Silver Spruce Resources, Inc. signed a Definitive Agreement with Colibri Resource Corp. and Yaque Minerales SA de CV to acquire up to 50% interest in the Diamante gold-silver (Au-Ag) project is a drill-ready precious metal project located 5 km south-southwest of the towns of Tepoca and Carrizal, and 165 km east-southeast of the capital city of Hermosillo, eastern Sonora, Mexico.
The Diamante Project is located within the west-central portion of the Sierra Madre Occidental Volcanic Complex within the prominent northwest-trending "Sonora Gold Belt" of northern Mexico and parallel to the well-known, precious metals-rich Mojave-Sonora Megashear. The 1,057-hectare Property is easily accessible from Hermosillo and heading south from Mexican Highway #16, and from Ciudad Obregón travelling north on Hwy. #117 and west from Tepoca/Carrizal with vehicles and pack teams along unpaved roads and trails. The Property is situated approximately ten to twelve kilometres northwest of the Nicho deposit currently under mine development by Minera Alamos. Other nearby large operating mines include Alamos Gold’s Los Mulatos gold mine and Agnico Eagle’s La India gold mine located 50-60 km to the northeast, Agnico Eagle’s Pinos Altos Mine, 95 km southeast and Argonaut’s La Colorada Mine, 100 km to the west. Exploration is very active with adjacent and nearby properties reported to be held by Minera Alamos, Newmont, Garibaldi, Evrim, Kootenay Silver and Peñoles.
The adjacent El Mezquite and Jackie projects are currently subject to option agreements with Colibri wherein SSE can earn 50% of the gold and silver projects by meeting certain criteria over four years and two years, respectively. El Mezquite and Jackie currently have assays pending from Phase 1 mapping and prospecting while the Company recently received our SEMARNAT approval for El Mezquite’s maiden drilling program to begin in May 2021.
Silver Spruce recently engaged a due diligence geological team to Diamante after signing the LOI and prior to signing the Definitive Agreement.
Terms of Agreement
Silver Spruce has completed the execution of the Definitive Agreement and upon acceptance by the TSX Venture Exchange (TSXV), to earn its initial 25% interest in the Property, the Company agrees to pay Colibri an initial cash amount of $75,000 USD directed to the Vendor’s $100,000 USD initial property payment whereupon Silver Spruce and Yaque each will hold a 25% interest in the Property and manage the Property as equal partners.
Silver Spruce will be the designated operator of the Property during the earn-in period with the Vendor. The Partners will direct the exploration program via a Project Oversight Committee.
To earn its initial 50% of the Diamante project, Silver Spruce and Yaque also agree to design, permit and drill a minimum of 2,000 metres on the Property within 24 months from the Execution Date of Yaque’s final agreement with the Vendor; including any requisite exploration leading to the drill program, submit a final drilling report to meet NI 43-101 reporting guidelines and pay approved exploration costs at a ratio of Silver Spruce (75%) and Yaque (25%).
The Partners will pay to the Vendor 50% of the bi-annual property taxes and surface rights payments.
Upon completion of the initial earn-in, Silver Spruce and Yaque will become equal joint venture partners with the Vendor in BIMCOL, a private Mexico company holding the concessions, pay to the Vendor 50% of the bi-annual property taxes and surface rights payments and pay approved prorata exploration costs at a ratio of Silver Spruce (50%) and Yaque (50%).
Yaque will have an exclusive period of six months to purchase the remaining 50% of BIMCOL by paying the Vendor either of: i) US$2.1 million or ii) US$1.45 million and the grant of a 2% net smelter royalty (NSR) on the project.
Should Yaque elect to exercise its right to purchase the remaining 50% of BIMCOL, Yaque will also grant Silver Spruce the option to purchase one-half of its additional ownership for one-half of the cost for a period not to exceed six (6) months from the date Yaque elects to exercise its right and Yaque will provide three (3) months notice to Silver Spruce for the purchase due date within the first three (3) months of the option period.
Silver Spruce engaged a geological team to Diamante to verify the location of known mineralization, collect a photographic record of the geology, topography and vegetation, and carry out preliminary rock sampling. The assays of specific interest from rock samples collected at five of the targets (Calton, El Cumbro, El Cazo-La Olla, La Prieta and El Chon) are reported herein and includes channel and grab samples from the artisanal workings. The pathfinder elements associated with precious and base metals create an opportunity to evaluate geochemical zoning on a property scale prior to drilling, and the artisanal workings provides the Company with early targets for discovery.
Diamante covers ten known occurrences at La Prieta-El Aguaje, El Chon-El Pillado, La Olla, La Cruz and El Caso, Mezquite Raizudo, El Puerto, El Cumbro, Calton and the Southern Anomaly. Historical exploration sampling on Diamante has reported outstanding values of Au, Ag, Pb and Zn collected from mine dumps, slag, and vein and stockwork mineralization.
The Property exhibits geological features of epithermal low to intermediate sulphidation Ag-Au (Pb-Zn), high sulphidation Au-Cu, and potential transition to porphyry style Au-Cu. Polymetallic mineralization occurs as disseminated, stockwork and vein styles accompanied by silicification (with veining), and phyllic, argillic, advanced argillic and propylitic zones, with near-surface overprinting by weathering, iron oxide and oxyhydroxide staining, jarosite and vuggy silica. Structural lineaments with ENE, NE and NW orientations identified in the historical exploration correspond to six known vein systems.
Mineralization is reported as pyrite, chalcopyrite and galena, and probable secondary base metal oxides, carbonates and sulphates, including copper carbonate (malachite) and copper sulphates.
Silver Spruce and our project partner, Yaque and Colibri, shall commence geological, spectral and LiDAR mapping, rock sampling and an environmental report for SEMARNAT approval and the permit necessary to engage the maiden 2,000 metre drilling program at Diamante. Field programs are planned for Q3 2021 with drilling proposed for Q4 2021.
All aspects of the exploration program are conducted with strict adherence to COVID-19 protocols for personal safety.
Due diligence samples were delivered to the ALS sample preparation facility in Hermosillo, Sonora, Mexico. ALS Global in North Vancouver, British Columbia, Canada, is a facility certified as ISO 9001:2008 and accredited to ISO/IEC 17025:2005 from the Standards Council of Canada.
The samples were crushed to 70% passing 2mm (PREP-31) and a split of up to 250 grams pulverized to 85% passing 75 micrometres (-200 mesh). The sample pulps and crushed splits were transferred internally to ALS Global's North Vancouver analytical facility for gold and multi-element analysis. Pulps (50gram split) were submitted for Au analysis by Fire Assay with Atomic Absorption finish (Au-AA24). The retained pulps also were analysed by Four Acid Digestion followed by Inductively Coupled Plasma Atomic Emission Spectrometry (ICP-AES) multi-element analyses (ME-ICP61m) with Hg by Aqua Regia and ICP-MS (Hg-MS42). Over-limit Au and Ag samples were analyzed by Fire Assay with Gravimetric Finish Ore Grade (Au-GRA21 or Au-GRA22, Ag-GRA21). Overlimit base metals were analyzed by Four Acid Digestion followed by Ore Grade Inductively Coupled Plasma Atomic Emission Spectrometry (ICP-AES) for Cu, Pb and Zn (Cu-OG62, Pb-OG62, Zn-OG62).
Given the small number of samples collected, in-house quality control samples (blanks, standards, preparation duplicates) were not inserted into the due diligence sample set. ALS Global conducts its own internal QA/QC program of blanks, standards and duplicates, and the results were provided with the Company sample certificates. The results of the ALS control samples were reviewed by the Company's QP and evaluated for acceptable tolerances. All sample and pulp rejects will be stored at ALS Global pending full review of the analytical data, and future selection of pulps for independent third-party check analyses, as requisite.
All of the metal values disclosed herein by past operators and Silver Spruce are reported from grab and channel samples which may not be representative of the metal grades, and those from previous exploration efforts must be considered as historical in nature. The Company has reviewed the certificates and believes the analytical protocols and data will withstand scrutiny for inclusion.
Greg Davison, PGeo, Silver Spruce VP Exploration and Director, is the Company’s internal Qualified Person for the Diamante Project and is responsible for approval of the technical content of this press release within the meaning of National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"), under TSX guidelines.