’s share price climbed 12¢ on the drill results to close at $1.78. The company has a 52-week trading of 53¢-$2.50 per share and 115 million shares outstanding (147 million fully diluted).