We are providing an update from Silvermex, a company I personally own and we
have recommended to paid subscribers of The Morgan Report. Their recent
acquisition of the Rosario Mine combined with the new management team from Hecla
and Silver Standard has strengthened the company considerably.
The
company’s flagship Rosario/San Marcial project has significant resources and
historic reserves which are high-grade and development plans are in work. The
project has 3 past producing mines within 5 miles of each other and has
infrastructure in place, including; a tailings dam, water (30 year water use
permit), 60 km - 33 KV power line, a 20 year surface rights agreement, offices,
shops, 120 man camp and multiple buildings. This infrastructure could save
Silvermex $30 million in development costs and substantially reduce development
time..
Past
drilling results are above average in both grade and width, but as we are
required to state, past results do not indicate future performance, current
results are outlined in this update and it is to your advantage to read and
understand this.
One of the
keys to buying a speculative mining company is the people, you read this from
me, Doug Casey and most in this industry. The new Board of Directors and
Management team at Silvermex is impressive to say the least . It consists of
former and current Hecla Mining and Silver Standard executives. These
include; Arthur Brown, the past CEO and Chairman of Hecla Mining as Silvermex's
Executive Chairman and Michael Callahan, past Director and President of Hecla
Mining's Venezuelan operations and VP of Business Development as Silvermex's
President, Joe Ovsenek, Executive VP of Silver Standard Resources, Director, Ken
McNaughton, VP Exploration of Silver Standard, Director and Rob Fraser, past VP
Exploration of Hecla as Silvermex's VP of Exploration.
The company
is trading near a level recommended to our paid subscribers. Silvermex and many
others will be discussed in the July edition of the Morgan Report. We are
providing the "matrix" of Silver companies comprised of explorers, junior and
senior producers. We do NOT cover every company claiming to be a silver company or silver explorer and may have left out some
that you either own or have heard about, regardless this is an issue that goes
well beyond similar reports sold by others for far more than the cost of a full
year's subscription to the Morgan Report.
Basically, you need to read the discussion to fully understand our logic and
thinking.
Silvermex is
listed on the Toronto Venture Exchange (TSXV:SMR) and has a relatively low
market cap of $27 Million. Silvermex is well-funded with over $5 Million in the
treasury and intends to become a mid-tier silver producer within the next 24
months. Christopher Ecclesone of Hallgarten and Company has just initiated
coverage on Silvermex with a 12 month target price of $0.9.
David Morgan
Founder
Silver-Investor.com and Home of The Morgan Report
Silvermex Provides
Update on Exploration and Project Developments at Rosario
Silvermex Resources Ltd. is pleased to provide a corporate update and
progress report on its 2010 project exploration and development programs. The
company is currently focusing its efforts on the newly consolidated Rosario/San
Marcial silver project in south eastern Sinaloa State, Mexico.
This
16,279 hectare land concession hosts 2 past producing silver/gold/lead/zinc
mines. The recently acquired Rosario Project is located just 5 km's from the
company's San Marcial Silver Project. The strategic acquisition of this project
provides Silvermex with a significant land position, 2 past producing mines and
extensive infrastructure, including; 330 hectares of land owned fee simple, a 20
year surface rights agreement in good standing, 30 year water use permit,
underground workings, tailings dam, water, 60 km - 33 KV power line, offices,
shops, 120 man camp and multiple buildings.
The previous owner of Rosario
made significant investments in the property. Improvements include the upgrading
of electrical substations, mine dewatering and rehabilitation, exploration,
mapping, 3D modeling, camp and building renovations, and the detailed
engineering of an 800 tonne per day mill designed to be installed on the
existing foundations and structures. This existing infrastructure could
significantly reduce the development time and capital to restore production.
Silvermex's Mexican and Canadian legal representatives and accountants have
recently completed the necessary restructuring and auditing and documentation of
the company's newly acquired Mexican subsidiaries. The company has also
completed the examination, assessment and auditing of all of the company's real
estate holdings and mining concessions and the preparation and submission of all
requisite permits and documentation.
Silvermex's new geological team,
headed by Robert Fraser, continues the examination and assessment of thousands
of historical data points and reports from previous operators which has lead to
a better understanding of the geological structures and deposits. The
information available includes; geological reports and maps, satellite imagery,
assays, past production records, drill logs and sample results, geophysical
reports, resource estimates, resource block models and metallurgical tests. The
compilation of all of this data will allow the Company to prepare more accurate
and comprehensive resource block models.
Silvermex management has
formulated an aggressive plan of action over next 2 quarters, which includes;
drill programs, resource modeling, upgraded resource estimates, advanced
metallurgical analysis, drifts and cross-cuts, bulk sampling, mine plans,
engineering, infrastructure improvements, environmental permit applications and
the preparation of a Preliminary Economic Assessment.
The company is well
funded for the planned exploration and development programs with approximately
$5 million in working capital.
San Marcial Silver Project
San Marcial currently has an NI 43-101 indicated mineral resource of 3,755,893
tonnes grading 149.20 g/t Ag, 0.36% Pb and 0.67% Zn. Indicated resource contains
18.0 million ozs silver, 55.3 million lbs of zinc (Zn) and 29.9 million lbs of
lead (Pb) and an inferred mineral resource of 3,075,403 tonnes grading 44.21 g/t
Ag, 0.29% Pb and 0.51% Zn. This inferred resource contains 4.4 million ozs
silver, 34.7 million pounds of zinc (Zn) and 19.5 million lbs of lead (Pb).
The current mineral resource estimate is based on a total of 4,884 meters of
core drilling in 27 holes and extensive surface trenching completed by both
Silvermex and previous operators. The majority (80%) of the silver resource is
in the measured and indicated category.
Past drilling programs have
intersected high grade silver near surface and over large widths. Selected drill
intersections include:
|
Hole
|
From |
To |
Interval |
Ag g/t |
Pb ppm |
Zn ppm |
|
SM-2
|
0.39 |
12.00 |
11.61 |
350.20 |
2,055 |
5,010 |
|
SM-3
|
0.20 |
15.00 |
14.80 |
227.00 |
1,511 |
3,955 |
|
SM-4
|
6.00 |
63.00 |
57.00 |
235.00 |
3,095 |
4,715 |
|
SM-5
|
1.40 |
21.00 |
19.60 |
282.00 |
1,737 |
2,335 |
|
SM-5
|
33.00 |
36.00 |
3.00 |
490.00 |
242 |
1,530 |
|
SM-9
|
30.00 |
44.50 |
14.50 |
540.00 |
1,874 |
3,607 |
|
SM-11
|
114.00 |
132.00 |
18.00 |
419.00 |
3,722 |
6,889 |
|
SM-12
|
99.30 |
100.30 |
1.00 |
3,600.00 |
250 |
6,260 |
|
SM-13
|
50.00 |
73.20 |
23.20 |
621.00 |
4,911 |
8,493 |
|
SM-17
|
169.47 |
172.52 |
3.05 |
215.00 |
1,952 |
3,155 |
|
SM-18A
|
38.82 |
63.90 |
25.08 |
175.00 |
3,278 |
5,127 |
|
SM-20
|
102.47 |
104.47 |
2.00 |
366.50 |
4,421 |
5,600 |
|
SM0808
|
98.55 |
118.00 |
19.45 |
234.40 |
6,410 |
13,365 |
|
SM0812
|
21.95 |
26.75 |
4.80 |
346.00 |
5,258 |
9,319 |
|
SM0812
|
32.75 |
34.75 |
2.00 |
346.00 |
2,336 |
14,297 |
|
SM0812
|
36.83 |
43.80 |
6.97 |
365.50 |
1,864 |
2,542 |
Previous resource
estimation by Silver Standard Resources Inc. outlined an Inferred Mineral
Resource at San Marcial of 2.31 million tonnes at a grade of 191.79 g/t silver,
0.32% lead and 0.66% zinc, containing 14.26 million ounces of silver, 33 million
lbs of zinc and 16 million lbs of lead.
Preliminary high-grade resource
modeling using a 180 g/t Ag cut off, estimates that the San Marcial project
currently hosts a near-surface, high-grade Indicated resource of approximately
1.13 million tonnes grading 310.20 g/t silver, 0.36% lead and 0.67% zinc. This
estimated high-grade resource is the primary focus of the current Preliminary
Economic Assessment.
The Company has recently completed an extensive
trenching and sampling program at San Marcial which has confirmed the continuity
of the high-grade vein structures at surface and has been instrumental in
filling in gaps in historic data. The results of the recent work have given
management an increased understanding of the geologic controls and have assisted
in development of the current drill plan. This successful trenching program
provided numerous high grade results, 18 samples assayed over 300 g/t silver.
Highlights include; 520.9 g/t silver across 9.70 meters and 1,770 g/t silver
over 1.75 meters.
Selected channel sample results include:
|
Width (M) |
Ag g/t (Avg) |
Pb % |
Zn % |
|
11.95 |
150.8
|
0.13
|
0.44
|
|
6.65 |
673.7
|
0.18
|
0.33
|
|
9.7 |
520.9
|
0.29
|
0.46
|
|
8.35 |
496.5
|
0.49
|
0.37
|
|
10.8 |
258.9
|
0.17
|
0.46
|
|
2.0 |
961.00
|
0.18
|
0.08
|
|
2.0 |
1,248.00
|
3.27
|
4.18
|
|
1.8 |
930.00
|
2.54
|
0.91
|
|
1.2 |
779.00
|
2.82
|
1.04
|
The company has
initiated a 3,000 meter HQ core drilling program at San Marcial to expand and
upgrade the classification of the existing resources and to test for continuity
along strike and down dip. The company will also collect material for advanced
metallurgical testing and formulate geotechnical data on the immediate hanging
wall, the mineralized zone and the adjacent footwall to determine an appropriate
mine plan for the economic extraction of the silver bearing resource.
This new information will be combined with the rework of the existing data to
develop a new block model and prepare an updated NI 43-101 resource estimate.
This new model, along with a comprehensive mine plan and the results of the
metallurgical test work will be incorporated into a Preliminary Economic
Assessment which is scheduled for completion in Q4 of this year.
Preliminary metallurgical testing on the San Marcial project returned
encouraging results. Five oxide and sulphide samples from holes SM-2, SM-4 and
SM-5 were sent to ALS Chemex in Reno NV for column leach tests. Recoveries from
all columns exceeded 80% over a 72 hour leach period. Additional metallurgical
test work were completed on four samples composed of drill core rejects
submitted to Process Research Associates Ltd. in Richmond, B.C. Recoveries from
flotation and cyanidation ranged from 83 to 93 percent.
The company has
recently negotiated and signed a 20 yr surface rights agreement for the
exploration and potential future production at the Company's San Marcial land
concession on similar terms to that of the Rosario surface rights agreement.
Plomosas Mine
Historic production on the Rosario property by Grupo
Mexico, the prior operator, averaged 600 t/d from 1986 to 2000, during which a
total of 2.5 million tonnes of ore were produced which averaged 190.5 grams per
tonne (g/t) silver, 0.92 g/t gold, 2.02% zinc and 2.38% lead.
In 2001,
Grupo Mexico reported the Plomosas Mine has existing historic reserves and
resources of 638,756 tonnes grading 136 g/t silver, 3.21 % zinc, 2.23 % lead,
and 1.05 g/t gold. The Mine has extensive development and has been partially
refurbished by the previous operator in preparation for an 800 tpd operation.
The mine has been dewatered and has undergone partial rehabilitation.
The
reader should be cautioned the historic reserves and resources Plomosas do not
conform to National Instrument 43-101 for reporting purposes; as such the
Company is not treating these historic estimates as current reserves or
resources. These estimates should not be relied upon until they have been
verified by further due diligence and by the Company's "Qualified Person".
Extensive data collection, underground mapping, control surveys, resource
modeling and preliminary exploration programs have been completed by the prior
operator. An extensive underground channel sampling program has been completed
at Plomosas which yielded positive results with numerous high grade
intersections of gold, silver, lead and zinc.
Selected channel sample
results include:
|
Width (m) |
Au g/t |
Ag g/t |
Pb % |
Zn % |
|
2.00 |
25.40 |
611.00 |
2.60% |
11.40% |
|
2.00 |
18.00 |
379.00 |
0.80% |
5.50% |
|
2.00 |
41.00 |
123.00 |
3.10% |
2.70% |
|
0.75 |
36.40 |
1,536.00 |
17.90% |
11.30% |
|
2.00 |
2.90 |
44.00 |
37.70% |
26.30% |
|
0.35 |
2.50 |
52.00 |
35.60% |
27.10% |
|
1.85 |
1.70 |
43.00 |
7.80% |
23.70% |
|
1.70 |
1.30 |
36.00 |
10.90% |
15.20% |
|
0.50 |
4.10 |
85.00 |
28.60% |
32.30% |
|
1.50 |
2.90 |
54.00 |
14.90% |
20.70% |
|
2.00 |
2.60 |
63.00 |
25.50% |
20.30% |
Future plans at
Plomosas include the preparation of an NI 43-101 resource estimate and the
continued exploration at depth and along strike of the existing known structure.
The company will also collect material for advanced metallurgical testing and
develop a comprehensive mine plan for the potential extraction of the resource.
San Juan Mine
At the San Juan Mine, 3 kms west of the Rosario mine
site, Grupo Mexico reported historic reserves and resources of 256,756 tonnes
grading 329.3 g/t silver, 3.73% zinc, 1.69% lead, and 0.19 g/t gold.
The
San Juan workings consist of a main adit approximately 5 meters in width, 5
meters in height and 250 meters long and a crosscut extending easterly for 150
meters, plus a partially flooded ramp with a further 150 meters development. The
mineralized structure averages 3.0 m in width and has been traced down dip for
approximately 150-200 meters. A decline has been driven into the San Juan zone
and has been tested over a vertical distance of 40 meters with the zone still
open to depth.
Extensive data collection, underground mapping, control
surveys and exploration programs have been completed at San Juan by previous
operators. A recent surface and underground channel sampling program has been
completed which yielded very positive results.
Selected channel sample
results include:
|
Width (M) |
Au g/t |
Ag g/t |
Pb % |
Zn % |
|
1.5
|
-
|
994.00
|
0.18
|
0.18
|
|
2.0
|
0.17
|
982.00
|
0.02
|
0.18
|
|
1.3
|
0.13
|
714.00
|
0.05
|
1.40
|
|
2.0
|
0.43
|
988.00
|
0.01
|
0.70
|
|
1.6
|
0.37
|
1,735.00
|
1.12
|
2.00
|
|
2.0
|
0.10
|
961.00
|
0.18
|
0.08
|
|
2.0
|
0.36
|
1,248.00
|
3.27
|
4.18
|
|
1.8
|
0.08
|
930.00
|
2.54
|
0.91
|
|
1.2
|
0.96
|
779.00
|
2.82
|
1.04
|
The company will
be initiating a 3,000 meter HQ core drill program at San Juan in July 2010 to
expand, define and upgrade the current historic reserve and resource and prepare
an updated NI 43-101 resource estimate. The company is currently collecting a
representative sample of material for advanced metallurgical testing.
The
reader should be cautioned the historic reserves and resources at San Juan do
not conform to National Instrument 43-101 for reporting purposes; as such the
Company is not treating these historic estimates as current reserves or
resources. These estimates should not be relied upon until they have been
verified by further due diligence and by the Company's "Qualified Person".
The outlined programs are currently on schedule and on budget. The company
expects to complete the preliminary economic assessment report by Q4 of this
year. Management is confident that the Rosario project will continue to deliver
positive results this year and ultimately provide shareholders with increased
value and long term growth.
The Company also announces it has granted
1,500,000 incentive stock options at $0.32 per share with a five year term
expiring on June 21, 2015. The foregoing options are subject to the terms of
Silvermex's incentive stock option plan. The grant of the incentive stock
options is subject to receipt of all required regulatory approvals including
those of the TSX Venture Exchange.
About Silvermex
Silvermex Resources is a well funded exploration and development company focused
on developing the recently consolidated Rosario Mining Camp in south eastern
Sinaloa, Mexico. This mining concession consists of 2 past producing mines and
numerous known deposits. The project has significant resources and historic
reserves with extensive production related infrastructure. Silvermex is led by a
highly experienced and successful team, comprised of top executives from leading
corporations in the silver mining sector.
Qualified Person
Pursuant to National Instrument 43-101, Robert Fraser, M.Sc., P.Geo is the
Qualified Person (QP) responsible for the disclosure in this news release.
On Behalf of the Board of Directors of
Silvermex Resources Ltd.
Duane Nelson
CEO & Director
For Further information, contact:
Duane Nelson
Director, Chief Executive Officer
Vancouver, BC, Canada
Tel: 604-512-8118
duane@silvermexresources.com
Neither TSX Venture Exchange nor
its Regulation Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of
this release.
This News Release contains forward-looking statements.
Forward looking statements are statements which relate to future events. In some
cases, you can identify forward-looking statements by terminology such as "may",
"should", "expects", "plans", "anticipates", believes", "estimates", "predicts",
"potential", or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors that may cause our actual results, level
of activity, performance or achievements to be materially different from any
future results, levels of activity, performance, or achievements expressed or
implied by these forward-looking-statements. Management has assumed that these
will be our major projects going forward. Risks include that we are unable to
satisfy environmental or other regulators, that we determine that our resources
are not commercially viable, or that we have difficulties due to unavailability
of labour or equipment.
While these forward-looking statements, and any
assumptions upon which they are based, are made in good faith and reflect our
current judgment regarding the direction of our business, actual results will
almost always vary, sometimes materially, from any estimates, predictions,
projections, assumptions or other future performance suggests herein. Except as
required by applicable law the Company does not intend to update any
forward-looking statements to conform these statements to actual results.