Silver Dollar reports historical 1,778 g/t silver-equivalent at La Joya

2020.08.26

In 2012, SilverCrest Minerals was doing well. 

The Mexico-focused company was achieving steady production at its Santa Elena silver mine in the state of Sonora, targeting 2.2 million ounces of silver-equivalent that year. 

A $26.2-million cash position at the end of 2012 encouraged the company to expand Santa Elena and explore a potential large, bulk-tonnage discovery at its La Joya silver-copper-gold property in southeast Durango State.

Three years later, SilverCrest was bought out by First Majestic Silver Corp. (TSX:FR), adding well over 20 million silver-equivalent ounces per year to the silver major’s production profile. 

In hindsight it’s not abundantly clear that FR saw the value in La Joya. The project wasn’t even mentioned in the July 27, 2015 news release announcing the friendly takeover. 

Fast forward another five years, and we have Silver Dollar Resources (CSE:SLV, OTC:SIDRF) finalizing a letter of intent (LOI) with First Majestic Silver to acquire up to a 100% interest in La Joya. 

To acquire an 80% interest in the project, Silver Dollar will pay First Majestic $1.3 million in cash over four years, issue 19.9% of its shares, incur $1 million in exploration expenditures within five years, and grant FR a 2% NSR royalty. If Silver Dollar spends the million dollars within three years, First Majestic will waive nearly half, or $600,000, of the cash option payments. 

SLV can earn the remaining 20% by issuing First Majestic additional shares equal to 5% of Silver Dollar’s then-outstanding common shares, within five years. 

Now that the option agreement is finalized, Silver Dollar has been going through historical exploration data at La Joya, including records of a Phase 3 drilling program conducted by SilverCrest between February 27 and March 29, 2014. What it has found is breathtaking. 

Included among the unreported results of a 17-hole in-fill drill program (2,698 meters), was “the presence of discrete high-grade stockwork and structurally controlled veining”. Hole LJ DD14-116 intercepted 2.0 meters grading 723.5 grams per tonne (g/t) silver (Ag), 8.97% copper (Cu) and 0.09 g/t gold (Au), or 1,778.1 g/t silver equivalent (AgEq). 

These are very high silver and copper grades in my opinion the extreme high grade nature of the vein makes it a mineable width. 

Other highlights of the in-fill drill program included: 

• 1,915 grams per tonne (g/t) Ag over 0.45 meter, Cu of 20.4% over 0.55 meter, and 3.5 g/t Au over 1.0 meter. 
• Continuous broad intervals of mineralization hosted in replacement manto style mineralization, such as in hole LJ DD14-114 that intercepted 66.4m grading 43.5 g/t Ag, 0.27% Cu and 0.38 g/t Au, or 98.21 g/t AgEq. 
• Outcropping and near-surface mineralization, such as hole LJ DD14-109, which intercepted 21.92m grading 31.5 g/t Ag, 0.36% Cu and 0.95 g/t Au, or 130.4 g/t AgEq. 
• Excellent potential for extending the deposit to the east where hole LJ DD14-116 intercepted two broad mineralized zones grading 75.7 g/t Ag, 0.55 % Cu, and 0.06 g/t Au, or 143.9 g/t AgEq over 25.1m, and 106.2 g/t Ag, 1.20 % Cu and 0.29 g/t Au, or 264.0 g/t AgEq over 23.1m.
• Notably, hole LJ DD14-116 was drilled near to the previous holes LJ DD12-79 (48.8 metres grading 53.1 g/t Ag, 0.37 % Cu, and 0.06 g/t Au) and LJ DD12-86 (45m grading 135.5 g/t Ag, 1.14% Cu and 0.11 g/t Au) along the Tecolote structure, which remains open to the east. This eastern area is a primary exploration target representing a 750-meter-wide gap where no drilling has been undertaken and is flanked on the east by the Santo Nino Deposit.

According to Silver Dollar’s CEO, Mike Romanik, the 750m-wide gap between the Main Mineralized Trend and the Santo Nino deposit will be a priority at La Joya because “It demonstrates the tremendous potential for resource expansion.” 
Silver Dollar summarizes SilverCrest’s 2014 results in an Aug. 25, 2020 news release: 

The Phase 3 drilling program targeted infill drilling along the Main Mineralized Trend (Figure 2) and was successful in confirming significant mineralization in 15 of 17 holes (two holes were drilled for geotechnical logging and no assay records have been located). The results provide Silver Dollar with further confidence in the extent of the mineralized system and verify several key features of the polymetallic Ag-Cu-Au deposit identified in the National Instrument (NI) 43-101 Preliminary Economic Assessment Technical Report (the “PEA”), with Effective Date of October 21, 2013, and Released Date of December 5, 2013 (refer to SEDAR)

It’s interesting to note that the 17-hole program was done with the goal of completing an updated resource estimate during the first half of 2015. The new resource estimate was never finished, due to First Majestic’s takeover of SilverCrest in October, 2015. 

Instead, Silver Dollar is basing its exploration going forward on the 2013 resource estimate, which outlined 159.7 million inferred silver-equivalent ounces at a 30 grams per tonne cut-off. Doubling the cut-off grade to 60 g/t yields a more conservative 92.9 million AgEQ ozs. 

The estimate took into consideration 89 historical holes totaling just over 30,000m. Mining would be by open-pit methods. 

The property is about 75 km southeast of the state capital city of Durango in a prolific mineralized region with past-producing and operating mines including Grupo Mexico’s San Martin mine, Industrias Penoles’ Sabinas, Pan American Silver’s La Colorada, and First Majestic Silver’s La Parrilla and Del Toro Silver mines. Access and infrastructure are considered excellent with highway, rail and power lines nearby.

La Joya’s unrealized potential is evident from news about the property in 2012, when SilverCrest saw it as an integral part of growing its resource base.  

The project hosts the La Joya mineralized trend as well as the Santo Nino and Coloradito deposits. The Ag-Cu-Au property consists of 15 mineral concessions totaling 4,646 hectares. 

Initial exploratory drilling identified a 2.5-kilometer mineralized trend with economic intercepts up to 230m wide. 

Between 2010 and 2012, SilverCrest completed 149 drill holes and 348 surface samples. Widespread drilling throughout a first-phase 1 km x 500m area, delineated 151.3Moz silver, 333,400 oz gold and 270.2 million pounds of copper in the inferred category, equal to more than 100Moz silver-equivalent, at a cut-off grade of 15 g/t AgEq. 

New tonnage added in late January, 2012 marked a 424% increase, to 125 million contained ounces, in SilverCrest’s total silver-equivalent inferred resource. 

A phase 2 drill program further tested the phase 1 area. In September of 2012, SilverCrest published the results of 15 more drill holes plus surface sampling. According to then-President J. Scott Drever, 

“The drill results continue to support our large tonnage silver deposit model and the extensive surface sampling in conjunction with certain drill holes support the concept of a potentially higher grade, open pit concept.” 

SilverCrest also re-analyzed drill core from a historic 56 drill holes completed between 1979 and 2003 by previous operators. Their analysis identified the Coloradito molybdenum, tungsten, silver and gold target.

Coloradito has weighted average grades similar to near-surface bulk tonnage deposits such as Thompson Creek and Endako – two of the largest moly mines in the United States – the Sisson tungsten-moly mine in New Brunswick, Canada, and El Creston in Mexico.

Highlight drill intercepts from Coloradito included 55 meters grading 16.8 g/t silver, 0.06 g/t gold and 0.072% molybdenum; 208m averaging 12.4 g/t silver, 0.10 g/t gold and 0.226% moly; and 78m carrying 12.5 g/t silver, 0.15 g/t gold and 0.098% moly. Five collared holes were also drilled at the nearby nearby Santo Nino and Esperanza targets.

Conclusion

We love the La Joya silver project, and so, apparently, does the market. 

Investors who bought shares in June, 2020 and held on, already have a 5-timer. On Aug. 17 this unknown silver stock nearly hit $2.00, having only been trading for 3 months! It IPO’d on the Canadian Stock Exchange on May 1 @ $0.15 a share. 

The La Joya property is well-positioned, in a prolific mining region with past-producing and operating mines nearby, including those owned by major silver companies like First Majestic, Pan American Silver and Grupo Mexico. Road, rail and power lines to the property tick the all-important infrastructure box. 

The ink is barely dry on the LOI with First Majestic, and Silver Dollar is already pulling eye-popping silver intercepts, from its grab bag of historical drill data. What else is hiding in those SilverCrest documents? I can’t wait to find out.

Silver Dollar Resources Inc.
CSE:SLV, OTC:SIDRF
Cdn$1.58, 2020.08.26
Shares Outstanding 26,276,620m
Market cap Cdn$41.5m
SLV website

Richard (Rick) Mills
aheadoftheherd.com
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