Tuesday, October 09, 2007
Silvermex Options San Marcial Property from Silver Standard
Silvermex is pleased to report an option agreement with Silver Standard Resources Inc. (Nasdaq- SSRI: TSX-SSO) of Vancouver, B.C., to purchase a 100% interest in Silver Standard's San Marcial silver project in Sinaloa State, Mexico. The 4.8 square mile (1,250 hectare) property is located 56 miles (90 kilometres) east of Mazatlan in west central Mexico.
A resource estimate prepared for Silver Standard on the San Marcial Property, using the CIM definitions for mineral resources as required by National Instrument 43-101, estimates an Inferred Mineral Resource of 14.26 million ounces of silver (2.31 million tonnes grading 191.79 g/t silver.)
Based on work to date, a number of bulk mineable silver targets have been identified at San Marcial. The most advanced of these targets is the San Marcial SE and NW zone which extends for 450 metres along strike and is open in both directions and at depth.
The best values to date are found in holes SM-4 and SM-5 in San Marcial SE from a drilling program completed by Gold Ore Resources Ltd. in January 2001.
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Drill Hole From To Interval Silver Interval Silver
(in metres) Grade (in feet) Grade
(g/tonne) (oz./ton)
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SM-4 3.0 69.0 66.0 205.9 216.5 6.0
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incl. 6.0 21.0 15.0 637.0 49.2 18.6
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SM-5 1.4 36.0 34.6 205.3 113.5 6.0
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incl. 1.4 9.0 7.6 415.1 24.9 12.1
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incl. 15.0 21.0 6.0 342.7 19.7 10.0
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Silvermex's objective in acquiring the San Marcial property is to define an inferred silver resource in excess of 50 million ounces.
Under the terms of the Silver Standard agreement, Silvermex can acquire a 100% interest by issuing 1 million common shares upon Exchange acceptance, a further 1 million shares on each of the first and second anniversaries, and a lump sum payment in either cash or shares at the election of Silver Standard, on the third anniversary. The lump sum payment will be calculated by deducting the deemed value of the above share issuances from either US$15,000,000 if the price of silver is $15.00 per ounce or less, or US$18,000,000 if the price of silver is above US$15.00 per ounce. Silvermex must also expend US$3.5 million on exploration over 3 years and provide Silver Standard with an updated resource estimate based on such expenditures. Silvermex is also obligated to pay Silver Standard an additional US$0.50 per ounce of silver in any resource category in excess of 14.26 million ounces, determined by the resource estimate to be present on the property. Further, in the event the results of the $3.5 million program increase the resource to 100 million ounces of silver equivalent (silver and gold). Silver Standard has the option to back-in for 50% of the property by spending an additional $10.5 million on exploration. Silver Standard would then become the operator of the property.
The issuance of the initial 1 million shares to Silver Standard will result in Silver Standard owning 3.5 million shares of Silvermex, which will increase its interest in Silvermex to 15.32% prior to any further share issuances.
Qualified Person
Pursuant to National Instrument 43-101, Darcy Krohman, P.Geo., C.A,. Executive Vice-President and CFO of Silvermex Resources Ltd. is the Qualified Person (QP) responsible for the disclosure in this news release
For Further information, contact:
Bruce Bragagnolo, LLB.
CEO
Vancouver, B.C. Canada
Tel: 604-638-8980
bruce@silvermexresources.com
Darcy Krohman, P.Geo., C.A.
Executive Vice-President & CFO
Vancouver, BC, Canada
Tel: 604-638-8971
darcy@silvermexresources.com
For Investor Relations, contact:
Jason Leikam
Corporate Development
Vancouver, BC, Canada
Tel: 604-638-8979
jason@silvermexresources.com
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
This News Release contains forward-looking statements. Forward looking statements are statements which relate to future events. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans, "anticipates", believes", "estimates", "predicts", "potential", or "continue or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, level of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements.
While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect out current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggests herein. Except as required by applicable law the Company does not intend to update any forward-looking statements to conform these statements to actual results.