Southern Silver expands new zone at Cerro las Minitas

VANCOUVER — The last six months of drilling have been a game changer for Southern Silver Exploration (TSXV: SSV; US-OTC: SSVFF) at its Cerro las Minitas silver-lead-zinc project, 70 km northeast of the city of Durango, Mexico, with the discovery of an open-ended, 600- by 800-metre skarn mineralization zone.

Drill intercepts from the zone, called the Skarn Front, returned 9.2 metres of 220 grams silver per tonne, 0.3% copper, 3.6% lead and 5.4% zinc; and 8.7 metres of 288 grams silver, 2% copper, 0.8% lead and 1.2% zinc.

“The zone is well mineralized, and it looks like it will … add to the project’s metal endowment,” Robert Macdonald, Southern Silver’s vice-president of exploration, tells The Northern Miner during a phone interview.

Southern Silver recently drilled 13,000 metres at Cerro las Minitas and expects to provide a resource update early next year that would include the Skarn Front.

Mineralization at the Skarn Front is similar to the project’s two main deposits, Blind and El Sol, except it has a different geometry.

Blind and El Sol occur along steeply dipping dikes that spring off the project’s central intrusion at depth, whereas the Skarn Front is more shallow dipping and occurs along the edges of the central intrusion.

The company found Blind and El Sol in 2011, during a drill campaign that targeted induced-polarization geophysical anomalies beyond the central intrusion.

In March 2016, the company reported that Blind and El Sol contain 3.7 million indicated tonnes of 305 equivalent grams silver (90 grams silver, 0.05 gram gold per tonne, 2.3% lead, 2.5% zinc and 0.1% copper), while inferred resources add 6.6 million tonnes of 363 equivalent grams silver (82 gram silver, 0.17 gram gold, 1.6% lead, 4.3% zinc and 0.2% copper). Inferred resources include the Santo Nino mineralized zone along the central intrusion’s western margin.

Southern Silver found the Skarn Front while drilling the project’s Blind Shoulder target, a zinc-rich blanket of skarn mineralization found along the edges of a flat-lying intrusion at depth.

“The Blind Shoulder zone ended up being a ledge we traced for several hundred metres, but it steepened up and wrapped around the northern edge of the intrusion. It didn’t go where we speculated it might, but we followed the mineralization to the Skarn Front,” Macdonald says. “The edges of these intrusions have irregular surfaces. When you go down the edge it’s almost like little knuckles forming.”

The recent drilling also hit an extension of the Blind deposit, with a 12.5-metre intercept of 154 grams silver, 2 grams gold, 3.2% lead and 3.9% zinc.

He says the company will sit down with private company and 60% partner, Electrum Global Holdings, to discuss whether to advance the project towards a preliminary economic assessment or continue with resource expansion.

The company is also advancing its newly acquired Biznagas and Los Lencho properties, contiguous to Cerro las Minitas, which were staked in May. The claims are being explored for epithermal systems, similar to the productive veins at Avino Silver and Gold Mines’ (TSXV: ASM; NYSE-MKT: ASM) Avino silver-gold-copper mine, 14 km west, and Hecla Mining’s (NYSE: HL) gold-silver San Sebastian mine, 10 km east.

“We’re finding quartz and rhyolite float across the property, and identified several mineralized trends throughout the boulder train with good elevated gold, silver and pathfinders that could indicate an underlying epithermal system,” Macdonald says.

Float samples collected from Biznagas and Los Lencho have returned anomalous gold and silver in three clusters along a 7 km transect, as well as other smaller target areas. Macdonald says a drill campaign would begin within the next few months.

“There have been a lot of great things in this recent drill program,” Macdonald says. “Everything looks encouraging, and we expect to have a busy fall.”

Southern Silver closed the first tranche of a $5-million financing on June 13. The brokered private placement consists of 12.5 million units at 40¢ per unit. Each unit contains one warrant, with each warrant exercisable within three years at 55¢ per share.

Shares of the company have traded within a 52-week range of 26¢ and 60¢, and closed at 38¢ at press time. The company has 93.6 million shares outstanding for a $36-million market capitalization.