In the coming months, Southern Silver Exploration (TSXV: SSV; US-OTC: SSVFF) will drill up to 13,000 metres at its 265 sq. km Cerro Las Minitas (CLM) polymetallic silver project, 70 km northeast of Durango, Mexico.
Drilling will begin soon with up to 3,000 metres at the newly staked CLM West claim group before transitioning to the main CLM area in June. The program has a US$3-million budget.
A central monzonite intrusion acts as the heat pump for the mineralizing system. So far, Southern Silver has found four deposits in the main CLM area: Blind, El Sol, Las Victorias and Skarn Front. The Blind, El Sol and Las Victorias zones are near-surface, dike-replacement-style deposits located west of the central monzonite intrusion.
The Skarn Front zone is located in the halo of the central monzonite intrusion. Mineralization has been traced 1 km below surface, and the zone is open along strike and at depth. It’s the largest mineral deposit at CLM, comprising 70% of the resource. High-grade mineralization forms near the Blind and El Sol intersections with the Skarn Front.
At Las Victorias, Southern Silver will focus on a 500-square-metre area with near-surface targets. At Skarn Front, it will test a 60-metre projection along strike to the northeast.
“We see areas surrounded by higher-grade mineralization that because of the unequal spacing of the drilling were never filled in,” Southern Silver vice-president of exploration Robert Macdonald says in an interview with The Northern Miner. “Those are holes we want to fill.” The company says it could boost its resource estimate with this program, perhaps adding up 8 million tonnes, or 100 million equivalent oz. silver. CLM has 10.1 million indicated tonnes averaging 102 grams silver per tonne, 0.1 gram gold, 0.15% copper, 1.4% lead and 3.6% zinc. It also has 8.7 million inferred tonnes grading 74 grams silver, 0.04 gram gold, 0.15% copper, 0.7% lead and 4.5% zinc.
Southern Silver will look to update the resource in early 2019.
According to the company, small-scale miners have been intermittently active in the area for at least 50 years. The area’s history gets a little fuzzy before that, but the company has heard reports there may have been mining as far back as colonial times.
Historic mines are located in the skarn and hornfelsed margin of the monzonite, with shafts extending more than 200 metres below the surface. There is still small-scale mining on an inlying claim.
“That gave us early indications there was the potential for significant resources,” Macdonald says.
The project is a joint venture with Electrum Global Holdings wherein Southern Silver owns 40%, and is the operator. Freeport-McMoRan (NYSE: FCX) had an earn-in with Southern Silver, but it left after spending US$5 million. Electrum initially offered to invest directly into Southern Silver, but during the market turbulence of 2008, when the junior’s stock price was low, it invested directly into the property instead.
Electrum had to invest $5 million over five years to earn a 60% interest in the property. Roughly two years later, Electrum had earned its interest. Southern Silver spent the money on two resource estimates.
It’s a 15-minute drive by highway from the town of Guadalupe Victoria north to CLM. Guadalupe has a population of 10,000 and acts as Southern Silver’s base of operations. This is where the company gets electricity and looks first for its geotechnical people.
The company has three exploration permits for the property. It’s in the second year of a four-year permit for the main CLM area, and has just received permits for more exploration on the CLM West claims.
“The original idea was that as you move to the west of the area of the Cerro you get into an area of Tertiary volcanics, which host the Avino gold-silver mine, 10 km northwest of our CLM west claims,” Macdonald says. “Further west you have Coeur Mining’s La Preciosa deposit. These are gold-rich, epithermal vein systems.”
Southern Silver acquired the 130 sq. km CLM West claims through staking in mid-2017. The company has completed over 4,500 float and surface chip samples and identified a 12 km corridor of anomalous precious metals.
Southern Silver also has its 22.4 sq. km Oro gold-copper property in New Mexico. The company conducted more than 300 line km of airborne Z-TEM surveys on the property last year and found several copper targets. It appears to host a porphyry system in Laramide-aged rocks. The company is looking to attract a joint-venture partner to continue developing the property.
“The feeling right now is that for porphyry systems you likely need a fair bit of drilling,” Macdonald says. “This may be deeper drilling. It makes sense for us to focus on continued development of the CLM project.”
Shares of Southern Silver are trading at 26¢ with a 52-week range of 22¢ to 47¢. The company has a $28-million market capitalization.