“El Rayo is the one of the first two mines in Mexico to be mined. It dates back to 1546, so it’s quite a historic area. Washinango, the local town, used to be the state capital of Mexico. The project is in area of Mexico that’s very safe—it’s not in the mountains, it’s on the main road. It was part of the federal mine reserve up until the late 80s. We staked it and since staking we’ve proved-up just under 26 million ounces and we’re expanding it through drilling as we speak.
“These results are basically infill drilling. We’d done a prior program where we hadn’t assayed the tops of the holes. So we went in and we’ve now assayed the tops of the holes down. Basically it’s part of our resource calculation that we’re carrying out. And I’m pretty happy with the results. Effectively we’re showing that in the tops of the holes there’s mineralization—there are some fairly decent values and widths in those calculations. We’re basically working on trying to bring the strip ratio down and we seem to have achieved that in this area of the deposit where we’ve drilled.
“For 2011 we want to try and move the resource to the next level. At this moment there’s basically the equivalent of a quarter million ounce deposit if you use the 50-to-1 gram ratio. I think it’s critical to get it to the next level—above the 50 million ounce level. So the drilling we’re doing now and the resource calculation are designed to do that. We’re in a fairly good silver market, so really we want to get it to the level where we can demonstrate that it’s economically viable.
“At the moment we haven’t made any production decisions. There is a property that is contiguous that has just gone into production, and we’ve had some discussions with them. And we’ve talked to different senior companies about becoming involved. So we haven’t made a production decision at this stage. We really have to get the ounce-count up to make that decision. But we’re working on it.”
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