TSX.V: SCZ
FSE: 1SZ
VANCOUVER, May 29, 2017 /CNW/ - Santacruz Silver
Mining Ltd. (TSX.V:SCZ) ("Santacruz") announced today
that its wholly-owned subsidiary, Impulsora Minera Santacruz S.A.
de C.V. (together with Santacruz the "Company"), has entered into
an agreement with Grupo Mexico (the "Agreement") pursuant to which
the Company has acquired the exclusive right for five years (the
"Exclusive Mining Right") to explore, develop and mine the
Membrillo silver-zinc-lead-gold vein structure (the "Membrillo
Vein") situated approximately four km from the Company's Rosario
Project mill facility located near Charcas, San Luis Potosi, Mexico. The
Exclusive Mining Right covers an area of approximately 500 hectares
situated within the San Rafael concession. This brings the total
area of the Company's exploration and exploitation rights to
approximately 958 hectares of the 2912 hectares comprising the San
Rafael concession.
As consideration for the Exclusive Mining Right, Grupo Mexico
will receive an annual fee of US$60,000 from the Company and has been granted a
3.0% net smelter returns royalty on any mineralized material from
the Membrillo Vein that is mined and milled or otherwise treated
for the eventual sale of the contained metal.
The Membrillo Vein is hosted in shales and sandstones of the
Triassic Zacatecas Formation. On surface the vein structure trends
southeast for a distance of approximately 1.5 kilometres and dips
approximately 45-60 degrees to the southwest. Mineralization within
the vein structure is comprised of irregular and lenticular bodies
containing sphalerite, galena, chalcopyrite and silver-bearing and
gold-bearing minerals associated with quartz-carbonate infilling.
The thickness of mineralization is variable and ranges from several
centimetres to several metres wide. Historical records obtained
from Servicio Geologico de Mexico
("SGM"), formerly known as the Consejo de Recursos Minerales
("CRM"), indicate that between 1978 and 1981 the Membrillo Vein was
tested with 35 drill holes totalling 4,237 metres completed along a
strike length of 1.2 kilometres.
With the concurrence of Grupo Mexico, the Company began mining
development work at the Membrillo Vein late in the fourth quarter
of 2016 and to date has completed approximately 816 metres of
development drifting on Level 1 and is now advancing a ramp (145
metres completed to date) to Level 2 which will be 30 metres below
Level 1. To date, 7,504 tonnes of mineralized material from
development works have been delivered to the Rosario Project mill
facility for processing, with an average head grade of 30 g/t Ag;
0.24 g/t Au; 2.73% Zn; and 0.34% Pb.
The Company expects that, once full mining operations have been
achieved at the Membrillo Vein, the combined daily production from
the Membrillo Vein and the Cinco Estrellas property will range from
450 to 500 tpd with an additional 100 to 150 tpd of mineralized
material being delivered to the Rosario Project mill facility from
the Rosario Mine. This diversification of feed to the Rosario
Project's mill gives management much greater flexibility in
developing and executing its operations plan at the Rosario
Project.
"We have added yet another mineral source to further capitalize
on the mill capacity at Rosario,"
said Arturo Préstamo, President and CEO of Santacruz. "This
Exclusive Mining Right grows our partnership with Grupo Mexico in
this historic mining region. In addition, we believe this
transaction could serve as a strong indication to other regional
property holders of our willingness to consider entering into
mutually beneficial commercial agreements with them."
Sampling and laboratory
The reported head grades have been estimated from assay results
of samples collected from stockpiles of mined mineralized material.
Blanks, standards and duplicate control samples were not utilized
in the sampling procedure.
Samples collected from Membrillo Vein are assayed at the
Rosario laboratory, which is owned
and operated by Santacruz. The Rosario laboratory is designed to serve the
mining operations at the Rosario
project. It is not independent of the Company and is not ISO
certified. Samples are prepared by drying, crushing, rifle
splitting and pulverizing to less than 75 microns passing 200 mesh.
Samples are analyzed by three-acid digestion and atomic absorption
spectrometry. Gold and silver are further analyzed by fire assay
with gravimetric finish.
Qualified persons
The technical information contained in this news release has
been reviewed and approved by Van Phu
Bui, B.Sc., P. Geo., who is independent of the Company and a
"qualified person" under National Instrument 43-101.
About Santacruz Silver Mining Ltd.
Santacruz is a Mexican focused silver company with two producing
silver projects (the Rosario
project and milling facility, including the Cinco Estrellas
property and the Membrillo Vein, and the right to operate the
Veta Grande silver project and
milling facility); and three exploration properties including the
Gavilanes property, Minillas property and Zacatecas properties, including the
Panuco deposit. The Company is
managed by a technical team of professionals with proven track
records in developing, operating and discovering silver mines in
Mexico. Our corporate objective is
to become a mid-tier silver producer.
'signed'
Arturo Préstamo Elizondo,
President, Chief Executive Officer and Director
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward looking information
Certain statements contained in this news release including
planned production levels constitute "forward-looking information"
as such term is used in applicable Canadian securities laws.
Forward-looking information is based on plans, expectations and
estimates of management at the date the information is provided and
is subject to certain factors and assumptions. In making the
forward-looking statements included in this news release, the
Company has applied several material assumptions, including, but
not limited to, that the Company's financial condition and
development plans do not change as a result of unforeseen events,
that third party ore to be milled by the Company has properties
consistent with management's expectations, that the Company obtains
all required regulatory approvals, and that future metal prices and
the demand and market outlook for metals remains stable or
improves. Forward-looking information is subject to a variety
of risks and uncertainties and other factors that could cause
plans, estimates and actual results to vary materially from those
projected in such forward-looking information. Factors that
could cause the forward-looking information in this news release to
change or to be inaccurate include, but are not limited to, the
risk that any of the assumptions referred to prove not to be valid
or reliable, which could result in lower revenue, higher cost,
lower production levels, delays, and/or cessation in planned work,
that the Company's financial condition and development plans
change, delays in regulatory approval, risks associated with the
interpretation of data (including in respect of the third party
ore), the geology, grade and continuity of mineral deposits, the
possibility that results will not be consistent with the Company's
expectations, as well as the other risks and uncertainties
applicable to mineral exploration and development activities and to
the Company as set forth in the Company's continuous disclosure
filings filed under the Company's profile at www.sedar.com. There
can be no assurance that any forward-looking information will prove
to be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
the reader should not place any undue reliance on forward-looking
information or statements. The Company undertakes no obligation to
update forward-looking information or statements, other than as
required by applicable law.
Rosario Project
The decisions to commence production at the Rosario Mine,
Cinco Estrellas Property and Membrillo Vein were not based on a
feasibility study of mineral reserves demonstrating economic and
technical viability. Accordingly, there is increased uncertainty
and economic and technical risks of failure associated with this
production decision. Production and economic variables may vary
considerably, due to the absence of a complete and detailed site
analysis according to and in accordance with NI 43-101.
Veta Grande Project
The decision to commence production at the Veta Grande
Project was not based on a feasibility study on mineral reserves
demonstrating economic and technical viability. Accordingly,
there is increased uncertainty and economic and technical risks of
failure associated with this production decision. Production
and economic variables may vary considerably due to the absence of
a complete and detailed site analysis according to and in
accordance with NI 43-101.
SOURCE SantaCruz Silver Mining Ltd.