Silver Spruce Resources, Inc. signed a Definitive Agreement with Colibri Resource Corp. to acquire up to 50% interest in the El Mezquite gold-silver (Au-Ag) project is a drill-ready precious metal project located 5 km west of the towns of Tepoca and Carrizal, and 165 km east-southeast of the capital city of Hermosillo, eastern Sonora, Mexico.
The El Mezquite 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 Property is situated approximately twelve kilometres northeast of the Nicho deposit currently under mine development by Minera Alamos. The 180-hectare Property is easily accessible from Mexican Highway #16 via a southerly-trending unpaved road which traverses through the centre of the known gold mineralization. Other nearby large operating mines include Alamos Gold's Los Mulatos gold mine and Agnico Eagle's La India gold mine located 50 and 58 km to the northeast, respectively, Agnico's Pinos Altos Mine, 100 km southeast and Argonaut's La Colorada Mine, 100 km west. Exploration in the surrounding area is very active with adjacent and nearby properties held by Evrim, Newmont, Garibaldi, Kootenay Silver and Penoles.
Four main zones of alteration on the Property with potential drilling targets have been identified and 43-101 report was completed in 2019. A maiden reverse circulation drilling program of 2,000-2,500 metres is scheduled for May 2021.
Terms of Agreement
The principal terms to purchase 50% interest in Yaque include US$210,000 in cash payments over 12 months, specifically US$82,500 by September 1, 2020 upon Exchange approval, US$127,500 by September 1, 2021 and a promissory note to the Vendor for CDN$500,000 for a debenture due in October 2023. The Company will have the option to pay US$107,500 by December 31, 2020 to complete the cash acquisition for a discounted total of US$190,000. Upon full payment, the Company and the Vendor propose to complete a 50:50 Joint Venture Agreement to own and operate Yaque. Minimum work expenditures total US$600,000 over the four-year term of the Agreement by September 1, 2024, with no specific annual requirements.
During the period of the Option, the Company will be responsible for 100% payment of the surface rights agreements when exploration is active, 50% of the property taxes and 50% of the interest due at 2.5% annually on the debenture. The underlying agreement with the original vendors contains a 1% percent Net Smelter Return royalty which can be purchased by Yaque at any time for US$500,000.
The mineralization in the region commonly consists of disseminated gold hosted in strongly argillized and moderately silicified andesite rocks, typical to the Sierra Madre geological model of the principal deposits. The principal El Mezquite target area is defined as an alteration zone that extends for about 2 km in a north/south direction and is about 1 km wide. There are at least four of these colorful, hydrothermally altered, contact zones within the El Mezquite prospect area. The yellow, orange and reddish colors of the highly altered areas are caused by hydrothermal solutions oxidizing sulphides.
The sulphides are related to gold and silver values and geochemical anomalies which are mostly associated with these zones of alteration. The major trends of the alteration zone are generally north-south; however, the major trend of mineralization within the Property is NE-SW.
Exploration work carried out between 2010 and 2019 consisted primarily of rock chip sampling and surface prospecting of numerous altered exposures and historical artisanal workings with 2011 geophysical surveys conducted on the eastern portion of the Property.
Two surface rock chip sampling campaigns were completed during 2010 and 2014, totaling 321 samples. An additional 12 independent verification samples were collected in October 2015. Another 25 surface samples were collected in 2019 by Colibri Resources. A second Property visit for the independent 43-101 report (October 2019) verified that no other significant exploration activities have been conducted in the area since 2015. A magnetic and 3DIP survey (Three-Dimensional Induced Polarization) was completed by SJ Geophysics in 2011 along seven lines, being 1,200 metres long and spaced by 100 metres. One magnetic baseline running perpendicular to the main grid lines covered 8.75-line km of magnetic data. The geophysical study reported that the orientation and amplitude of the chargeability anomalies was consistent with the mapping, structural and geochemical trends within a high sulphidation system.
Historical assay results from 362 rock chip samples indicate that 22 of the samples report values of gold >0.5 g/t, averaging 1.35 g/t Au and 54.4 g/t Ag. These samples are distributed along an area that extends for 600 metres in a north-south direction and 300 metres E-W. The highest values of gold and silver reported are 3.41 g/t Au and 198 g/t Ag. Recent surface sampling campaigns by Colibri in 2019 confirmed the anomalous values, with precious metal values ranging up to 1.63 g/t Au and 155 g/t Ag.
Ground truthing of the high sulphidation Au-Ag system with geological and spectral mapping, rock sampling and a first-ever drilling program will provide the Company with another quality opportunity to grow with the strong gold and silver markets. The Company has undertaken a detailed exploration program which was recommended in part by the independent 43-101 report, including the requisite environmental permitting for drilling access and pads, rock geochemical and hyperspectral analysis, QA/QC program development, data compilation and Leapfrog modeling, detailed mapping of geologic structures and lineaments.
Analysis of over 450 samples from historical and recent mapping and prospecting were completed and final results are anticipated shortly. The tests included multi-element and hyperspectral analysis of all historical samples collected between 201 and 2019 by the previous operators.
Detailed geological mapping was initiated in 2020 by Silver Spruce and to date, no drilling was conducted on the project. A maiden reverse circulation drilling program of 2,000-2,500 metres is scheduled to begin in mid-May 2021.
Silver Spruce recently announced the approval for its Informe Preventivo, the environmental application required for drilling on the El Mezquite. The permit was received and granted to the concession holder, Yaque Minerals S.A. de C.V. by the Mexican Secretariat of Environment and Natural Resources (SEMARNAT).
Rock 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).
Splits of crushed rejects were sent to ALS in Reno, NV for hyperspectral analysis (HYP-PKG) using the Terraspec 4 and aiSIRIS identification of the principal silicate, sulphate, carbonate and hydrous oxide species, namely the alteration minerals and their relative intensity.
In-house quality control samples (blanks, standards, preparation duplicates) were inserted into the sample set. ALS Global also 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, MSc, PGeo and Silver Spruce Director, is the Company's internal Qualified Person for the El Mezquite 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.
September 5, 2019NI 43-101 Technical Report