Solitario likes Newmont’s results

These are good times for Solitario Resources (SLR-T, XPL-X).

It has a massive stake over one of Mexicos most historically productive silver areas with its Pachuca Real silver-gold property in the central part of the country, and it has Newmont Minings (NEM-N, NMC-T) wealth of experience running exploration.

On Sept. 20 the companies announced that two of the nine holes in its most recent 3,368 metre drill phase returned high silver grades.

• Hole PAC-08 2.55 metres grading 0.17 grams gold and 37 grams silver per tonne
• Hole PAC-09 1 metre grading 0.09 grams gold and 63.8 grams silver

Both holes also returned multiple high grade intersects but over areas less than one metre.

As for the other seven holes, Solitario says anomalous mineralization was intersected in all of them. All the holes were spaced over nine separate prospects within a large district.

Holes PAC-09 and PAC-08 sit in the central part of the large 463 sq. km Pachuca Real claim block.

Since news of the results was released, the companys shares have climbed to $4.97 from $4.50 — a 10% gain.

Thus far Newmont has finished roughly 40% of its phase-one 7,500 meter drill program but has put drilling on hold until early 2008 while it maps and samples old underground workings. Newmont is trying to delineate patterns for ore-controlling structures.

The Pachuca mining district was once a prolific silver district with some 1.4 billion ounces of silver and just over 7 million ounces of gold pulled out of the ground.

Solitario’s property spans over roughly 30% of the historic district and covers 95% of the possible extensions of the district to the north. The current drill program is the first modern day exploration to test the North District.

The area of active exploration has never been drill tested as it had been locked up by the Mexican government for the past 50 years. The initial results appear to show identical geology and the same style of high-grade silver-gold mineralization, Christopher Herald, Solitarios chief executive told Resource Investor.

The agreement between Solitario and Newmont was signed in September of 2006 and calls for Newmont to do $12 million worth of work a year over a 4.5 year period. If it does, Newmont earns a 51% interest in the project.

It can earn another 14% by spending $5 million annually through to the completion of feasibility.