Infill drill results from Fortuna Silver Mines’ (FVI-V, FVITF-o) 33,000-metre program at the San Jose silver-gold project in Oaxaca, Mexico, are starting to come in.
Drilling began in June to upgrade more of the inferred resources to the indicated category so that the company can proceed with a prefeasibility study.
Highlights from the program, carried out at 31-metre spacing intervals, include hole 127 with a 29.1- metre intersection grading 6.75 grams gold per tonne and 933 grams silver, starting from 394 metres depth.
Hole 128 cut 15.1 metres grading 5.7 grams gold and 1,022 grams silver from 296.5 metres depth. And hole 121 returned 20.6 metres of 8.89 grams gold and 752 grams silver.
The current focus is the Trinidad zone. Two surface rigs and two multipurpose reverse-circulation/ core drill rigs are still in action.
Fortuna says the assays were calculated using a cutoff grade of 100 grams silver equivalent per tonne and true widths of the veins are between 75-90% of the drill intervals.
San Jose’s last resource estimate tallied data from three veins: Trinidad, Bonanza and Paloma. Indicated resources stand at 1.47 million tonnes grading 262 grams silver and 2.19 grams gold per tonne for a total of 12.42 million oz. silver and 103,500 oz. gold. More than half of the resource comes from the Trinidad vein.
Inferred resources include two additional zones: the Stockwork zone and the Bonanza splay vein were not included in the indicated category.
Inferred resources total 3.9 million tonnes grading 260.6 grams silver per tonne and 2.57 grams gold for a total of 32.7 million contained ounces silver and 321,500 oz. gold. The bulk of the inferred resources are from the Trinidad and Bonanza zones.
The San Jose project is part of a 560-sq.-km property in the Taviche mining district in the southern part of Oaxaca.
The deposit is a low-sulphidation epithermal system mineralized by quartz-carbonate-sulphide veins, hydrothermal breccias and stockwork veining within a sequence of Tertiary andesitic volcanic and volcaniclastic rocks.
Fortuna, which currently owns 76% of the project alongside joint-venture partner Continuum Resources (CNU-V, CUUEF-o), will soon hold the full project. In August, Fortuna made a friendly offer to buy Continuum for about $8.8 million in shares. The deal, which is subject to regulatory and other approvals, offered 7 million Fortuna shares for all of Continuum’s 124 million shares outstanding.
Fortuna has been working on underground development of the access ramp to the Trinidad zone since the fourth quarter of 2007 and expects to reach the sixth level at 150 metres depth by December.
The company is also working on engineering studies including mine design work, metallurgical testing, tailings dam design work and hydrological investigations.
An environmental impact study is under way and the company has been speaking to the local community about the project.
Fortuna shares closed up 5 at $1.16 apiece on the drill results on a trading volume of 111,000 shares.
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