AbraSilver Resource Corp. (TSX-V: ABRA | WE: ABBRF) significantly increased its gold and silver ounces with an updated mineral resource estimate for the Oculto deposit on the company’s 100% owned Diablillos property in the province of Salta, Argentina. But the resource suggests that there is more mineralization in a new zone.
The mineral resource estimate is based on a total of 104,888 meters of drilling in 457 holes. It demonstrates an extensive near-surface open-pit high-grade (AgEq) equivalent silver mineral resource base at Diablillos: 51.3 Mt at 131 g/t AgEq with over 215 Moz AgEq;
There was substantial growth in measured and indicated mineral resources: 51.3 million tonnes at 66 grams of silver per tonne and 0.79 g/t gold for 109 million ounces of contained silver and 1 .3 million ounces of gold, a 22% increase in contained silver and a 29% increase in contained gold over the September 2021 estimate.
The 2021 mineral resource estimate indicated 90,165,000 oz of Ag and 1,002,000 oz. Au in the measured and indicated category, and an additional 3,181,00 oz. Ag and 66,000 oz. Au in the inferred category.
There was a 135% increase in the tonnage of the high grade zone, classified in the measured category, now totaling 19.3 Mt at 98 g/t Ag, 0.88 g/t Au. A $5.1 million (US) Phase II drilling program added 43 Moz AgEq contained in the MI Mineral Resource, representing a cost of just 12 US cents per added AgEq ounce.
The Diablillos project covers 80 square kilometers and hosts silver and gold mineralization in the fertile northwestern mining region of Argentina which includes TacaTaca (First Quantum Minerals Ltd.), Lindero and Arizaro (Fortuna Silver Mines Inc. .), Rio Grande (Regulus Resources Inc. .) deposits.
The property has been the subject of over $50 million of exploration to date, but the property shows more potential.
More to discover: Defining a new zone
The company released results from the first drill hole of a new hole, DDH 22-019, on August 3, 2022. This discovery hole intersected 87 meters at 346 g/t Ag and 0.15 g/t Au in the oxides from a hole depth of only 89 meters. Following this discovery, the two holes
released were positioned 50 meters on either side of DDH 22-019, along the strike.
These three drill holes from the new southwest zone, called the JAC zone, encountered high-grade silver mineralization in near-surface oxides, making this new zone the company’s most promising exploration target. .
The company focused on this area and moved its two phase 3 drills into this area. A total of nine holes in the southwest zone have now been drilled, including DDH JAC-003, which is located over 300 meters southwest of the original discovery hole, DDH 22-019.
Vast potential for mineral resource growth remains The Company is continuing a Phase III drilling program focused on expanding the recent high-grade silver discovery in the Southwest Zone, for which an initial mineral resource estimate is expected in the first half of 2023.
New resource, new economy: planning a mine
This new mineral resource is the subject of a new economic study which the company expects to deliver in the first quarter of 2023. The PFS will utilize the more than 300 drill holes and 100,000 meters of drilling from the new resource and two development programs. detailed metallurgical tests. .
A 2021 preliminary economic assessment (PEA) already estimated a positive economic situation for the Diabillos project with an internal rate of return (IRR) of 30.2% for an average annual production of 4.2 million ounces of silver and 52,000 ounces of gold over 16 years.
Several scenarios are currently under consideration, which could result in improved project economics, including:
- Metallurgical testing could improve silver recovery rates, thereby increasing the ore payable per amount of rock moved.
- Transformation: studies are underway to determine the optimum flow, which should be higher than that indicated in the preliminary economic assessment.
- Geotechnology and hydrology: A first geotechnical drilling campaign was carried out. Preliminary results indicate that the company could improve access to deeper high-grade mineralization near the base of the open pit. The campaign should determine the availability of water to increase plant throughput.
- Capital expenditure and operational expenditure optimization to focus on logistics costs
All of this work will help make the case for additional funding and possible development with investors.
Solid support: AbraSilver in numbers
Strong drilling results helped the company’s stock performance in a weak market for junior mining companies. In July 2022, the company’s shares were trading at approximately 24 cents CDN and following the drilling results, the share price reached 42 cents on September 15.
With the upcoming PFS, the company is able to support and continue to foster the Diabillos project and the market value of the company. The company has $17 million in cash to fund further work as a follow-up to its successful summer program.
The company has strong shareholders such as Eric Sprott who owns 64,481,500 shares, representing 12.6% of outstanding shares on a non-diluted basis.
In addition, the Diabillos project is part of EMX Royalty’s (NYSE:EMX) wallet. SSRM (formerly Silver Standard) has sold its 1% NSR on the Diablillos project along with the remaining obligation of a US$7 million payment which is due in 2025 (or upon commercial production) to EMX.
AbraSilver owns a stake in a growing royalty company that has just started to receive payment for one of its flagship Gedikpete assets and EMX also benefits from an approximately 80% increase in its royalty at the mine of copper from Caserones in Chile.
Partners make the difference in the mining sector.
Ready for growth when gold prices return
The one thing that sets mining companies apart from their peers is whether they push ahead with their plans despite market headwinds.
AbraSilver has outperformed its peers by successfully advancing its exploration programs, significantly expanding its gold-silver resources with an exciting new discovery several hundred meters from the limit of the currently defined mineral resources (on the main Oculto repository)! Now, shareholders look forward to the next big steps in the growth that continues to distinguish the company as an outperformer.
Next major growth catalysts:
- Additional drill results
- First resource for the southwest area
- PFS published in Q1 2023
I have continuously added to my holdings since AbraSilver’s IPO several years ago. AbraSilver remains my primary gold and silver exploration investment, which may increase further as we approach a few key milestones. These rich key catalysts will propel analyst re-ratings and I expect a friendly response in its stock price as the size and economics of the project become even more attractive!
Success in mining exploration is often like the growth of a bamboo shoot. It takes years of care and cultivation seeing little growth. But these years of effort ultimately lead to explosive growth. With more catalysts to come, AbraSilver is very well positioned to capitalize on its exploration successes.
To continue your research and learn more about AbraSilver, please visit AbraSilver.com
The analysis of this report was carried out with the work of Nicholas LePanGoldSeek.com
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