February 15, 2013
Money In The Bank And Drills Turning: It’s Full Steam Ahead For Kootenay Silver’s 2013 Drill Program
Last year Kootenay Silver delivered a handsome update to the resource at its flagship Promontorio silver project in Sonora Mexico, after wrapping up a 37,000 metre drill program.
Drilling work at Promontorio
Total resources were tripled, and that was enough to ensure that even in the difficult market climate we have endured of late, Kootenay was able to raise over C$8 million by private placement in November to fund further exploration.
With the cash now in hand, the Kootenay team have hit the ground running in 2013 with another 30,000 metre drill program at Promontorio.
“It’s been over C$50 million raised on that project now since 2008, so in difficult market conditions we’ve been able to successfully continue to advance the project”, says Ken Berry, chairman of Kootenay Silver.
“We have a loyal group of shareholders and they’ve backed Jim McDonald, myself, and our whole team since about 2008.”
Of the funds raised, roughly C$35 million has gone directly into exploration over those six years and in return for the investment Promontorio has provided a considerable silver resource. As it stands the project now holds just over 36 million tonnes grading an average of 51.35 grams per tonne silver equivalent for nearly 62 million measured and indicated ounces.
That 62 million ounces easily surpassed last year’s target of 40 million to 50 million-plus. This year the company is gunning for over 100 million ounces, a number that Ken has had in mind for some time now.
What once seemed like a lofty goal, following a fundamental re-classification of the deposit type at Promontorio last year, now appears firmly within reach.
Ken explains: “Now that our geological team has identified Promontorio as a diatreme system, the potential of the deposit has become much greater in the last year.”
It’s now been established that Promontorio shares similar geology with many massive and highly profitable deposits in a mineralised belt which runs right through Mexico and into the United States.
In fact, some of the people who have been invited down to Mexico to examine Promontorio have begun to make comparisons to another very well known Mexican silver mine, Goldcorp’s Peñasquito mine. Also a diatreme-hosted deposit, Peñasquito is the largest open pit mine in Mexico and is anticipated to produce between 360,000 and 400,000 ounces of silver in 2013.
This year’s 30,000 metre program is focused on continuing to expand the known silver resource to the northeast and southwest of the main deposit, and on five adjacent, high-priority, mineralized stockwork breccia targets that offer significant potential for further resource expansion.
While expanding the known areas of mineralization has been the meat and potatoes of Kootenay’s exploration so far, the new high-priority targets offer the potential for not only resource expansion but the possibility of a grade boost as well.
In the exploration program last year, Kootenay discovered high grade intercepts within the previous resource area.
As Ken told Minesite at the time: “We always knew we had this wide spread mineralization and our most recent drilling showed us there are many high grade intercepts that are located amongst the wide spread mineralization. These high grade zones are really attractive when you start to develop a project like this.”
Now it is beginning to look like further high grade areas could be proven up in adjacent areas, as is characteristic of diatreme systems.
Though the 2013 program is still in its infancy, the Kootenay team has already reported results from the first eight holes drilled at Promontorio.
These holes were drilled in the Northeast Zone to search for extensions to the known mineralization and the results were certainly encouraging. Highlights included 62 grams per tonne silver equivalent over 47 meters, 152 grams per tonne silver equivalent over five meters, and 119 grams per tonne silver equivalent over six meters.
Excellent intercepts coming back from holes stepping out from the known mineralization at intervals of 50 to 100 meters indicate that mineralization in the Northeast Zone is robust and continues to remain open laterally.
James McDonald, Kootenay’s chief executive, stated in commentary that accompanied the drill results that “potential to the north may be better than previously known. Wide intervals of altered diatreme facies with mineralized intervals encountered over drilled lengths to 380 metres again confirm the system is very large and robust”.
So, if the initial results are an indication of things to come, the Kootenay team have their long-held 100 million ounce target firmly in their sights.
“We have 61 million silver equivalent ounces now and we’ve got a very aggressive program underway”, says Ken. “We really believe we’ve got a great shot at pushing this thing over 100 million ounces in this program. We’ve got three drill rigs operating and one in transit so it’s full steam ahead!”