Western Silver hits more gold in Penasco oxide zone

Vancouver – Western Silver (WTC-V) is finding more high-grade gold and silver at the Penasco zone on its wholly-owned Penasquito precious and base metal project in Zacatecas State in central Mexico.

Drilling last month by the company returned a wide swath of high-grade gold mineralization at the Peasco zone. The next set of results from another 14 coreholes were released. Six of these holes are in the Outcrop breccia (Penasco) zone, where the high-grade gold was recently discovered. The eight other holes are from Azul NE, La Palma and El Chamisal zones.

Hole WC-128, drilled 200 metres east and parallel to WC-108 along the eastern contact of the Outcrop breccia, intersected almost 70 metres of oxide mineralization beginning at 18 metres averaging 3.17 grams gold and 55 grams silver per tonne. This included 2 metres of high-grade gold beginning at 68 meters averaging 93.1 grams. Previously reported WC-108 contains 60.5 metres of 0.85 grams gold and 81 grams silver beginning at a depth of 9.5 metres.

Three other holes (WC-119A, WC-123 and WC-127), drilled at 50 metre intervals as part of an east-west fence between WC-108 and WC-128, also contain significant oxide and sulphide mineralization. Drilling continues to target the shallow oxide/sulphide zone to the north and south along the eastern margin of the Outcrop breccia.

Peasco appears to be zoned, with an upper gold-enriched zone grading downward into silver-lead-zinc mineralization around the margins of the breccia. The Outcrop breccia pipe is 1.7 km northwest of the Chile Colorado zone.

Low to medium gold grades were intersected in three of the five holes drilled near the contact of the Azul breccia.

Two holes at La Palma and one at El Chamisal each intersected approximately two metre intervals of high-grade gold, from 5.5 grams to 18.15 grams. Mineralization is contained within carbonate veins and the veinlets interpreted as a more distal part of the mineralized system.

An independent prefeasibility study concluded that Chile Colorado can be economically mined to generate an estimated after-tax internal rate of return of 15.3% with a payback period of about five years.

Peasco’s oxide and sulphide zones will likely be included in a full feasibility study, slated for completion in 2005. A resource estimate of Peasco is expected in several months.