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South American Silver unveils 4.5 bln pound copper equivalent resource at Escalones
South American Silver (TSE:SAC)(PINKSHEETS:SOHAF) said Monday that its Escalones project in Chile is estimated to contain 4.5 billion pounds of copper-equivalent metal, doubling the resources the Latin America-focused explorer has in the ground.
Monday afternoon, shares in the company were up 6.5 percent to $1.47.
The company unveiled a newly-defined inferred resource of 420 million tonnes of mineralized material containing 3.8 billion pounds of copper, 56.9 million pounds of molybdenum, 610,000 ounces of gold, and 16.8 million ounces of silver using a 0.2 percent copper equivalent cut-off grade.
This is a copper-equivalent content of 4.5 billion pounds of copper, grading 0.49 percent based on approximate 3-year average metal prices of $3.00 per pound copper, $1,200 per ounce gold, $22 per ounce silver and $16 per pound molybdenum.
South American Silver's president and CEO, Greg Johnson, said: "This resource estimate gives shareholders and other investors a tangible way to begin to value this outstanding second project in the company's portfolio.
"With 4.5 billion pounds of copper equivalent metal, this resource is already larger and higher-grade than many much better known copper-gold projects in North and South America.
"To put this new discovery in context, the resource here is already approximately equivalent in value, size and scale to South American Silver's more advanced Malku Khota silver-indium project, effectively doubling the company's in-ground resources."
South American Silver said that the deposit remains open to expansion laterally and down dip, with 90 percent of this first resource hosted in copper, gold and silver replacement-style mineralization, and one drill hole testing porphyry-style mineralization.
Escalones is the second major resource to be developed by South American Silver since it listed in 2007. It is about equivalent in value, size and scale to its more advanced Malku Khota silver-indium project in Bolivia, which means the company's in-ground resources have effectively doubled with the latest estimate.
The 70 square kilometre Escalones project is located in the central Chilean mining district that includes the nearby El Teniente deposit, which is the world's largest underground copper mine.
A ZTEM and aeromagnetic survey potentially indicating areas of additional sulfide mineralization has been completed for the property and is being interpreted, the company said.
Two drills are currently being mobilized to the project for a phase-II program with approximately 7,000 metres of drilling anticipated to begin in January and to complete in April.
"With the scale of this first resource, along with the excellent infrastructure at Escalones and its similarity to the nearby giant porphyry system at El Teniente, we believe that the Escalones project will begin to attract market attention," Johnson concluded.
"Our team is committed to adding significant new value for shareholders in coming months as we demonstrate potential for further resource expansion at Escalones and advance Malku Khota to the Pre-Feasibility level."
The company said that its 2012 Escalones exploration program will include up to 7,000 metres of follow-up drilling, including both step-out testing of the known mineralized zones and testing new targets based on geochemistry and geophysics.
