Silver One Resources Inc. (TSXV: SVE) (OTC Pink: SLVRF) (FSE: BRK1) has initiated the permitting process with the BLM to undertake a drilling program on the historic leach pads at its Candelaria silver property in Nevada. The drilling results will be used to assess grade distribution and metallurgical recoveries of silver from the reprocessing of these heaps, which have a historic inferred resource estimate of over 48 million ounces of silver averaging 1.29 oz/t Ag (~44 gm/tonne Ag) (see the section titled “Historical Resource Estimate” below). Based on conversations with the BLM, permitting is expected within the next few weeks. Current objectives at Candelaria are, subject to positive metallurgical results, to initiate a pre-feasibility – feasibility study in Q1-Q2, 2018. Upon receipt of a positive PFS / FS, Silver One will decide on production of silver from vat leaching the historical leach pad material.
Simultaneously, surface exploration will be undertaken to get a better understanding of the structural controls of the mineralization and thus, assess the mineral potential along-strike outside the areas of the old pits. Very little exploration work was completed since the earlier days of open pit mining (pre-2000). However, it is apparent from a preliminary examination of the property, undertaken since Silver One entered into an option agreement with Silver Standard in January, 2017 (now SSR Mining Inc.), that numerous old workings and structures may be host to silver mineralization outside of the areas of the old pits and the resource drilling area defined by Silver Standard in 2001. The historic resource from this drilling amounted to approximately 44 million ounces of silver at the measured and indicated levels and an additional 34 million ounces of inferred silver, all confined to an area immediately north of and down-dip from the pit mineralization. In addition to this resource an estimated 48 million inferred ounces of silver are on the leach pads (see the section titled “Historical Resource Estimate” below).
Future drilling down-dip from the previously mined pits will also examine the potential for high-grade silver mineralization as evidenced from the Silver Standard drilling of 2000. Several intercepts greater than 300 gm/tonne (8.8 oz/t) silver were encountered, with one intercept returning 670 gm/tonne (19.5 oz/t) silver over 13.7 meters (45 ft). Candelaria was known as the richest producing silver mine in Nevada, producing on average 1,250 gm/tonne (36.5 oz/t) silver from oxide veins between the mid-1800’s and 1954, prior to open-pit mining commencing in the 1970’s. Total historic production is estimated at 68 million ounces.
Silver One’s technical personnel believe potential exists for much more silver mineralization than that defined by the Silver Standard historic resource estimate. Silver One has a 3-year option agreement with Silver Standard, signed in January 2017. Terms of the agreement are US$ 4.0 million in Silver One shares to be issued in 4 tranches, one on signing and 3 on each of the anniversaries. To date, Silver Standard was issued USD$ 1 million worth of shares and owns approximately 1.33 million shares. With the completion of the option, Silver One will earn 100% of Silver Standards interest in the project.
*Historical Resource Estimate
Silver Standard exercised its option to acquire the Candelaria Project in 2001 and reported in a technical report titled “Candelaria Project Technical Report” dated May 24, 2001 (filed on SEDAR on June 20, 2002), prepared by Pincock Allen & Holt, the historical mineral resource estimate shown in the table below.
|Historical Resource Estimate|
|Subtot. M + Ind||13,623,000||3.23||0.003||3.42||44,060,000||46,633,000|
1) Lode resources tabulated at a 0.5 opt Agsoluble cutoff grades, with only Agtotal shown in this table
2) Leach pads and low-grade stockpile resources tabulated for entire accumulation of material.
3) Total silver grades factored from soluble silver grades using regression formulas developed by Snowden.
4) Silver equivalent grade includes the contribution from the gold grade (soluble) using an Ag:Au equivalency ratio of 57.8:1.
The historical mineral resource estimate used “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource”, which are categories set out in NI 43-101. Accordingly, Silver One considers these historical estimates reliable as well as relevant as it represents key targets for exploration work by Silver One. The data base for the historical resource estimate
(1) on the Mount Diablo Deposit consisted of 538 drill holes by previous owners and 10 drill holes by Silver Standard Resources Inc. For drill holes that were twinned, the author used the lower of the two values assigned to the original holes. The mineral resource estimate used a kriging estimation method to establish ore zones with a cut-off grade of 0.5 opt Ag. Ordinary kriging was used to interpolate grades in the block model. The block models were set up with block dimensions of 25 feet by 25 feet in plan and 10 feet in height. The maximum search range used in the higher-grade zone was 235 feet, in the lower grade zone it was 1,000 feet and in the background zone it was 350 feet. Block models more than 300 feet from the nearest composite only constituted 3 percent of the total number of estimated blocks and were assigned to an inferred category,
(2) on the Northern Belle Deposit consisted of 226 drill holes by previous owners, of which a portion of these holes were duplicated for the Mount Diablo Deposit database. The mineral resource estimate used a kriging estimation method to establish ore zones with a cut-off grade of 0.5 opt Ag. The mineral resource estimate used multiple indicator kriging to interpolate grades in the block model. Block models were set up with block dimensions of 50 feet by 50 feet in plan and 20 feet in height. The maximum search range used in the higher-grade zone was 85 feet, in the intermediate-grade zone was 120 feet and the lower-grade zone was 140 feet and in the lower undifferentiated material below the current pit topography was 260 feet. Block models more than 300 feet from the nearest composite only constituted 3 percent of the total number of estimated blocks and were assigned to an inferred category;
(3) on the Leach Pads consisted of 24,633,000 tons located on Leach Pad 1 and 12,695,000 on Leach Pad 2. The estimate for Leach Pad 1 is based on the fact that silver production indicates 51.5% of total silver was recovered by heap leaching operation, while 81.2% of the soluble silver contact was recovered. Further, the estimate for Leach Pad 2 is based on the fact that silver production indicates 42.4% of total silver was recovered by heap leaching operation, while 71.3% of the soluble silver content was recovered;
(4) on the Low-Grade Stockpile is based on limited and incomplete data and documentation. Material placed on the on the stock piles ranged from 0.5 to 0.65 opt Ag,
To the knowledge of Silver One, there is no new data available since the calculation of the above historical resource estimate and no additional work has been done to upgrade or verify the historical resource estimate. The qualified person has not done sufficient work to classify the historical estimate as a current mineral resource therefore Silver One is treating these historical estimates as relevant but not current mineral resources.