The Parral mining district, located in southern Chihuahua State, Mexico, was a major producer of silver, lead and zinc during the middle of the last century, with its history of silver mining dating back to the 16th Century. Within this productive district, the Company controls four separate properties: Veta Colorada, La Palmilla, San Patricio and Chilicote.
Veta Colorada Project
- History: The northerly trending Veta Colorada fault-hosted vein structure occurs about 10 kilometers northwest of the city of Parral and was the early focus of silver mining in the district. Our property covers most of this structure and encompasses the abandoned underground workings and remaining resources of the former Sierra Plata and El Verde mines. It has been estimated that these mines produced more than 78 million ounces of silver.
- Mineralization: The Veta Colorada structure consists of a silicified fault breccia that affects Tertiary volcanic rocks. It has been traced for more than 10 kilometers along strike and is known to dip moderately to the east. The productive ore bodies have strike lengths of about 500 meters, dip extents that reach 500 meters or greater and horizontal thicknesses that range from a few meters up to 35 meters, as seen in the Sierra Plata mine.
- Exploration: Surface diamond drilling done prior to Silver Standard’s acquisition of the property determined that a similar body of mineralization may be hosted by the fault breccia north of the underground workings of the Sierra Plata mine. In early 2006, Silver Standard drilled three boreholes that confirmed the presence of this body of partially oxidized silver mineralization.
La Palmilla Project
- History: The La Palmilla property, located a few kilometers south of the Veta Colorada mines, saw underground mining during the early 1900’s. The bulk of historical silver production came from a subvertical quartz lode only 150 meters in length, 70 meters wide vertically, and up to 30 meters thick. This lode was one of the richest ore bodies in the Parral district, reportedly producing approximately 20 million ounces of silver.
- Exploration: In 2012, the Company completed extensive surface rock sampling over the prominent hill that occupies most of the property. Overall, assay results from this sampling program were encouraging, indicating significant potential on the property for a silver resource that could be exploited with an open-pit mine. Follow-up channel sampling will be done in 2013. A program of drilling will be designed once the surface sampling results have been compiled and high-potential drill targets are defined.
San Patricio Project
- History: The San Patricio property lies short distance east of the Veta Colorada claim group and north of La Palmilla. The property covers a northerly trending fault-controlled vein structure that dips steeply to the west. Decades ago, a vertical mining shaft of about 150 meters length was excavated to access the vein, but only a minor amount of development work was completed along the vein.
- Exploration: In recent years, the Company’s geologists completed surface and a limited amount of underground rock sampling to confirm the presence of silver mineralization along the San Patricio structure. In late 2012 – early 2013, a drill program of approximately 1,750 meters in 8 drillholes was done to test the subsurface continuity of the mineralized veining. Among the better results obtained by the drilling was a 23 meter intersection of oxidized silver mineralization in hole SPD-01 that averaged 132 g/t Ag.
- Mineralization: The Chilicote property covers a large area on the eastern side of the Parral mining district. The geology of the property is dominated by dacite to rhyolite volcanic formations, which lie stratigraphically above the andesitic volcanics that in the district commonly host the mineralized quartz veins.
- Exploration: By conducting geophysical and geochemical surveys over these formations, we will be searching for high-level expressions of ‘blind’ silver-lead-zinc deposits that may occur hundreds of meters below surface. The target is a deposit comparable to the La Prieta polymetallic deposit that was mined for decades by Asarco and then IMMSA.
Jeremy D. Vincent, B.Sc. (Hons), P.Geo., a Qualified Person as defined in NI 43-101, has approved the foregoing disclosure on the Parral Mining District.
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