Orex, Canasil strike again at Sandra Escobar

VANCOUVER — Partners Orex Minerals (TSXV: REX; US-OTC: ORXIF) and Canasil Resources (CVE: CLZ) have ignited a discovery at their Sandra Escobar silver project, 183 km northeast of the city of Durango, Mexico.

The pair hit 26 metres of 156 grams silver per tonne in a drill hole at the Burro zone, 350 metres west of the Main zone of stratiform-hosted, epithermal silver mineralization on the property.

Ben Whiting, vice-president of exploration for Orex, tells The Northern Miner during a phone interview that it’s “possible” the two zones connect.

“They’re similar in elevation, rock type and styles of mineralization,” he says. “And we don’t know how much further west the new zone could go either, so it’s all looking very positive.”

Only months ago, Whiting says Sandra Escobar was a project with nothing but “dull grey rocks” at surface and anomalous stream sediment samples.

Early morning mist over Orex Minerals and Canasil Resources’ Sandra Escobar silver project, Durango state, Mexico. Credit: Ben Whiting.

A core sample of mineralized crystal lithic tuff from the Sandra Escobar silver project in Durango state, Mexico. Credit: Ben Whiting.

Yet the project sits in the heart of the Mexican Silver Trend — home to one of the world’s largest silver camps and deposits, including Fresnillo, Guanajuato, La Pitarrilla, La Preciosa, Real de Angeles and Zacatecas.

Being a veteran explorer in Durango state and backed by a management team that discovered Coeur Mining’s (NYSE: CDE) La Preciosa silver-gold deposit, Orex became interested and signed on with Canasil in September last year.

Under the agreement Orex can earn 55% of the project with a $500,000 upfront payment, followed by US$2 million in exploration expenses over three years. It can earn another 10% by spending US$2 million along with a cash payment of $500,000.

In January this year, the partners announced a drill intercept of 43.1 metres of 359 grams silver in the first hole of the maiden drill program. Since then, Whiting says the footprint of mineralization is 550-by-200 metres, averages 35 metres thick and is open to the south and west.

Drill core at the Sandra Escobar silver project, Durango state, Mexico. Credit: Orex Minerals.

He notes that mineralization is mostly native silver and silver halides, which work well with heap-leach operations.

“We haven’t had this project for long, but we’ve moved ahead quickly, and we’re at a stage where people are asking how much it has,” he says. “We’re looking at getting a maiden resource on it, which gets us on the scoreboard for a lot of mining analysts.

“It’s not our intention to go into production. What we do is add value to a project and at some point we reach a stage where it’s appropriate to place it with a producing mining company.”

The partners have contracted consulting firm Mining Plus to calculate the resource and expect to release the results by August.

Whiting says drilling will resume in June or July to expand mineralization at the Main and Burro zones, and will test other targets on the 69.8 sq. km property.

Sandra Escobar formed when structurally controlled, silver-rich fluids became trapped underneath an impenetrable rhyolitic cap and flushed laterally into a porous volcaniclastic horizon.

“There are no regional examples similar to Sandra Escobar. It doesn’t have the bright red gossan that people like to bang their hammers on,” he says. “But once you develop an eye for it, it’s easy to see where the favourable horizons are. So maybe in a couple of years we’ll see deposits like this one all over the place.”

Orex has traded in a 52-week range of 10¢ to 84¢ per share and last closed at 84¢. Canasil last traded at 40¢ within a 52-week range of 3¢ to 44¢.