SSO signs deal for Diabillos

Silver Standard Resources (SSO-V) has inked a letter agreement to acquire Pacific Rim Mining‘s (PFG-T) Diabillos silver-gold project in Argentina.

Silver Standard can acquire the project by paying US$3.4 million in staged cash payments and share issuances by the end of 2003. The deal is subject to due diligence, a formal agreement and regulatory approvals.

The 36-sq.-km property hosts several silver-rich “high-sulphidation” epithermal occurrences, including the Oculto target, which has been drill-tested by 151 reverse-circulation and 41 diamond drill holes.

Oculto contains an inferred silver resource of 42 million tonnes averaging 70 grams silver per tonne at a cutoff grade of 42 grams silver equivalent, plus an inferred gold resource of 25 million tonnes running 1.02 grams gold at a cutoff grade of 0.7 gram gold equivalent.

Metallurgical work indicates lower-than-expected recoveries from column leach tests, suggesting that the deposit may not be amenable to heap leaching.

Barrick Gold (ABX-T) completed much of the recent work at Oculto before letting its option agreement with the junior expire in late June. Barrick had spent more than US$17 million drilling 24 diamond drill holes and 150 reverse circulation holes, including 17 diamond holes (totalling 3,010 metres) and 79 reverse circulation (19,114 metres) that define the Oculto deposit

Silver Standard says there is, “good exploration potential exists to expand the Oculto deposit to the west and to define other zones on the property.” Pac Rim believes the property has potential for additional gold-silver mineralization. Most notable is the Laderas target, which lies 500 metres north of Oculto.

The company also says that development of an open pit mining operation at the project will wait until silver prices improve.

Pac Rim says it is currently evaluating a number of new projects and remains focused on gold exploration in Central and South America.