Peņasco Quemado
Overview
The Peñasco Quemado project totals 20,000 hectares located in north-central Sonora, Mexico. Silvermex holds its interest in the Peñasco Quemado property through its wholly-owned Mexican subsidiary Minera Terra Plata, S.A. de C.V. ("Terra Plata"), which holds the option on three exploitation concessions and has staked and optioned a further seven exploration concessions.
The Peñasco Quemado property lies within the Sierra Madre Occidental metallogenic province, which extends along western Mexico from the border of the Mexican and American states of Sonora and Arizona, respectively, and south to the state of Jalisco. Recently exploration for silver in the region has been intensified, due to the high silver prices on the world market, as well as the geological re-definition of important silver targets within the old mining districts in northwestern Sonora, which were ignored until recently because of the presence of large deposits of copper and gold discovered several decades ago.
The project contains disseminated silver mineralization and minor amounts of gold and copper, associated iron, and strong manganese oxide within brecciated zones in a volcano sedimentary suite of rocks. The mineralized brecciated zones are the most important exploration targets on the property. These zones consist of disseminated silver with minor amounts of gold and copper, associated iron and strong manganese oxides as well as quartz calcite-barite veinlets. In the past, very high grade fissure filling structures were exploited, at times producing over 2 kg/t Ag.
Location
The Peñasco Quemado property is located in the Mexican state of Sonora, south of the American state of Arizona. Specifically, the project is located within the north-central portion of the Mexican state of Sonora, approximately 14.5 km west of the town of Tubutama, in the Magdalena - Tubutama mining district.
History
The Peñasco Quemado property was mined on a small scale many years ago, probably prior to the 1910 revolution; however no details are available regarding this early activity. Foundations of an old foundry or mill and a slag pile remain about 200 m west of the present pit. Modern exploration activity on the property dates from the early 1960's when Asarco Mexicana ("Asarco") reportedly optioned the property as a copper-silver prospect and conducted a small drill program. Small scale mining was carried out intermittently at Peñasco Quemado beginning in the late 1970's. Silver ore with a grade averaging approximately 225 g/t Ag was mined from a small open pit. Previous operators Minera Cerro de Plata S.A. de C.V. ("Cerro de Plata") optioned the property in 1981 and conducted a limited amount of exploration and drilling on the project between 1981 and 1983. No major exploration was conducted between the time Cerro de Plata dropped its option in 1983 and when Silvermex optioned the property in 2005.
Geology
The Peñasco Quemado project is primarily a silver occurrence with minor amounts of gold and copper hosted in structurally-controlled fissure fillings in granite and disseminated in sheared polyclastic sedimentary breccia. In general the Peñasco Quemado property is extensively covered by a cap of alluvium and valley fill, which varies from 0 to 40 m thick. The alluvium and fill overlie a red conglomerate which is up to 200 m thick as evidenced from drill hole intersections. The red conglomerate is in a high angle fault contact with a volcanic sequence that includes andesitic tuffs, andesitic breccia and andesitic flows. The entire upper lithological column is unconformably overlying a basement of gneissic granite and between the two units there exists a complex unit that has been described by the geologists of Silvermex/Terra Plata as felsite. The felsite is associated with a mylonite zone that has been identified along a strike distance of several kilometres from the west portion of the property where it outcrops in the areas called the Low Angle, The Pink Breccia and the Stockwork. In the Peñasco pit area the mylonite has been encountered up to 130 m to 150 m deep in the drill holes. In the eastern portion of the property there are scant outcrops of sandstones, limestones, jaspers and siltstones. However, these outcrops are being explored for borax in the San Carlos area where the borax appears to be contained in the lower portion of the Tubutama Formation, interbedded in a succession of sandstone and tuffaceous shale.
Two structural features can be recognized within the exploration area on the property:
Resource and Reserve Estimate
The mineral resource estimate is based on a total of 3,442.61 m of core, rotary and reverse circulation drilling from 49 holes completed by Silvermex in 2005 and 2006 as well as by Cerro de Plata in the 1980s. The Peñasco Quemado deposit consists of silver with minor gold and copper in structurally-controlled fissure fillings hosted within granite and disseminated throughout a sedimentary breccias unit. The near surface and oxidized nature of the mineralization suggest the deposit would have a low strip ratio and be amenable to low cost, bulk tonnage, open pit mining methods.
The mineral resource estimate is as follows:
The resource estimate is compliant with the current CIM standards and definitions required by NI 43-101 and is, therefore, reportable as a mineral resource by Silvermex. However, the reader should be cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. This mineral resource will now be the basis for Silvermex to conduct further exploration to build upon this existing resource base and to conduct further economic evaluations on the deposit.
The Peñasco Quemado project totals 20,000 hectares located in north-central Sonora, Mexico. Silvermex holds its interest in the Peñasco Quemado property through its wholly-owned Mexican subsidiary Minera Terra Plata, S.A. de C.V. ("Terra Plata"), which holds the option on three exploitation concessions and has staked and optioned a further seven exploration concessions.
The Peñasco Quemado property lies within the Sierra Madre Occidental metallogenic province, which extends along western Mexico from the border of the Mexican and American states of Sonora and Arizona, respectively, and south to the state of Jalisco. Recently exploration for silver in the region has been intensified, due to the high silver prices on the world market, as well as the geological re-definition of important silver targets within the old mining districts in northwestern Sonora, which were ignored until recently because of the presence of large deposits of copper and gold discovered several decades ago.
The project contains disseminated silver mineralization and minor amounts of gold and copper, associated iron, and strong manganese oxide within brecciated zones in a volcano sedimentary suite of rocks. The mineralized brecciated zones are the most important exploration targets on the property. These zones consist of disseminated silver with minor amounts of gold and copper, associated iron and strong manganese oxides as well as quartz calcite-barite veinlets. In the past, very high grade fissure filling structures were exploited, at times producing over 2 kg/t Ag.
Location
The Peñasco Quemado property is located in the Mexican state of Sonora, south of the American state of Arizona. Specifically, the project is located within the north-central portion of the Mexican state of Sonora, approximately 14.5 km west of the town of Tubutama, in the Magdalena - Tubutama mining district.
History
The Peñasco Quemado property was mined on a small scale many years ago, probably prior to the 1910 revolution; however no details are available regarding this early activity. Foundations of an old foundry or mill and a slag pile remain about 200 m west of the present pit. Modern exploration activity on the property dates from the early 1960's when Asarco Mexicana ("Asarco") reportedly optioned the property as a copper-silver prospect and conducted a small drill program. Small scale mining was carried out intermittently at Peñasco Quemado beginning in the late 1970's. Silver ore with a grade averaging approximately 225 g/t Ag was mined from a small open pit. Previous operators Minera Cerro de Plata S.A. de C.V. ("Cerro de Plata") optioned the property in 1981 and conducted a limited amount of exploration and drilling on the project between 1981 and 1983. No major exploration was conducted between the time Cerro de Plata dropped its option in 1983 and when Silvermex optioned the property in 2005.
Geology
The Peñasco Quemado project is primarily a silver occurrence with minor amounts of gold and copper hosted in structurally-controlled fissure fillings in granite and disseminated in sheared polyclastic sedimentary breccia. In general the Peñasco Quemado property is extensively covered by a cap of alluvium and valley fill, which varies from 0 to 40 m thick. The alluvium and fill overlie a red conglomerate which is up to 200 m thick as evidenced from drill hole intersections. The red conglomerate is in a high angle fault contact with a volcanic sequence that includes andesitic tuffs, andesitic breccia and andesitic flows. The entire upper lithological column is unconformably overlying a basement of gneissic granite and between the two units there exists a complex unit that has been described by the geologists of Silvermex/Terra Plata as felsite. The felsite is associated with a mylonite zone that has been identified along a strike distance of several kilometres from the west portion of the property where it outcrops in the areas called the Low Angle, The Pink Breccia and the Stockwork. In the Peñasco pit area the mylonite has been encountered up to 130 m to 150 m deep in the drill holes. In the eastern portion of the property there are scant outcrops of sandstones, limestones, jaspers and siltstones. However, these outcrops are being explored for borax in the San Carlos area where the borax appears to be contained in the lower portion of the Tubutama Formation, interbedded in a succession of sandstone and tuffaceous shale.
Two structural features can be recognized within the exploration area on the property:
- A shear zone with dynamic metamorphism as evidenced by the felsite, a sheared rock emplaced in the contact between the gneissic granite and the upper sequence of volcanics and the red conglomerate.
- Normal faulting developed along northwest, northeast and west-east striking structures, with lateral displacement that formed a basin and range morphology, which has suffered erosion and re-depositional filling of the basins with recent materials.
Resource and Reserve Estimate
The mineral resource estimate is based on a total of 3,442.61 m of core, rotary and reverse circulation drilling from 49 holes completed by Silvermex in 2005 and 2006 as well as by Cerro de Plata in the 1980s. The Peñasco Quemado deposit consists of silver with minor gold and copper in structurally-controlled fissure fillings hosted within granite and disseminated throughout a sedimentary breccias unit. The near surface and oxidized nature of the mineralization suggest the deposit would have a low strip ratio and be amenable to low cost, bulk tonnage, open pit mining methods.
The mineral resource estimate is as follows:
Category |
Tonnes |
Ag (g/t) |
Contained Ag |
|---|---|---|---|
Measured (M) |
0.123 |
151.9 |
0.599 |
Indicated (I) |
2.442 |
115.0 |
9.032 |
Total M&I |
2.565 |
116.8 |
9.631 |
Inferred: |
0.001 |
41.4 |
0.001 |
The resource estimate is compliant with the current CIM standards and definitions required by NI 43-101 and is, therefore, reportable as a mineral resource by Silvermex. However, the reader should be cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. This mineral resource will now be the basis for Silvermex to conduct further exploration to build upon this existing resource base and to conduct further economic evaluations on the deposit.
