Vancouver – South American Silver (SAC-V) has released a first resource estimate on its wholly-owned Escalones copper-gold-silver project in central Chile.
Escalones is estimated to contain 420.6 million tonnes grading 0.41% copper, 61.39 parts per million molybdenum, 0.05 gram gold per tonne and 1.24 grams silver per tonne for a 0.49% copper equivalent, all based on 0.2% copper equivalent cut-off. The values translate to contained metal totals of 3.8 billion lbs. copper, 56.9 million lbs. molybdenum, 610,000 oz. gold and 16.8 million oz. silver.
The resource was based on 12,666 metres based on 30 diamond drill holes as well as 43 channel and road cuts. South American is now working on a phase 2 exploration program that will include 7,000 metres of both infill and step-out drilling with two drills mobilized.
The project sits roughly 100 km southeast of Santiago and 35 km east of the world’s largest underground copper mine, El Teniente. The project has road access and a gas pipeline that crosses the 70-sq.-km property.
2011 work included reopening road access and the camp, re-logging and sampling historic drill holes, reinterpretation of an induced polarization survey, and a property wide airborne geophysical program that the company is still working to interpret.
The Escalones project hosts a 4-sq-km area of hydrothermal alteration with coincident geophysical anomalies with copper, gold and silver in replacement-style skarn mineralization hosted in limestone and in porphyry-style mineralization. Mineralization is open to expansion laterally and at depth.
The company also continues to advance its Malku Khota silver-indium-gallium project in Bolivia, with ongoing work on metallurgy, camp construction and other pre-feasibility work. In early 2011 the company released a preliminary economic assessment that outlined a pre-tax net present value of US$704 million with a 5% discount and a 37.7% internal rate of return. The company assured investors in April that its Malku Khota project should be unaffected by proposed changes in mining legislation, though the country has yet to pass fully-revised mining laws.
As of a March 2011 resource update, Malku Khota hosts roughly 255 million tonnes grading 28.1 grams silver, 5.8 grams indium per tonne, 4.3 grams gallium per tonne, 0.02% copper, 0.07% lead and 0.04% zinc for a 43.2 grams per tonne silver equivalent.
South American’s share price was up 16¢ or 11.6% to $1.54. The company has a 52-week share price range between $1.20 and $3.35 with 100.8 million shares outstanding.
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