Soltoro making its name in Jalisco

When it comes to exploring Mexico’s Jalisco State for silver and gold, Soltoro (SOL-V) is a junior of stature.

With roughly 550 sq. km of ground in the state, the company has been optioning out of some permits and funneling the cash generated towards the apple of its eye, El Rayo.

The strategy has gained momentum in recent months, with two key option deals advanced.

The first is a deal with Argentum Silver (ASL-V) for Soltoro’s Victoria and Coyote projects.

Argentum recently reported strong assays from 10 holes drilled on the La Florida and La Colorada veins at the property, which could firm up the company’s commitment to the deal.  

The option agreement signed between the two companies early last year lets Argentum earn a full interest in Victoria and Coyote by issuing 5 million shares and $255,000 in cash to Soltoro, and spending $1.1 million on exploration over two years. Soltoro would be left with a 3% net smelter return royalty.

The second key deal is for its La Tortuga property, where it recently received a US$100,000 option payment from Gold Reserve (GRZ-V, GRZ-X).

Gold Reserve plans to carry out a drill program on the property this year and can earn a 51% stake by paying Soltoro US$650,000 in cash and spending US$3 million on the property over three years.

After that it can acquire another 9% for US$2 million.

With cash and equity being generated by such projects, Soltoro is focusing on its flagship El Rayo south of Guachinango — the former capital of Jalisco.

The property sits within a 70-km mineralized trend and is contiguous to Grupo Mexico’s El Barqueno gold deposits. Both projects are within the rich historic mining district of Guachinango, which was first exploited by the Spaniards in 1546.

El Rayo itself holds numerous mineralized trends where gold, silver and lead have been extracted from 16 historic underground mines.

But it isn’t just the history that has made El Rayo Soltoro’s prized asset. The cluster of deposits that it has defined are located near a paved road, and the site has access to water, power and labour supply from Guachinango.

Since acquiring the project in 2005 Soltoro has focused on four structures: Las Bolas, Highway, La Soledad and the historic Catarina mine.

Together the zones stretch over a 3.5-km strike length and have measured and indicated resources of 42.2 million tonnes grading 57.1 grams silver for 77.4 million oz. silver, and inferred resources of 0.58 million tonnes grading 65.51 grams silver for 1.18 million oz. silver.

Las Bolas is the largest deposit, with 1.2 km of strike length and highlight drill intercepts of 90 metres grading 150 grams silver, and 260 metres grading 50 grams silver.
The Highway zone — southeast of Las Bolas — has returned a highlight intercept of 12 metres grading 216 grams silver.

One of the more recently discovered zones is Soledad, which is south of Las Bolas and west of Highway.

It has a 600-metre strike length defined by 45 holes, and its high-grade silver shoots have returned highlight intercepts of 7 metres grading 1,010 grams silver, 6.9 metres grading 527 grams silver and 62 metres grading 182 grams silver.

Farther south of Soledad is the Catarina historic mine, where the Geological Survey of Mexico defined a historic, non-compliant resource of 5 million to 7 million oz. silver in the late 1980s.

Soltoro has been drilling to confirm and expand those numbers, and its focus on a zone underneath the old mine has yielded an impressive assay of 46 metres grading 115 grams silver.

The zone has a strike length of 500 metres but remains open at both ends. Mineralization has been defined down to the 250-metre level.

Soltoro has enough on its plate with El Rayo, but its latest drilling campaign has also hit a new zone. The zone sits at the south end of the Las Bolas structure and returned 4.5 metres grading 378 grams silver.

Soltoro has 66.8 million shares issued on a fully diluted basis, and working capital of $7 million.

The company’s key shareholders include Pinetree Capital (PNP-T), which has a 5.3% stake in the company, and Coeur d’Alene Mines (CDM-T, CDE-N), which has a 7.6% stake.