Pan American hits high-grade at La Colorada in Mexico

A 14,300-metre drill program completed during the third quarter at the La Colorada skarn discovery in Mexico has returned high-grade intercepts for Pan American Silver (TSX: PAAS; NASDAQ: PAAS).

Drill highlights include 379 metres grading 54 grams silver per tonne, 0.5% copper, 1.96% lead and 3.73% zinc starting from 473 metres in hole 79-19.

Hole 57-01-19 returned 251 metres grading 40 grams silver, 0.08% copper, 2.57% lead and 3.43% zinc starting from 1,051 metres downhole, including 79 metres grading 60 grams silver, 0.09% copper, 3.9% lead and 4.48% zinc.

Hole 57-02-19 intercepted 72 metres grading 37 grams silver, 0.16% copper, 3.8% lead and 6.25% zinc from 1,180 metres, and 57 metres grading 39 grams silver per tonne, 0.1% copper, 3.31% lead and 6.64% zinc.

Other highlights include 125 metres grading 42 grams silver, 0.08% copper, 2.41% lead and 3.14% zinc from 1,069 metres in hole 57-19, and 253 metres grading 67 grams silver, 0.19% copper, 3.84% lead and 6.56% zinc from 501 metres, including 27 metres grading 108 grams silver, 0.2% copper, 8.14% lead and 13.7% zinc in hole 66-19.

The La Colorada mine, 99 km south of the city of Durango and 156 km northwest of the city of Zacatecas, is Pan American’s largest silver producing mine. Pan American acquired the mine in 1998 through its wholly owned Mexican subsidiary, Plata Pan Americana.

The company discovered high-grade mineralization in limestone replacement mantos and thick intercepts of skarn mineralization at depth in October 2018. The skarn mineralization comprises coarse sphalerite, galena and chalcopyrite within a classic skarn mineral assemblage, which has similar characteristics to mineralization at other large Mexican skarn deposits.

Christopher Emerson, Pan American’s vice president business, development and geology, says the most recent drill results feature some of the highest grade intercepts the company has seen to date.

The drilling continues to define a polymetallic mineralized skarn system and cross-cutting veins starting 300 metres below and adjacent to the current lowest production level of the La Colorada mine. Drill holes 57-01-19 and 57-02-19 were drilled 200 metres to the southwest of a mineralized hydrothermal breccia zone.

The company expects to complete more than 50,000 metres of drilling this year and provide an initial resource estimate by the end of 2019. An intensive exploration program and further metallurgical testing will continue in 2020.

In addition to the drilling program, UEX has advanced initial metallurgical testing at the independent ALS Metallurgy laboratory in Kamloops.

The company has performed flotation tests and mineral liberalization analysis on three composites samples. The average preliminary bulk rougher flotation recovery results are 95% for silver and lead, 83% for zinc and 80% for copper.

At press time, Pan American Silver was trading at $21.96 per share with a 52-week trading range of $13.93 to $25.99. The company has 210 million common shares outstanding for a $4.6-billion market capitalization.