South American Silver
Advances Escalones and Malku Khota Projects
Drilling Underway at Escalones; Updated Economic Assessment in Q2 at
Malku Khota
27 February 2012, Vancouver,
British Columbia-South American Silver Corp. (TSX:SAC, US OTC: SOHAF) is progressing the exploration and development
programs that are now underway at both the Escalones copper-gold and Malku
Khota silver-indium projects with 27,000 meters of combined drilling planned at
both projects along with engineering and metallurgical test work.
Highlights:
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Escalones copper-gold project NI 43-101 technical
report now filed on newly defined Inferred Resource of 420 million tonnes of
mineralized material containing 3.8 billion lbs of copper, 56.9 million lbs of
molybdenum, 610,000 ozs of gold and 16.8 million ozs of silver using a 0.2% Cu
Equivalent cut-off grade (see December 19th, 2011 News Release). The
detailed NI 43-101 Technical Report is now available on SEDAR and on the
Company's website at www.soamsilver.com.
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Escalones drilling currently underway for
Phase II exploration program with
approximately 7,000 meters of drilling planned into Q2-2012.
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Escalones resource update targeted for
mid-2012 with Preliminary Economic Assessment Q4-2012.
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Malku Khota exploration program underway
to support a planned 20,000 meters of in-fill and expansion drilling.
� Malku Khota Pre-feasibility level engineering work in
progress focused on optimization and production
level expansion opportunities with an updated Economic Assessment study
targeted for release Q2-2012. Feasibility
activities are scheduled to begin in the second half of 2012.
Escalones Copper-Gold Project
The Escalones copper-gold
project is located in the world-class central Chilean mining district which
includes the nearby El Teniente deposit - the world's largest underground
copper mine. The project is accessible by road and is approximately 100 kilometers
south-east of Santiago. South American Silver has just filed a detailed NI
43-101 technical report for the Escalones resource estimate in February 2012.
The newly defined Inferred
Resource of 420 million tonnes of mineralized material contains 3.8 billion lbs
of copper, 56.9 million lbs of molybdenum, 610,000 ozs of gold and 16.8 million
ozs of silver at a grade of 0.41% copper, 0.05 g/t gold, 1.24 g/t silver and 61
ppm molybdenum using a 0.2% Cu Equivalent cut-off grade (see December 19th,
2011 News Release). This is a copper-equivalent content of 4.5 billion lbs of
copper grading 0.49% based on approximate 3-year average metal prices as of
December 2011.
The Escalones deposit remains
open to expansion laterally and down dip with 90% of the current resource
hosted in copper, gold and silver replacement-style mineralization, and one
drill hole testing porphyry-style mineralization. Initial interpretation of a
ZTEM and aeromagnetic survey shows several large areas of untested conductivity
anomalies which may represent areas of potential additional sulfide
mineralization related to both replacement style and porphyry mineralization.
2D and 3D modeling and interpretation of these geophysical targets is in
progress.
A Phase II exploration
program is underway with two core drills currently working on the site. Work
will focus on understanding the scale of the system by testing both porphyry
and replacement-style mineralized zones. Step out drilling will focus on known
mineralized areas and test new targets based on the recently completed aerial
ZTEM and magnetic surveys. The planned program will
include 7,000 meters of drilling to complete a resource update in mid-2012.
Initial engineering work including metallurgical testwork is planned to
determine recovery of copper, gold, silver and molybdenum and concentrate
characteristics for a Preliminary Economic Assessment study targeted for
Q4-2012.
Updates
on Escalones will be provided as drill results and geophysical interpretations
are completed.
Malku Khota
Silver-Indium-Gallium Project
South American Silver's more
advanced project is the Malku Khota silver-indium-gallium project located in
the world-class silver mining district of central Bolivia, approximately 200
kilometers north of Potosi. Malku Khota is one of the world's largest silver,
indium and gallium resources with a NI 43-101-qualified Indicated Resource of
255 million tonnes of mineralized material containing 230.3 million ozs of
silver, 1,481 tonnes of indium and 1,082 tonnes of gallium at a grade of 28.7
g/t silver, 5.8 g/t indium and 4.3 g/t gallium (43.8 g/t silver equivalent),
and an additional Inferred Resource of 230 million tonnes containing 140
million ozs of silver, 935 tonnes of indium, and 1,001 tonnes of gallium at a
grade of 18.9 g/t silver, 4.1 g/t indium and 4.3 g/t gallium (33.0 g/t silver
equivalent). An updated Preliminary Economic Assessment study in May 2011
showed robust economics for a bulk-mineable heap leach operation with the
potential to be one of the largest new silver, indium and gallium producing
mines in development with over 13.2 million ounces of silver production
annually over the first 5 years. The project is road-accessible, with
commercial scale natural gas and electricity nearby.
Pre-feasibility level
engineering and metallurgical process work is underway to further optimize the
project production levels and process flowsheet. These studies have looked at
increasing overall scale and potentially including a
milling scenario for higher grade material that leaches better when milled. An
updated NI 43-101 qualified Economic Assessment study based on the work over
the past year for Malku Khota is targeted for release in Q2-2012. In addition,
exploration activities are underway to support a
planned 20,000 meter drill program. With the typical conclusion of the rainy
season in February, drill roads and drill pads are being developed with
drilling planned to start on the project in March. This drill program will
include infill drilling to convert inferred resources to measured and indicated
resources and eventually into reserves and to test further resource expansion
at depth and between the two known deposits. To date, only about 30% of the
known prospective mineralized host stratigraphy at Malku Khota has been drill
tested. The 2012 drill program will also include drilling to test several
additional high-priority, near surface targets based on surface sampling and
geophysics.
Due to the bulk mineable and
heap leachable nature of the deposit, there remains excellent potential to
continue to expand production levels beyond the 13.2 million ounces of silver
per year level in the 2011 Economic Assessment study through further
optimization of the resource and increases in overall mine throughput. Current
optimization studies are targeting expansion of annual silver production toward
18 to 20 million ounces per year as part of the updated Economic Assessment and
would make Malku Khota one of the largest producing silver mines in the world.
Over the past year South American
Silver has significantly broadened its community relations activities and the
Company has entered into Impact and Benefit-type agreements with local
indigenous communities to facilitate local economic and business development
through the various stages of project implementation. The project contributes
significantly to the local economy and it is estimated that the construction
phase would likely create as many as 1,000 new jobs in the region with over 400
full time workers directly employed during mine operations. Feasibility and
baseline environmental work is planned to begin in the second half of 2012. The
Company anticipates continuing to build on its community relations initiatives
to support the feasibility and permitting stages in 2012 and 2013.
About
South American Silver Corp.
South American Silver Corp.
is a growth focused mineral exploration company creating value through the
exploration and development of the Malku Khota (100%) project in Bolivia, one
of the world's largest undeveloped silver-indium-gallium deposits, and the
large-scale Escalones (100%) copper-gold project in Chile. The Company's
approach to business combines the team's track record of discovery and
advancement of large projects, key operational and process expertise, and
effective community relations to increase shareholder value. Management has
extensive experience in the global exploration and mining industry with much of
that focused in Bolivia, Chile, Peru and Argentina. The Company's shares are
listed on the Toronto Stock Exchange under the symbol "SAC" and on
the US OTC market as "SOHAF". Additional information related to
South American Silver Corp. is available at www.soamsilver.com
and on SEDAR at www.sedar.com
South
American Silver Corp. Contact:
Investor
Relations
Phone:
604.681.6926
Toll
Free: 1.855.681.6926 www.soamsilver.com
Forward-looking statements
Forward-looking statements look into the future and provide an opinion
as to the effect of certain events and trends on the business. Forward-looking
statements may include words such as "plans", "intends",
"anticipates", "should", "estimates",
"expects", "believes", "indicates",
"suggests", "targeted",
"scheduled", "will" and "may" and
similar expressions. This release contains forward-looking statements. These
forward-looking statements are based on current expectations and various
estimates, factors and assumptions and involve known and unknown risks,
uncertainties and other factors. Information concerning mineral resource
estimates and the interpretation of ZTEM and aeromagnetic surveys
results may also be considered as a forward-looking statement; as such
information constitutes a prediction of what mineralization might be found to
be present if and when a project is actually developed.
It is important to note that: Readers are cautioned not to place undue
reliance on these statements as the Company's actual results, performance or
achievements may differ materially from any future results, performance or
achievements expressed or implied by such forward-looking statements if known
or unknown risks, uncertainties or other factors affect the Company's business,
or if the Company's estimates or assumptions prove inaccurate. Therefore, the
Company cannot provide any assurance that forward-looking statements will
materialize. Factors that could cause results or events to differ materially
from current expectations expressed or implied by the forward-looking
statements, include, but are not limited to, possible variations in mineral
resources, grade, metal prices; availability of sufficient financing to fund
further required work in a timely manner and on acceptable terms; changes in
project parameters as plans continue to be refined; availability of equipment;
failure of equipment or processes to operate as anticipated; local community
support, and political,
regulatory, environmental and other risks of the mining industry and other
risks more fully described in the Company's annual information form filed and
publicly available on SEDAR at www.sedar.com. Although the Company has attempted to identify
important factors that could cause actual results to differ materially from
those contained in forward looking statements, there may be other factors that
cause results to be materially different from those planned, estimated,
forecasted, projected or expected. Readers are cautioned not to place undue
reliance on the forward-looking statements contained in this press release.
Subject to applicable laws, the Company assumes no obligation to update or
revise any forward-looking statement, whether as a result of new information,
future events or any other reason.
The material assumptions that were applied in making the forward
looking statements in this release or referenced in this release include, but
are not limited to: statements regarding estimated mineral resources and the
potential for delineation of additional resources through further exploration
at the Escalones and Malku Khota projects; the accuracy of current
interpretation of drill and other exploration results; and execution of the
Company's existing plans or exploration programs for its properties, either of
which may change due to changes in the views of the Company or if new
information arises which makes it prudent to change such plans or programs.
Subject to applicable laws, the Company assumes no obligation to update
or revise any forward-looking statement, whether as a result of new
information, future events or any other reason. Unless otherwise indicated,
forward-looking statements in this release describe the Company's expectations
as of February 27, 2012.
This press release uses the terms 'measured resources', 'indicated
resources' and 'inferred resources' which are terms recognized and required by
Canadian regulations (under National Instrument 43-101 Standards of Disclosure
for Mineral Projects), however, these terms are not defined terms under SEC
Industry Guide 7 and normally are not permitted to be used in reports and
registration statements filed with the United States Securities and Exchange
Commission. Investors are cautioned not to assume that any part or all of the
mineral deposits in these categories will be converted into reserves. In
addition, 'inferred resources' have a great amount of uncertainty as to their
existence, and economic and legal feasibility. It cannot be assumed that an
inferred resource will be upgraded to a higher category. Under Canadian rules,
estimates of inferred resources may not form the basis of feasibility or
pre-feasibility studies, or economic studies except for preliminary economic
assessment as defined under NI 43-101. Investors are cautioned not to assume
that part or all of an inferred resource exists, or is economically or legally
mineable.