Solitario Likes Pachuca Real Results

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

It has a massive stake over one of Mexico’s most historically productive silver areas with its Pachuca Real silver-gold property, in the central part of the country. And it has a joint-venture partner with a wealth of experience — Newmont Mining (NMC-T, NEM-N) — running exploration at the project.

In mid-September, the companies announced that two of the nine holes in the most recent 3,368- metre drilling campaign returned high silver grades.

Highlights from drilling included: 2.55 metres grading 0.17 gram gold and 37 grams silver per tonne in hole 8; and 1 metre averaging 0.09 gram gold and 63.8 grams silver in hole 9.

Both holes also returned multiple high-grade sections with intervals shorter than 1 metre.

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

Holes 8 and 9 sit in the central part of the large 463-sq.-km Pachuca Real claim block.

After news of the results was released, the company’s shares climbed to $4.97 from $4.50 apiece — a 10% gain.

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

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

Solitario’s property spans 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.

Solitario and Newmont signed a joint-venture agreement in September 2006 calling for Newmont to complete $12 million worth of work per year over a 4.5-year period for a 51% interest in the project.

Newmont can earn another 14% stake by spending $5 million annually through to the completion of a feasibility study.