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TABLE OF CONTENTS Oct 21 - 27, 2013 Volume 99 Number 36 - 0 comments

Drills keep turning for Santacruz at San Felipe

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Santacruz Silver Mining’s (TSXV: SCZ) latest drill results show that it may be able to deliver improved grade at its San Felipe silver project in Mexico’s Sonora state. 

The results from its latest 10 holes come from drilling at three veins on the property: La Ventana, Las Lamas and Transversales.

The most impressive result was from Las Lamas, with a highlight of 7 metres in hole 15 grading 93 grams silver per tonne, 0.01 gram gold per tonne, 8.06% zinc, 0.22% copper and 0.24% lead, or 355 grams silver equivalent.

The drilling extended the strike length by 450 metres, while defining 100 metres at depth. The vein has been outlined over more than 630 metres and to depths of 250 metres.

Kwong-Mun Achong Low, an analyst with Jennings Capital, notes that the average intercept at Las Lamas is 2.9 metres grading 144 grams silver, 0.4% copper, 0.4% lead and 9% zinc.

“The silver grade is above the existing resource at Las Lamas of 108 grams silver, which itself is higher grade than the other delineated veins at San Felipe,” Low writes in his report. “We expect the silver grade of the overall resource to increase at the next update due late this year, or early next.”

San Felipe hosts a resource of 4 million tonnes grading 70 grams silver, 5% zinc, 2.77% lead and 0.28% copper. The project is located 130 km northeast of Hermosillo city, the capital of Sonora.

Las Lamas and the nearby Artemisa mine are described as contact deposits, and they had production between 1974 and 1991  of 207,000 tonnes at 298 grams silver, 9% zinc and 5.5% lead.

A highlight intercept at La Ventana was 2.8 metres in hole 4 grading 215 grams silver, 0.02 gram gold, 11.05% zinc, 1.13% copper and 4.93% lead.

Santacruz will explore the Las Lamas vein extension on strike and at depth to close the year, with the results going into its technical study at San Felipe.

“Judging from the widths, continuity, vertical orientation of the veins and strong ground conditions present at San Felipe, we expect long-hole stoping could be applied as the mining technique of choice — usually a more efficient and cheaper mining method, in our view,” Low writes.

Jennings has a “buy” rating on Santacruz, with a 12-month target price of $2.75 per share.

Santacruz shares were off a cent to $1.19 on 163,000 shares traded in on Oct. 2 — the day the drill results were released.

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