VANCOUVER — Orex Minerals (TSXV: REX; US-OTC: ORXIF) and partner Canasil Resources (CVE: CLZ) are off to a strong start at their Sandra-Escobar silver project, 183 km northeast of the city of Durango, as the partners expand a discovery in the heart of Mexico’s most valued silver trend.
The pair have reported the latest five holes from their 17-hole maiden drill program on the property, highlighted by 33.5 metres of 328 grams silver per tonne near surface and 350 metres east of the discovery hole announced in January, which cut 43.1 metres of 359 grams silver.
Other holes collared midway returned 40.6 metres of 139 grams silver and 28.4 metres of 102 grams silver.
Ben Whiting, vice-president of exploration at Orex, tells The Northern Miner during a phone interview that it’s not every day a junior explorer makes a discovery on the first drill hole of a program.
“The prospect is different than a lot of the other silver deposits you see throughout north-central Mexico, which are often narrow veins with large vertical extents and a reddish gossan at surface,” he says, noting that the property falls within the Mexican Silver Trend, which is home to some of the world’s largest silver camps and deposits, including Fresnillo, Guanajuato, La Pitarrilla, La Preciosa, Real de Angeles and Zacatecas.
“But here, the prospect doesn’t have a gossan — the fluids were undersaturated in sulphur — so what we see now is just a grey rock that people have walked right over without looking closely,” he continues.
Whiting reckons silver mineralization on the property is related to an epithermal, structurally controlled system, but rather than penetrating the overlying rhyolitic cap, the silver-rich fluids veered laterally into a permeable volcaniclastic horizon and wove itself into a blanket of flat-lying mineralization.
“This is a stratiform silver deposit that we’re discovering, and it’s right at surface,” he says. “The silver is largely disseminated, grading 150 to 300 grams per tonne, but where there are stockwork zones that’s when you get the kilogram silver kicks.”
Sub-interval assays within the discovery hole returned 2.1 metres of 2,271 grams silver.
The partners’ first phase of drilling, totalling only 2,000 metres, covered a 500-metre strike length of the prospective horizon, which has been identified to extend for at least 750 metres at surface, and dips gently into the hillside.
The next drilling phase, which may be 3,000 metres, is planned for March, and will follow the mineralization along strike and along dip.
“We can’t get credit for discovering the prospect, that’s all Canasil,” Whiting says. “But now we’ve come to discover what kind of beast we could be looking at here.”
Canasil Resources recognized the silver prospect’s potential last year by interpreting anomalous stream sediments collected from a previous mapping program.
Vancouver-based Orex — a veteran explorer in Durango, backed by a management team recognized for discovering Coeur Mining’s La Preciosa silver-gold deposit — quickly became interested.
The partners struck a deal last September, whereby Orex can earn 55% of the property with a $500,000 payment (already completed), and by spending $2 million on work over three years.
Orex can earn another 10% for a total of 65% ownership by paying another $500,000 in cash or shares spending a further $2 million on exploration over two more years.
Whiting adds that Orex is fully cashed up to see the project through these stages. With $3.5 million already in the bank, the company expects a US$2-million payment from Agnico Eagle Mines (TSX: AEM; NYSE: AEM) as part of a joint-venture deal with the miner in March last year on the Barsele gold and base-metal property in Sweden.
Orex and Canasil’s share price has also taken quite a ride higher in light of the news, rising 75% and 300% in value since the duo made the discovery announcement early this year.
“Both of us have been taking quite a run lately — the market is receiving the information well, and that’s good news,” he says. “People talk a lot about surface deposits being few and far between and hard to find, yet here we find this beautiful one was just sitting there.”
Orex has traded in a 52-week range of 10¢ to 49¢ and closed at 42¢ at press time. It has 103.3 million shares outstanding for a $43-million market capitalization.
Canasil has traded between 3¢ to 27¢ over the past year, and closed at 23¢ at press time. It has 86.7 million shares outstanding for a $19-million market capitalization.