New Zone Opens a New Exploration Horizon and
Will Allow for Innovative and Highly Productive Operational Design
at Cusi
Sierra Metals Inc. (TSX: SMT) (BVL: SMT) (NYSE AMERICAN:
SMTS) ("Sierra Metals" or "the Company") announces the
discovery of a new high-grade silver zone with significant widths
in an area called Northeast – Southwest System of Epithermal Veins
and is providing a corporate update for its Cusi Mine in
Mexico.
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the full release here:
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Figure 1: Cusi Project NE-SW System Area
(Graphic: Business Wire)
The new high-grade silver vein system was discovered as a
consequence of a combination of mine development work in recent
months and confirmatory drilling which is reported in this press
release which includes true widths of 17.45 meters of 428 g/t
silver (464 g/t silver equivalent), 9.35 meters of 304 g/t silver
(327 g/t silver equivalent), 8.75 meters of 303 g/t silver (322 g/t
silver equivalent) and 4.90 meters of 1,140 g/t silver (1,163 g/t
silver equivalent).
Sierra Metals announced with a press release on June 29, 2018
the discovery of a 40-meter wide high-grade stockwork area within
the Santa Rosa de Lima vein at Cusi. As the area was developed for
mining in the later part of 2019 and early 2020, our geologists
re-interpreted the stockwork structure as a series of high-grade
veins that had an orientation perpendicular to the Santa Rosa de
Lima Structure. The most important implication of this
re-interpretation is that rather than a widening of the Santa Rosa
de Lima zone, these veins extended further to the North East side
of the Cusi fault, which was considered barren of silver
mineralization before. Note that the Cusi fault coincides with The
Santa Rosa de Lima structure. All the historic silver
mineralization at the Cusi mine reported by Sierra Metals was in
the South Western side of this regional fault. The new discovery is
an extension of the Cusi Vein systems in the North East of the
fault and, rather than barren, the veins are reporting silver
grades and widths above the average of the structures previously
known at the mine in the South West to the Cusi fault.
The Company has plans to drill an additional 1,000 meters to
better understand the extension of the zone at depth and to
Northeast. This mineralized zone is made up of multiple veins
extending over 300 meters in length which are in proximity to the
existing operations. The Cusi Mine is located within the
municipality of Cusihuiriachi in the central portion of the State
of Chihuahua, in Mexico. The Mine area encompasses 11,657 hectares
at an elevation range of 1,950 to 2,460 meters above sea level in
the Sierra Madre Occidental Mountain Range.
Drill Hole Highlights include:
Hole
From
To
Ag
(g/t)
Pb
(%)
Zn
(%)
Au
(g/t)
AgEq
(g/t)
True
Width (m)
DC20M656
30.0
38.75
303
0.22
0.31
0.07
322
8.75
DC20M658
96.25
105.6
304
0.34
0.25
0.10
327
9.35
DC20M658
113.25
119.7
435
0.57
0.39
0.13
471
6.45
DC20M677
52.10
57.00
1,140
0.37
0.36
0.03
1,163
4.90
DC20M686
47.40
50.40
518
0.06
0.10
0.15
530
3.00
DC20M686
185.40
202.55
428
0.46
0.76
0.04
464
17.45
DC20M687
237.65
238.50
890
1.74
3.20
0.45
1,151
0.85
DC20M690
34.25
36.90
368
0.47
0.40
0.20
405
2.65
*The metallurgical recoveries used were based on averages
obtained from production data provided by Sierra Metals. The
metallurgical recoveries used are: 87% Ag, 57% Au, 86% Pb, 51%
Zn.
**Metal prices used were based on consensus are: $17.86/Oz
Silver, $1,431/Oz Gold, $0.93/lb Lead, and $1.06/lb Zinc.
“This exploration program confirms the existence of high-grade
silver mineralization and demonstrates the important potential of
this new zone. It will also allow the Company to use a mining
method which results in high productivity thus achieving the
planned objectives for the Cusi Mine” stated J. Alonso Lujan, Vice
President Exploration of Sierra Metals. He continued, “Intercepts
such as those shown especially in holes DC20M658, DC20M677,
DC20M686 and DC20M687 are common in high-grade epithermal deposits,
and demonstrate further potential. As such, they give us a reason
to continue exploration in the Cusi fault area at depth and along
strike, as well as at other high-value zones such as the San
Rafael, San Nicolas and the Bordo fault. We look forward to an
exciting future as we explore the Cusi district”.
Luis Marchese, CEO of Sierra Metals commented, “Today’s drilling
results demonstrate the potential for further development of
high-grade zones at Cusi. We are excited for further drill results,
as they along with today’s results will potentially increases the
value of the asset and play an important role in our growth
strategy for the Cusi Mine”.
A plan map is shown above of the Cusi area in Figure 1. Figure 2
shows the distribution of the NE – SW System veins.
2020 Drilling – NE
System
Mineralized Intercepts
DRILLHOLE
DEPTH
Intercept
MINERALIZED LENGTH
INTERCEPT WIDTH
Malpaso Lab (Dia Bras)
Au g/t
Ag g/t
Pb %
Zn %
Mn %
STATUS
FROM
TO
(M)
DC20M656
129.00 M.
1
30.00
38.75
8.75
0.07
303
0.22
0.31
0.34
DC20M658
140.50 M.
1
39.50
40.30
0.80
0.05
183
0.63
0.72
0.04
2
96.25
105.60
9.35
0.10
304
0.34
0.25
1.36
3
108.05
110.25
2.20
0.04
272
0.37
0.22
2.13
4
113.25
119.70
6.45
0.13
435
0.57
0.39
1.31
5
128.60
130.10
1.50
0.08
194
3.75
1.46
1.29
DC20M667
104.05 M.
1
40.70
56.10
15.40
0.04
175
0.08
0.14
0.63
2
70.80
78.90
8.10
0.04
203
0.14
0.20
0.68
3
94.85
103.10
8.25
0.01
135
0.07
0.14
2.00
DC20M677
113.50 M.
1
52.10
57.00
4.90
0.03
1140
0.37
0.36
1.79
2
69.00
70.15
1.15
Ind
177
0.20
0.20
0.09
DC20M683
104.80 M.
1
1.10
3.65
2.55
0.02
182
0.29
0.36
0.69
2
20.80
21.70
0.90
0.10
210
0.10
0.20
2.42
3
28.30
38.10
9.80
0.08
234
0.21
0.24
2.30
4
73.40
78.60
3.15
0.02
152
0.11
0.17
0.44
5
144.20
146.80
2.60
0.06
216
0.70
0.61
0.01
6
217.15
217.65
0.50
0.05
179
0.18
0.26
1.40
7
232.10
233.35
1.25
0.10
275
0.37
0.41
2.11
2020 Drilling – NE
System
Mineralized Intercepts
DRILLHOLE
DEPTH
Intercept
MINERALIZED LENGTH
INTERCEPT WIDTH
Malpaso Lab (Dia Bras)
Au g/t
Ag g/t
Pb %
Zn %
Mn %
STATUS
FROM
TO
(M)
DC20M686
191.40 M.
1
47.40
50.40
3.00
0.15
518
0.06
0.10
0.43
2
96.70
104.55
7.85
0.06
205
0.10
0.12
0.71
3
130.15
131.30
1.15
Ind
312
0.18
0.24
0.03
4
171.85
172.95
1.10
Ind
216
0.34
0.39
2.19
5
185.40
202.85
17.45
0.04
428
0.46
0.73
1.39
DC20M687
268.70 M.
1
35.00
35.75
0.75
0.45
341
0.11
0.23
1.10
2
44.70
50.80
6.10
0.13
156
0.23
0.21
1.13
3
70.00
70.40
0.40
0.30
179
0.24
0.61
0.02
4
94.95
96.30
1.35
0.40
118
0.25
0.27
0.27
5
100.55
100.95
0.40
Ind
144
0.33
0.53
0.22
6
120.15
121.20
1.05
Ind
106
0.61
1.04
0.10
7
157.25
158.55
1.30
0.05
312
0.26
0.19
0.24
8
159.40
159.75
0.35
0.10
483
0.75
1.61
0.77
9
170.95
172.30
1.35
0.03
424
0.34
0.73
0.46
10
227.90
228.40
0.50
0.35
353
0.10
0.55
0.08
11
237.65
238.50
0.85
0.45
890
1.74
3.20
0.05
DC20M690
28.00 M.
1
26.25
28.30
2.05
0.05
130
0.06
0.11
1.82
2
34.25
36.90
2.65
0.20
368
0.47
0.40
1.87
3
62.30
63.10
0.80
0.35
180
0.37
0.14
0.01
4
64.70
66.00
1.30
Ind
121
0.06
0.09
0.34
5
70.40
71.00
0.60
0.10
358
0.08
0.26
0.02
6
85.15
87.10
1.95
Ind
116
0.09
0.20
0.17
7
148.00
149.85
1.85
0.22
290
1.63
1.04
0.48
8
169.45
170.15
0.70
Ind
135
0.11
0.29
0.11
9
191.35
192.30
0.95
Ind
115
0.08
0.11
0.59
10
198.50
201.25
2.75
0.05
211
0.12
0.15
0.27
11
210.60
211.00
0.40
Ind
108
0.09
0.07
0.07
12
226.80
227.30
0.50
0.20
469
0.30
1.51
0.04
13
269.00
271.20
2.20
0.22
560
0.11
0.22
0.08
Cusi Mine Operation Update
The Cusi Mine remained in care and maintenance during the
government-mandated shutdowns due to its proximity to urban centers
with large populations. During this period of care and maintenance,
the management team has had the time to complete an optimised view
of the entire mine operation. Changes on the interpretation of the
geological system have been made based on updated information from
a stockwork tonnage system to a vein model system, which is
expected to help better control and improve head grades, dilution,
and make better use of Cusi’s silver mineral resources. The Company
plans to use a sublevel stoping method for extraction, which is
better suited to the rock/mineral environment. Additionally, the
main access ramp has been extended to an opening of four meters by
four meters, which will allow for the use of larger 30-ton capacity
trucks into the mine and improve the efficiency of ore haulage
coming from the mine.
Mine development is currently starting at Cusi in a zone that
will bypass the previously announced area of subsidence (see press
release dated May 13, 2020) and provide access to higher-grade
economic ore to provide feed for the mill. Cusi production is
expected to recommence after the mine development work is completed
and once a process can be implemented at the mine to mitigate risk
to employees at the site through a testing and quarantine
methodology similar to the Company’s other operations. Production
will include ore from Santa Rosa de Lima zone, the Promontorio
zone, as well as from a series of east-west vein systems including
the new zone announced today that cross the Cusi fault near Santa
Rosa de Lima zone. Management is targeting a ramp-up to 1,200
tonnes per day by the end of the year, at which point the Cusi mine
is expected to become self-sustainable and cash flow positive.
Additionally, during the second half of the year, studies will
commence on the potential expansion of Cusi. Work will begin on a
new tailing dam near the Mal Paso Mill, providing for tails
deposition capacity for the foreseeable future. Furthermore, infill
drilling will take place at the Santa Rosa de Lima, Promontorio,
and San Nicolas zones to improve and build on mineral resources at
the mine. Management also believes there is further brownfield
potential in areas not previously explored but which are very close
to the Santa Rosa de Lima zone such as those announced earlier in
this press release.
Quality Control
The quality assurance-quality control (QA-QC) program employed
by Sierra Metals has been described in detail in the NI-43-101
report for Cusi dated June, 2018, prepared by SRK Consulting in
Denver, which is available for review on Sedar (Sections 10 and
11). The lithologies logged are used in combination with the assay
data to identify mineralization for the geologic model. Both
geochemistry and assays feature the analyses for the primary
elements to be reported at Cusi (Au, Ag, Pb, Zn).
Qualified Persons
All technical data contained in this news release has been
reviewed and approved by Americo Zuzunaga, FAusIMM (CP Mining
Engineer) and Vice President of Corporate Planning is a Qualified
Person and chartered professional qualifying as a Competent Person
under the Joint Ore Reserves Committee (JORC) Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves.
Augusto Chung, FAusIMM (CP Metallurgist) and Vice President
Special Projects and Metallurgy and a chartered professional
qualifying as a Competent Person on metallurgical processes.
About Sierra Metals
Sierra Metals is a Canadian based growing polymetallic mining
company with production from its Yauricocha Mine in Peru, and it's
Bolivar and Cusi Mines in Mexico. The Company is focused on
increasing production volume and growing mineral resources. Sierra
Metals has recently had several new discoveries and still has
additional brownfield exploration opportunities at all three mines
in Peru and Mexico that are within or close proximity to the
existing mines. Additionally, the Company has large land packages
at all three mines with several prospective regional targets
providing longer-term exploration upside and mineral resource
growth potential.
The common shares of the Company are listed and posted for
trading on the Bolsa de Valores de Lima and on the Toronto Stock
Exchange under the symbol "SMT" and on the NYSE American Exchange
under the symbol "SMTS".
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Forward-Looking
Statements
This press release contains "forward-looking information" and
"forward-looking statements" within the meaning of Canadian and
U.S. securities laws (collectively, "forward-looking
information"). Forward-looking information includes, but is not
limited to, statements with respect to the date of the 2020
Shareholders' Meeting and the anticipated filing of the
Compensation Disclosure. Any statements that express or involve
discussions with respect to predictions, expectations, beliefs,
plans, projections, objectives, assumptions or future events or
performance (often, but not always, using words or phrases such as
"expects", "anticipates", "plans", "projects", "estimates",
"assumes", "intends", "strategy", "goals", "objectives",
"potential" or variations thereof, or stating that certain actions,
events or results "may", "could", "would", "might" or "will" be
taken, occur or be achieved, or the negative of any of these terms
and similar expressions) are not statements of historical fact and
may be forward-looking information.
Forward-looking information is subject to a variety of risks and
uncertainties, which could cause actual events or results to differ
from those reflected in the forward-looking information, including,
without limitation, the risks described under the heading "Risk
Factors" in the Company's annual information form dated March 30,
2020 for its fiscal year ended December 31, 2019 and other risks
identified in the Company's filings with Canadian securities
regulators and the United States Securities and Exchange
Commission, which filings are available at www.sedar.com and
www.sec.gov, respectively.
The risk factors referred to above are not an exhaustive list of
the factors that may affect any of the Company's forward-looking
information. Forward-looking information includes statements about
the future and is inherently uncertain, and the Company's actual
achievements or other future events or conditions may differ
materially from those reflected in the forward-looking information
due to a variety of risks, uncertainties and other factors. The
Company's statements containing forward-looking information are
based on the beliefs, expectations and opinions of management on
the date the statements are made, and the Company does not assume
any obligation to update such forward-looking information if
circumstances or management's beliefs, expectations or opinions
should change, other than as required by applicable law. For the
reasons set forth above, one should not place undue reliance on
forward-looking information.
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version on businesswire.com: https://www.businesswire.com/news/home/20200618005402/en/
For further information regarding Sierra Metals, please visit
www.sierrametals.com or contact:
Mike McAllister, CPIR VP, Investor Relations +1 (416)
366-7777 info@sierrametals.com
J.Alonso Lujan Vice President, Exploration +51 630-3100
+52 614-426-0211
Luis Marchese CEO +1 (416) 366-7777
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