While investment in silver juniors has been sluggish for most of the year, Kootenay Silver (TSXV: KTN; US-OTC: COOYF) isn’t letting the malaise slow it down.
The company is closing in on its goal of outlining a 100 million equivalent oz. silver resource at its Promontorio project in Sonora, Mexico, 165 km south of Hermosillo — and it’s getting some help from gold along the way.
With recent metallurgical test work showing that 70% of the gold in the Promontorio could be extracted, the company updated its resource estimate in May and showed that the deposit was bolstered by getting gold into the mix.
The estimate divided the resource into open-pit and underground portions, with the open pit showing measured and indicated resources of 44.5 million tonnes grading 27.77 grams silver per tonne, 0.35 gram gold per tonne, 0.4% lead and 0.47% zinc for 92.4 million equivalent oz. silver. The open pit also has inferred resources of 14.6 million tonnes averaging 24.95 grams silver, 0.28 gram gold, 0.28% lead and 0.31% zinc.
The underground portion, which would be mined directly below a future pit, has a measured and indicated resource of 215,000 tonnes grading 22.89 grams silver, 0.28 gram gold, 0.4% lead and 0.55%
zinc, and an inferred resources of 1.3 million tonnes averaging 26.57 grams silver, 0.37 gram gold, 0.36% lead and 0.38% zinc.
Just a month before announcing the updated resource estimate, Agnico Eagle Mines (TSX: AEM; NYSE: AEM) made a $4.8-million investment into the company as part of its strategy to beef up its presence in Sonora state.
Prior to the Agnico investment the company had $4 million in its treasury, so it remains well financed to push ahead on resource expansion at the deposit, which hosts diatreme breccia mineralization.
With the vote of confidence from Agnico and an updated resource estimate behind it, Kootenay dove headfirst into expansion mid-year.
And just a few weeks after releasing the resource update, it has announced some of its most impressive drill results yet.
Highlight intercepts from the fifth phase of its program included 31.7 metres grading 301 grams per tonne silver equivalent and 18.4 metres grading 274 grams silver equivalent.
The results came out of two separate holes and represented some of the highest grades ever seen at Promontorio.
The holes are in a new zone where Kootenay had only modest expectations. The area is between the North East and Pit zones, and open along strike and dip. Kootenay says the zone appears to be on strike with other high-grade intercepts from the North East zone.
Kootenay updated the
market on its hydrological work and environmental baseline studies at the end of July. It says monitoring the groundwater on the property will help advance the regulatory permits and assess potential environmental impacts.
The work should yield information on possible water sources for the project, as well as what may be involved in dewatering for the planned open-pit and underground mining operations.
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