Saturday 1st October 2016

Resource Clips


Silver Threads And Zinc Credits

Silver Bull Expands its Resource in Mexico

By Ted Niles

Until Metalline Mining and Dome Ventures merged in 2010, the silver potential of its Mexico Sierra Mojada project hadn’t even been considered. “Metalline had it for over 16 years and focused almost exclusively on the zinc,” Tim Barry explains. “When the merger was done, and we got to the project, we noted there was significant at-surface silver mineralization kicking around that had never been tested. Zinc at the time was living in the 50-cent range, so we changed direction for the company and started focusing on the silver mineralization.”

A month after Barry’s March 2011 appointment to President and CEO, the company took the name Silver Bull Resources TSX:SVB to better reflect that change of direction. And in the space of seven months, Silver Bull released two resource estimates from the project’s Shallow Silver zone demonstrating Sierra Mojada’s silver lining.

Silver Bull Expands its Resource in Mexico

The project consists of 15,833 hectares, and is located in an historical mining district 250 kilometres north of the city of Torreon in Coahuila State. The November 2011 NI 43-101 technical report estimates that Sierra Mojada has resources of 46.31 million ounces silver indicated and 13.19 million ounces inferred, both at a 15 grams per tonne cutoff. This represents an increase of 45% from the estimate released six months earlier.

“The model we’re using is similar to what Red Back did,” Barry explains—referring to Red Back Mining, which was acquired by Kinross TSX:K in September 2010 for $7.2 billion—”which was putting out regular resource updates every six months or so. We’ve got a very aggressive drill program underway on the property right now. There are three drills turning. The drill plan to the end of the year will probably finish up something in the order of about 50,000 metres.” Barry expects the next resource update to appear in 2Q of this year, and “In addition to increasing the silver resource, we hope will also reintroduce the zinc to the story.”

With zinc prices bouncing back from their 2008 collapse, Sierra Mojada’s Red Zinc and White Zinc zones should be a considerable sweetener. Barry says, “We’ve got a huge zinc resource—that we’re going to get in the next 43-101—that we get no value for in the stock whatsoever. The silver and zinc are going to be quite intimately tied, because the way the ore body is set the silver actually sits over the top of where the zinc is. So you mine out the silver and finish with the zinc as the final paragraph.”

February 14 assays results from the Shallow Silver zone include

  • 19.9% zinc over 10.9 metres
  • 10.06% zinc over 1.2 metres
  • 109.39 g/t silver over 12.6 metres
  • 64.93 g/t silver and 1.64% zinc over 48.3 metres
  • 27.99 g/t silver and 4.57% zinc over 15 metres
  • 144.04 g/t silver over 31 metres
  • 67 g/t silver and 3.41% zinc over 20.6 metres
  • 30.86 g/t silver and 3.14% zinc over 57.7 metres
  • 61.7 g/t silver and 1.83% zinc over 12.4 metres
  • 77.04 g/t silver over 31.9 metres
  • 89.4 g/t silver over 36.3 metres
The goal is that we’re going to keep drilling it out and defining the resource, to keep pushing this as fast as we can towards production —Tim Barry

Barry comments, “What we were doing with this drill program was just testing the margins of the known mineralization. Interestingly, we’re hitting some really exciting zinc intercepts, particularly down the eastern end of the property. At the western end of the ore body, we were pleasantly surprised [to find] we had a significant increase in the grade of the mineralization as well as the thickness that we intercepted. We’re excited about that because on that same trend there are a bunch of historical mine shafts that extend for another 1.5 kilometres that have never been drilled. So part of 2012 will be to focus on drilling on the western end of the known ore body.”

February 27 results of the current drill program at the Centenario zone—situated 300 metres north of the fault which hosts the Shallow Silver zone—include

  • 86.98 g/t silver over 118.2 metres
  • 93.8 g/t silver over 20.3 metres
  • 29.45 g/t silver over 29.8 metres
  • 31.16 g/t silver over 20.3 metres
  • 25.76 g/t silver over 40.4 metres
  • 16.62 g/t silver over 95.1 metres
  • 51.27 g/t silver over 140.6 metres

Because of a surfeit of targets located near the resource, Silver Bull will be devoting 2012 almost exclusively to drilling. Barry notes, however, that a metallurgical program—focusing on both the silver and the zinc—will also take place this year. “The goal is that we’re going to keep drilling it out and defining the resource,” he relates, “to keep pushing this as fast as we can towards production. We’re going to keep rolling over 43-101 updates until the end of this year, thinking about PEAs and feasibilities in 2013 and where they fit into the picture.”

Sierra Mojada is accessible both by rail and paved road and is within 30 kilometres of power lines. Security issues arising from—to use Barry’s euphemism—”entrepreneurial horticulturalists” have been non-existent, due to the project’s location—which precludes any through traffic—and, more crucially, the absence of surface water. “We’re probably in one of the few parts of Mexico where we haven’t had to organize a security company to come on board.”

“You’ll be able to put this into production very quickly for two reasons,” Barry declares. “One, a good portion of the mineralization sits at surface. Two, it sits at a slightly elevated position, which means you could gravity feed a lot of the ore to where you want to go. So the build-out costs, at least initially, should be pretty modest and easy to do.”

With $12.5 million cash on hand, three-quarters of the known resource in the indicated category, and the potential for a considerable zinc resource, Barry anticipates a good year for Silver Bull. “When you put all that together, coupled with a 50,000-metre drill program that is going ahead this year, I can see nothing but good news and good results coming forward,” he concludes. “We’re simply getting better and better at identifying the zones to drill, and [output] from the drill rigs has been probably too fast. It’s kind of hard to keep up at times. I think 2012 will be a really exciting year.”

At press time, Silver Bull had 136.2 million shares trading at $0.57 for a $77.6 million market cap. The company also has numerous projects in Gabon, in West Africa.


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