Soltoro making its name in Jalisco

When it comes to exploration in Mexico’s Jalisco State, Soltoro (SOL-V) has carved itself out as the junior of stature.

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

The strategy has been gaining momentum in recent months with advancement of two key option deals.

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

Argentum recently reported strong assays from10 holes drilled on the La Florida and La Colorada veins at the property which will only serve to firm up the company’s commitment to the deal.

The option agreement signed between the two companies in the spring of 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 2 years. Soltoro would be left with a 3% net smelter return.

The second key deal is for its La Tortuga property, where it recently received an option payment of US$100,000 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 in the property 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 zeroing its own focus in on its flagship El Rayo, which sits just south of the town 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 way back 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 lay just off of a paved road, and the site has access to water, power and labor supply from Guachinango.

Since acquiring the project back in 2005 Soltoro has focused on 4 structures: Las Bolas, Highway, La Soledad and the historic Catarina Mine.

Together the zones stretch out 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. of silver and inferred resources of 0.58 million tonnes grading 65.51 grams silver for 1.18 million oz.

Individually, 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.

To the southeast of Las Bolas, lies the Highway Zone, which has returned a highlight intercept of 12 metres grading 216 grams silver.

One of the more recently discovered zones is known as Soledad, which is south of Las Bolas and west of Highway. Thus far it has a strike length of 600 metres, 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.

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

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 currently has a strike length of 500 metres, but is open at both ends and mineralization has been defined down to the 250 metre level.

And if Soltoro didn’t already have enough on its plate at El Rayo, its latest drilling campaign hit a new zone. The zone sits at the south end of the Las Bolas structure and returned 4.5 metres grading 378 grams of silver.

Soltoro has 66.8 million shares issued on a fully diluted basis and working capital of roughly $7 million. The company’s key shareholders include Pinetree Capital (PNP-T), which has a 5.3% stake and Coeur d’Alene Mines (CDM-T, CDE-N), which has a 7.6% stake in the company.