Southern Silver Exploration (TSXV: SSV) has posted a slight resource increase at its Cerro Las Minitas project in Mexico that sent its shares up 9.4%.
The overall resource at the project near Durango, about 900 km northwest of Mexico City, rose by 5%. Southern Silver said its La Bacona deposit saw a 63% rise in silver-equivalent ounces while the South Skarn, Blind, El Sol, Skarn Front and Las Victorias deposits remained unchanged compared with the previous estimate from 2021.
Shares in Southern Silver Exploration gained 1.5 ? to close at 18 ? each in Toronto on Wednesday, within a 52-week range of 14 ? to 40 ?, valuing the company at $51 million.
Cerro Las Minitas has 12.5 million tonnes grading 106 grams per tonne silver, 0.1 gram gold, 0.2% copper, 1.3% lead and 3.3% zinc for contained 42.7 million oz. silver; 29,000 oz. gold; 46 million lb. copper, 364 million lb. lead and 903 million lb. zinc. It equals 140 million oz. silver-equivalent or 2.3 billion lb. zinc-equivalent.
The new estimate incorporates results from 26 drill holes totaling 11,800 metres testing the northwestern extension of the La Bocona deposit, which now includes the shallow North Felsite zone. The La Bocona deposit, with South Skarn, forms a 1,200-metre-long, semi-continuous zone of mineralization featuring three separate higher-grade "shoots" which extend 500 metres below surface and remain open at depth, the company said.
"This latest resource update represents one more step in the continued evolution of the Cerro La Minitas project through the identification of further shallow, high-grade mineralization," Rob Macdonald, vice-president of exploration, said in a news release. "Future work will maintain a focus on adding value to the project early in the production timeline for maximum economic benefit."
Macdonald said that work would include more engineering upgrades to the project design; a detailed review of capital expenditures; the addition of gold payables to the cash-flow model; and pre-concentration to improve the project's economics.
The estimate was done with a US$60 per tonne net smelter royalty cut-off using average long-term prices of US$20 per oz. silver, US$1,650 per oz. gold, US$3.25 per lb. copper, US$1 per lb. lead and US$1.20 per lb. zinc.
A preliminary economic assessment released last August envisioned a 15-year underground mine life built for US$341 million producing gross revenue of US$3.7 billion from annual average throughput of 14.2 million oz. silver-equivalent.
The project would have an after-tax net present value of US$349 million with a 5% discount rate to produce a 17.9% internal rate of return using silver at US$21.95 per oz., copper at US$3.78 per lb., lead at US$0.94 per lb. and zinc at US$1.33 per pound. All-in sustaining costs would be US$13.27 per oz. of silver-equivalent sold.