Ermitaño Silver Project

 

Ermitano I & II Concessions

Property Size: 16,526 hectares

Location: within 8km radius of the Santa Elena Mine (see figure 1)

Status: Exploration; drill testing identified targets

These consessions are located along the same “developing regional trend” of mineralization that hosts First Majestic’s Santa Elena Mine. The defined trend is approximately 10 kilometres wide and 20 kilometres long and strikes northwest-southeast.

Geology

The concessions host late cretaceous andesite and rhyolite volcanic rocks with major structures controlling the Santa Elena silver and gold low sulphidation epithermal mineralization.

Targets & Mineralization

Several defined main targets have been identified:

  1. El Durazno: Comprises of two parallel east-west trending corridors of veining and stockwork mineralization with thickness ranging from 4 metres to 50 metres with outcropping for a defined cumulative strike length of approximately 900 metres. The first corridor ( Figure 2) is defined by outcropping of veining and stockwork in an area of 400 metres along strike and 50 metres wide with a total of 86 surface channel samples averaging 1.28g/t Au. The second corridor is defined by outcropping of veining and stockwork in an area of 500 metres along strike and 50 metres wide with 129 surface channel samples averaging 0.34g/t gold, trace silver. Evidence based on epithermal textures and more detailed mineralogical studies suggest a shallower level exposure in a low sulphidation epithermal environment compared to Santa Elena.
  2. Ermitaño West: Contains a network of low sulphidation east-west trending epithermal veins and stockwork within an area of 1,200 metres long 600 metres wide with 546 surface channel samples averaging 0.17g/t Au with surface grades up to 4.8 gpt gold, trace silver over 2.5 metres. Vein textures suggest a shallower level of exposure in the low sulphidation epithermal environment compared to Santa Elena.
  3. Ermitaño East: Is an east-west trending galena bearing silver vein system with indications of two different levels of epithermal exposure (deep and shallow) compared to Santa Elena. Several select surface channel samples over 0.1 to 2.0 metres grade over 300 gpt silver.
  4. Veta Valentina: Hosts a 1.2 kilometres long and 10 metres wide east-west trending structural corridor with low sulphidation epithermal veining. Results to date show 37 individual surface channel samples from a central zone (50 metres long - 10 metres wide) averaging 1.34g/t gold and 33.2g/t silver.

Exploration Program

The first known exploration drilling of the El Durazno target has been completed. A total of nine holes, relating to an estimated 2,656 metres were drilled. The objective was to initially drill test surface mineralization for potential open pit targets.

The most significant assay results from this initial exploration drilling program at the El Durazno target are shown in the following table.

Hole ID From (m) To (m) Interval (m) Au gpt Ag gpt
ED-14-001 131.0 132.6 1.6 0.27 3.9
ED-14-003 116.5 118.0 1.5 0.21 1.3
ED-14-005 40.5 60.0 19.5 0.61 4.1
including 46.1 60.0 13.9 0.72 4.3
including 54.0 57.0 3.0 1.17 7.1
  76.5 78.0 1.5 0.21 1.7
  85.5 93.5 8.0 0.21 1.1
  163.5 169.0 5.5 0.36 1.3
including 165.0 169.0 4.0 0.42 0.75
  185.0 198.0 13.0 0.86 14.1
including 193.4 198.0 4.6 2.10 35.5
  263.1 265.3 2.2 0.25 7.6
ED-14-006 74.4 95.3 21.0 0.21 3.0
including 90.3 95.3 5.0 0.36 6.7
  144.3 146.3 2.0 0.38 1.9
ED-14-007 69.0 72.0 3.0 0.24 1.6
ED-14-008 53.0 54.2 1.2 0.22 3.4
  175.0 191.7 16.7 0.42 13.2
including 189.2 191.7 2.5 1.58 58.8
ED-14-009 65.0 90.0 25.0 0.59 2.5
including 65.0 70.0 5.0 1.00 1.9
including 82.3 90.0 7.7 1.11 4.2

All sample analyses were completed by Inspectorate Labs of Reno, NV. Holes ED-14-002 and 004 had no significant values.

El Durazno is the first of several targets to be drilled in the Ermitano I & II and Cumobabi concessions. Additional exploration work will consists of approximately 6,000 metres of drilling and advance regional surface exploration programs to delineate further targets.

Cumobabi

Property Size: 25,221 hectares

Location: adjacent to Ermitano concessions (see figure 1);

Status: Exploration; surface work

 

Maps

Figure 1
 

Figure 1
Figure 2
 

Figure 2
Figure 3
 

Figure 3