Southern Silver Exploration (SSV.V) has been able to update its resource estimate at the Cerro Las Minitas project after completing an additional 10,157 meters of drilling. These additional meters added a lot of value as the indicated resource increased to almost 134Moz AgEq (consisting of 37.5Moz silver, 35,000 ounces gold, 303 million pounds of lead, a bit of copper and almost 900 million pounds of zinc).
There’s an additional 138 million ounces of silver-equivalent in the inferred category, and of the 138Moz, almost 46Moz are pure silver with the majority of the silver-equivalent consisting of zinc. These results are based on a cutoff grade of 175 g/t silver-equivalent (based on a $75/t operating, smelting and sustaining cost) but even at a higher cutoff grade of 250 g/t AgEq the project would still contain in excess of 200M oz AgEq.
The resource estimate consists of four separate deposits and the newly discovered Skarn Front zone is the main contributor to the updated resource estimate as this zone added almost 5 million tonnes of rock to the overall resource and the relatively low US$2M that was spent in 2018 on additional exploration resulted in adding 5.1 tonnes to the combined indicated and inferred resources, and added 63 million ounces silver-equivalent. Definitely a good return on investment!
Based on this updated resource, we can now update our preliminary and very much back-of-the-envelope economic model which we published in 2018. Despite the additional data, our accuracy level will still be relatively low as both different types of the deposit have different recovery rates as the Blind, El Sol and Las Victorias deposits have (slightly) higher recovery rates for silver, gold and lead, but the Skarn Front boasts a higher zinc and copper recovery rate. Additionally, Southern Silver is still working on optimizing the flow sheet to make sure the metals end up in the most favorable concentrate (as explained before, you would want the silver to end up in the lead concentrate as the payability in the zinc concentrate is much lower).
For the upcoming drill program, Southern Silver will continue to focus on increasing the resource base but it will very likely also earmark some budget to pursue new epithermal vein based discoveries like the 3 meters containing 168 g/t silver that was discovered at Cerro Las Minitas West last year.
As of the end of January, Southern Silver’s working capital decreased to less than C$0.5M so we hope the excellent resource update will put this polymetallic project on the investors’ radar screens again.