Pinguino Exploration Historical Review
Argentex began exploration activities at Pinguino in late 2004. Between 2004 and 2009, the Company completed five phases of exploration, which included 269 diamond drill holes (30,037 meters), 311 trenches, geological mapping, geochemical sampling and geophysical surveys. The exploration data provided sufficient density to interpret the basic structural geology from which a resource estimate was made on nine of the known veins. That phase of work was reported in the National Instrument ("NI") 43-101 compliant Report "Resource Estimate for the Pinguino Silver, Zinc, Indium, Lead, Gold Occurrence", dated October 28, 2009 (News Release, October 29, 2009).
Argentex subsequently evaluated the data used in the 2009 resource estimate and undertook scoping-level studies of the mining and processing potential of the property. These evaluations led to the NI 43-101 compliant "Pinguino Property Preliminary Economic Assessment 2011", dated August 5, 2011, (results reported in News Release, March 22, 2011).
From 2010 to 2012, Argentex completed three additional exploration programs (Phase VI through to VIII), which included 153 diamond drill holes (16,838 metres), 255 reverse circulation drill holes ("RC") (19,610 metres) and 38,300 meters of trenching, all of which improved the geological interpretation of the vein structures. The Company also initiated metallurgical studies (ALS Ammtec and G&T Metallurgical Services Ltd.) with the goal of identifying preliminary recoveries of the oxide, transition and sulphide zones, and to further assist in understanding the Pinguino vein system. The phase VI - VIII exploration programs were focused on defining and expanding resources in the oxide and transition zones of known vein systems, and to test identified vein structures having the potential to build resources.
The resource model is based on a database of 677 drill holes (66,455 metres), and 744 surface trenches (42,019 metres), all completed between 2004 and 2012 in exploration phases I through VIII. Of the 36 veins drill tested to date only 8 of the most intensely explored veins (Marta Este, Marta Norte, Marta Centro, Marta Noroeste, Marta Sur, Ivonne, Marta Oeste and Tranquilo) were selected to be included in the resource model. These eight veins were focused on in recent drill programs to define near surface high grade silver and gold oxide material. This is a first step towards defining an open pit minable resource as part of a future Preliminary Economic Assessment (PEA).
The Company believes there is significant scope for increasing the mineral resource reported at Pinguino. Six other veins were evaluated for potential resources but will require additional drilling before they qualify. Total metal silver-equivalent ounces could range from four to eight million equivalent ounces, with silver grades ranging from 70 to 90 grams per tonne and gold grades ranging from one to two grams per tonne. This range of potential quantity and grade is based on the mapped strike length of the veins and the existing, albeit relatively sparse, drill and trench sample assays. The potential quantity and grade are conceptual in nature, as there is insufficient work to define a mineral resource, and it is uncertain if further exploration will result in the targets being delineated as a mineral resource. The remainder of the tested (and untested) veins will also require additional exploration and drilling before their resources can be estimated.
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