Project Overview

The Valenciana Mining District is located in northern Zacatecas State, on the Mesa Central, a high plateau between the Sierra Madre Oriental and the Sierra Madre Occidental mountain ranges. This region is in the heart of the “Mexican Silver Trend”, a belt which hosts such major deposits and mining camps as Fresnillo, Guanajuato, La Colorada, La Preciosa, La Pitarrilla, and Guanacevi.

The Valenciana Project mineral concessions are located immediately north of the village of Valenciana, approximately 25 kilometres southeast of the town of Juan Aldama and 25 kilometres northwest of the mining district of Nieves. Also in the Valenciana District is the adjacent past-producing Providencia Mine, west of the Valenciana Project.

The early history of the Valenciana Mining District is not well documented. However, there is evidence of several small shafts on the property and a larger amount of work having been conducted on the neighbouring Providencia Mine, with a portal from the north side and several underground levels. The earliest work probably occurred back in the 1800s, with the more recent mining work from the 1970s.

The exploration team from La Cuesta International revived interest in the District in the mid-1990s. Key to this phase was a diamond drilling program conducted in 1996 by Pan American Silver Corp., with 10 of the holes being located on the current Valenciana Project concessions. A major worldwide exploration downturn occurred in the late 1990s and the concessions were returned to the vendors.

Silver Standard Resources (the current SSR Mining) optioned the project in the mid-2000s and conducted a program of shallow reverse-circulation drill holes, including 11 RC holes on the current property. Surface lithogeochemistry (334 rock chip samples) and soil geochemistry (762 soil samples) were taken as well as several lines of induced-polarization geophysics and radiometrics.

Extensively altered clastic sediments are the dominant rock types in the Valenciana area, which correlate with the Upper Cretaceous age Caracol and Indidura Formations. To the west, these are intruded by a highly altered monzonitic porphyry stock (possibly Tertiary) and are capped by rhyolitic lithic tuffs and agglomerate.

The main Valenciana Vein is an east-southeast striking and steeply southward dipping quartz-sulphide epithermal system, which has been traced for over 2.7 kilometres. Gold and silver are the principal targets, along with the base metals lead and zinc. The silver mineral argentite, native gold, blackjack sphalerite and galena have been identified on site.

The average drill hole depth is approximately 150 metres, with 10 diamond drill holes and 11 reverse-circulation holes. The deepest hole struck high-grade mineralization at about 300 metres down-hole, with 2.19 metres assaying 2.50 g/t Au, 1,115 g/t Ag, for a silver-equivalent of 1,328 g/t, plus 1.9% combined Pb+Zn.

Select Drill Intercepts – Silver Equivalent Ag-Eq = Ag + 85*Au. Base metals not included in Ag-Eq grade.