VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 11, 2014) - Southern Silver Exploration Corp. ("Southern Silver" or the "Company") (TSX VENTURE:SSV)(SEG.F) reported today details of a capital consolidation of the Company and on the status of the Cerro Las Minitas option agreement.
The board of directors has approved a capital consolidation of the Company's issued and outstanding common shares on a one new share for ten old shares basis. The consolidation, which is subject to acceptance by the TSX Venture Exchange, is expected to take effect next week. Southern Silver's shares will then trade on a consolidated basis under the symbol "SSV" (with new CUSIP number 843814203). There are currently 170,479,059 common shares issued and outstanding and, upon completion of the consolidation, there will be 17,047,436 common shares issued and outstanding. Southern Silver's management believes that the share consolidation will result in greater investor interest and improved trading liquidity and that through compliance with the TSX Venture Exchange's Policies on minimum price financings, it will facilitate future financing of the Company. Southern Silver will send shareholders a letter of transmittal when the share consolidation has taken effect instructing shareholders to surrender the certificates evidencing their pre-consolidation common shares for replacement certificates representing post-consolidation common shares. The Company's name will remain the same.
Cerro Las Minitas - FMEC Option:
The Company has received notification from Freeport-McMoRan Exploration Corporation ("FMEC") that it does not intend to proceed with its option to earn an Initial Interest of 51% in the Cerro Las Minitas Project ("CLM project").
President Lawrence Page QC commented: "We thank FMEC for its efforts in advancing the CLM project on an accelerated basis. Through the expenditure of money, Freeport has greatly assisted our Company in the acquisition of this property with significant mineral endowments and, as well, through the utilization of science and experience in the exploration of the property, it has enhanced the Project's potential for silver, lead and zinc metals. A good portion of the exploration endeavors of FMEC was directed to discover at depth potential copper and gold mineralization. Although this objective was not accomplished, data developed through FMEC's efforts has assisted our Company in planning its continued exploration and development of the Ag-Pb-Zn resources on the project."
Through the term of its option, FMEC spent a total of $5,451,000 on the CLM Project including $2,811,000 to advance exploration on the project and $2,640,000 in property maintenance and option payments to the underlying vendors.
FMEC-funded exploration activities on the Project included over 7,000 metres of drilling in 13 core holes, soil and vegetation geochemistry surveys and a Reconnaissance IP (RIP) geophysical survey over the entire property. Additional lines of deep-penetrating IP geophysics and a Gravity survey were completed over the area of historic mining as well.
Highlights of the work by FMEC include:
- Confirming the distribution of high-grade mineralization in the Blind zone including a previously reported interval of 9.2 metres averaging 401g/t silver, 8.5% lead and 5.1% zinc (777g/t AgEq) from a shallow intercept on the Blind zone (see NR-17-13, October 24, 2013);
- Confirming the down-dip extension of Ag-enriched high-grade zinc mineralization at over 500 metres depth in the El Sol zone including a previously reported interval of 55.2 metres averaging 41g/t silver, 0.7% lead and 5.3% zinc (202g/t AgEq) (see NR-17-13, October 24, 2013);
- Continuing to expand mineralization in the South Skarn target with a previously reported intercept of 13.9 metres averaging 135g/t silver, 2.4% lead and 1.3% zinc (250g/t AgEq) including a 2.4 metre interval 545g/t silver, 10.3% lead and 3.8% zinc (942 g/t AgEq) (see NR-17-13, October 24, 2013);
- Acquiring the NW extension of the Blind zone through the acquisition of the El Sol concession from Minera Mantos S. de R.L de C.V., a subsidiary of OreMex Resources Inc. (NR-15-13, September 23, 2013); and
- Resolving new shallow IP geophysical targets between 200 and 500 metres below surface at the Zacatecas Shaft and La Bocona targets.
The Cerro Las Minitas property lies within the Faja de Plata (Belt of Silver) and is located just 70 kilometres to the northeast of the city of Durango in Durango State, Mexico, and is accessed easily by road. The property consists of 18 concessions totaling 13,641 hectares in one of the most significant silver producing regions in the world with current reserves/resources and historic production in excess of 3 billion ounces of silver.
Since acquisition in 2010, drilling by Southern Silver and FMEC has totaled 23,310 metres in 75 core holes and has resulted in the identification of two high-grade silver-polymetallic deposits, the Blind zone and El Sol zone, which have been only partially delineated. New discoveries have been made at the North Skarn and South Skarn targets and in extensions to the historic deposits at Mina Santo Nino and Mina La Bocona. Mineralization occurs as massive-sulphide pipes, veins and replacements in sub-vertical structures that demonstrate good continuity between drill holes. Mineralization is open on-strike and at depth in a similar geological environment to that of major Mexican Carbonate Replacement Deposits (CRDs) such as Santa Eulalia (45Mt of 310g/t Ag, 7.1% Zn and 8.2% Pb) and Skarn deposits such as San Martin (60Mt of 118g/t silver, 0.9% copper and 3.9% zinc).
Geological modeling of the Blind and El Sol deposit using a nominal 80g/t AgEq cut-off has identified multiple distinct mineralized structures with a 820 metre cumulative strike-length and with depth projections of up to 350 metres below surface. Deeper mineralization has also been identified at the El Sol and Santo Nino zones.
The work to date provides the basis for future discoveries and the development of potential Ag-Pb-Zn resources on the property including off-set drilling of the modeled mineralized zones at the Blind zone and EL Sol deposits, further delineation of potential resources at the North Skarn and South Skarn targets, and further testing of the remaining geophysical and geochemical targets on the project.
Cerro Las Minitas - Earn in option:
The Company has negotiated with its Optionor an extension of its remaining optional payments to earn an unencumbered 100% interest in the CLM Project. The initial agreement provided for the payment of $4,000,000 to earn a 100% interest in the property with the gross amount to be reduced by $400,000 in the event that the Optionor was unable to deliver title to a non-core mineral concession at closing. To date $3,000,000 has been paid to the Optionor of which $1,800,000 was contributed by FMEC as part of its earn in expenditure. The remaining balance of $600,000 was to be paid as to $500,000 on November 18, 2014 and $100,000 on March 18, 2015 together with the residual amount of $400,000 upon delivery of title to the non-core concession. The agreement also provided for the Optionor to have the right to mine the property at the maximum rate of 100 tons per day until May 18, 2015. The amended agreement provides immediate transfer to the Company of title to the concessions forming the CLM Project, extension of the rights of the Optionor to mine specific four concessions until December 31, 2015 and payment of the residual amount of $600,000 as to $50,000 on October 18, 2014, $150,000 on November 18, 2014, $150,000 on March 18, 2015, $100,000 on July 18, 2015 and $150,000 on December 18, 2015. In the event that the Optionor can deliver title to the one non- core concession, an additional amount of $400,000 will be payable on December 18, 2015.
Table: Summary of Select Composite Drill Intercepts from FMEC's work on the CLM Project since October 2012.
Analyzed by FA-ES/AA for gold and ICP-MS by ALS Chemex, Vancouver BC; Silver overlimits (>100g/t Ag) re-assayed with FA-Grav. AgEq calculation uses values that approximate the three year trailing average of the contained metals: $23.3 silver, $1250 gold, $3.15 copper and $0.9 lead and $0.9 zinc. AgEq calculations did not account for relative metallurgical recoveries of the metals.
*Previously reported Assays
Cerro Las Minitas - El Sol claim:
FMEC will assign to the Company its option to acquire a 100% unencumbered interest in this claim at no cost to the Company. A public record version of the option agreement provides for payment of $2,000,000 as to $150,000 on June 28, 2013, $400,000 on June 28, 2014, $600,000 on June 28, 2015 and $850,000 on June 28, 2016.
Amounts above are stated in US dollars and exclude applicable local taxes.
The El Sol claim comprises 63ha and is situated contiguous to the northwest boundary of the Cerro Las Minitas project and covers an 800 metre strike-length of the northwestern projection of the Blind Zone deposit.
The El Sol Concession is in the early stage of exploration with no indicated resource; however, the high grade silver-lead-zinc system in which it lies has showings that have had small production in the past, and strong IP geophysics by Oremex demonstrate buried intrusive bodies and sulfide mineralization that indicate excellent drill targets.
Robert Macdonald (P.Geo) is a Qualified Person as defined by National Instrument 43-101 and responsible for the supervision and preparation of the technical information in this disclosure.
On behalf of the Board of Directors
Lawrence Page, Q.C., President & Director, Southern Silver Exploration Corp.
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 may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. These statements are based on a number of assumptions, including, but not limited to, assumptions regarding general economic conditions, interest rates, commodity markets, regulatory and governmental approvals for the company's projects, and the availability of financing for the company's development projects on reasonable terms. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, the timing and receipt of government and regulatory approvals, and continued availability of capital and financing and general economic, market or business conditions. Southern Silver Exploration Corp. does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.