San Agustin
The San Agustin property covers 576 hectares and is centered 85 kilometers north of Durango City in Durango State, Mexico. The mineral concessions were acquired in 2003 through staking. Prior to Silver Standard’s claiming of the property, another junior resource company had identified on surface a zone of oxidized gold mineralization and drilled approximately 10,400 meters on this target. Another 3,890 meters of reverse circulation drilling was carried out by Silver Standard to follow up on the encouraging results obtained by the other company’s drill-holes. Then in 2006, Silver Standard optioned the property to a third party which spent more than $10 million on various exploration programs, including 35,247 meters of diamond drilling. Due to the global economic crisis at the end of 2008, that company was not able to meet the terms of the option agreement and consequently had to return the mineral rights to the property back to Silver Standard.
Using its drill-hole data, the company that had optioned the San Agustin property calculated and reported metal resources in November, 2008. The N.I.43-101-compliant indicated resources were estimated at 122,150,000 tonnes having an average grade of 0.41 grams Au/tonne, 12.3 grams Ag/tonne and 0.49% Zn. Another 93 million tonnes of inferred resources were estimated with similar concentrations of gold, silver and zinc. The contained metal in the indicated resources alone amounts to 1.61 million ounces of gold, 48.3 million ounces of silver and 1.32 million pounds of zinc.
In 2010, Silver Standard completed a comprehensive program of geophysical surveying on the property. As a result of this work, new drill-targets were identified in the immediate vicinity of the known Au-Ag-Zn resources as well as in areas where bedrock exposures are sparse. A 6,000-meter diamond drilling program has been planned to test these targets and is expected to be carried out in the fourth quarter of 2011 or early in 2011. The primary objective of this drilling will be to better define and expand the resources of near-surface, oxidized gold mineralization. An internal study that was done to test the viability of a heap-leach gold mining operation at San Agustin gave encouraging results and is the motivation for our advanced exploration of the property at this time.
