In August 2010 Caracle Creek International Consulting Inc. of Toronto, Canada, completed an updated NI43-101 compliant independent resource estimate for the Nieves silver property.
Concordia and San Gregorio vein systems
Estimated mineral resources1
Vein |
Zone |
Classification |
Tonnes |
Au |
Ag |
Au |
Ag |
|
Concordia |
La Quinta |
Indicated |
4,590,000 |
0.10 |
103.4 |
14,757 |
15,259,171 |
|
Concordia |
La Quinta |
Inferred |
10,516,000 |
0.08 |
85.5 |
27,048 |
28,907,758 |
|
San Gregorio |
North |
Inferred |
4,005,000 |
0.15 |
79.4 |
19,315 |
10,223,998 |
Nieves´ initial indicated resource of 4.5 million tonnes averaging 103.4 g/t silver (3.02 oz/ton) contains 15.26 million ounces of silver. The inferred resources at La Quinta and North total over 14.5 million tonnes averaging 83.8 g/t silver (2.45 oz/ton) containing an additional 39.1 million ounces of silver.
The Caracle Creek report concludes that the resource displays strong continuity along strike and down dip and that mineralization continues beyond the extent of current drilling. The report recommends additional drilling to the west and east along both the Concordia and San Gregorio veins.
Resource Estimation Methodology
The mineral resource estimate for the Nieves Property was completed by independent consultant Michelle Stone, P.Geo., Caracle Creek International Consulting Inc., using accepted, industry standard methods that conform with National Instrument 43-101. The resource model was been developed using Gemcom Surpac (v6.1.3).
The resource models for the La Quinta zone on the Concordia vein and the North zone on the San Gregorio vein have been generated from a database containing a total of 52 and 11 drill holes, respectively. Blocks were classified as Indicated where the average distance between sample pairs was less than 60 meters. Material was classified as Inferred if the distance between sample pairs was less than 180 meters.
Drill hole samples were analyzed for silver and gold at ALS Chemex in Vancouver. All sample results were monitored with an appropriate QA/QC program and passed the quality checks. Bulk density was measured on core and pulp samples through the mineralized zone by ALS Chemex. The SG used to calculate the tonnage was assigned to each model block using a mathematical relation of measured grade to SG.
Sample data has been composited to 2m intervals. The presence of potential outlier sample data has been evaluated and no top cuts have been applied for silver or gold. The grade of blocks measuring 10m by 10m by 2m were estimated using inverse distance squared.
Geophysics
To date, 13 IPR (induced polarization/resistivity) lines have been completed over the Concordia and San Gregorio veins at 200 meter intervals. Results are preliminary but indicate that the Concordia and San Gregorio are two separate veins, not fault offsets of the same vein; and that strong anomalies along strike to the east and west on both veins have not been drilled. Additional IPR in progress on the Santa Rita and California veins should be completed by mid-August.
Metallurgical Testing
G&T Metallurgical Testing Ltd. of Kamloops, B.C. completed a preliminary metallurgical assessment on a 99 kg composite sample of coarse rejects from the recently completed core drilling program. The sample had an average grade of 79 g/t silver, a specific gravity of 2.74 and a Bond ball mill work index of 10.8 kWh/tonne (moderately soft rock). Open circuit flotation testing recovered 86% of the silver into a final concentrate assaying 2.3 kg/tonne silver.
The Company is confident that closer-spaced drilling within the currently defined resource will demonstrate continuity of high-grade zones that were difficult to constrain in the current model. Moreover, the chances of significantly expanding the resource are excellent, considering that the current resource estimate covers only one-third of the Concordia vein, just one of several veins with high-grade mineralization that occur on the property.
In April 2011, it was announced that the remaining nine core holes (2,574 meters) completed in January-February 2011 extended mineralization along all three veins at the property, , and identified a zone containing narrow intervals of extremely high-grade silver on one of them.
- California vein: One additional hole (QTA 137), completed 100 meters east of all previous drilling, intersected 19.0 meters of 104.0 g/tonne silver (3.0 oz/ton) beginning at a depth of 77 meters. This intercept includes two 0.1 meter intercepts of extremely high grade silver (+170 oz/ton). The California vein has now been traced in drill holes for over 400 meters and is open to the east. Additional drilling and geophysics will be necessary to track its possible eastward continuation.
- Gregorio North vein: Five additional holes were completed.Two holes (QTA 135, QTA 138) intersected the vein 100 and 200 meters respectively further to the east, where mineralization appears to weaken. Hole QTA 132, drilled 50 meters south of QTA 114, intersected 54.1 meters averaging 37.4 g/tonne silver (1.1 oz/ton) beginning at a depth of 138 meters. Holes QTA 133-134, drilled 50 meters south and north of QTA 118 on the western end of the vein, intersected only narrow intercepts of mineralization and appear to limit further significant extensions to the west.
- Concordia West vein: Three additional holes were completed. Holes QTA 136, drilled about 200 meters east of the La Quinta zone, intersected a 6.7 meter interval beginning at 84 meters averaging 93 g/t silver (2.7 oz/ton) and 0.23 g/t gold which will require follow up drilling. Holes QTA 131 and QTA 139, drilled west of the La Quinta zone, did not encounter significant mineralization.
An evaluation of all results is in progress to develop additional drill targets. Data review and confirmation is in progress which will lead to an updated NI43-101 resource calculation and a preliminary economic assessment.
Core samples were prepped and analyzed by ALS Chemex in Zacatecas, Mexico, and Vancouver, B.C., respectively. Property-specific standards were routinely submitted with each batch of samples. Samples were initially run using a conventional 35-element ICP analysis with an aqua regia digestion process. A 30-gram fire assay with gravimetric finish for gold and silver was run on all samples. ICP results are reported for silver values up to 100g/t; fire assay results are reported for silver assays > 100g/t. Samples containing more than 1% lead, copper or zinc were analyzed using AA with aqua regia digestion.
