(1) Block Caving/Mechanized Bulk Mining Cut-Off Grade of 52 g/t Ag.EQ or NSR $30/t. See Table 3 for more details(2) Ag.EQ: Silver Equivalent ounces based on 3-yr trailing average commodity prices of US$1455/oz.Au; US$28.10/oz.Ag; US$1.00/lb Pb and US$0.96/lb Zn applying estimated Mill and Smelter recoveries(3) Bulk Zones includes the Fernandez Zone (Fringe & Endoskarn) and the Trovador Vein Zone(4) Totals may not add up correctly due to rounding
SGS-Canada recognizes in addition to the above-mentioned Inferred and Indicated Resources that there are areas within recognized structures and depth extensions which will require additional drilling and can offer additional Mineral Potential of between:
20 to 50 million tonnes grading 100 to 150 g/t AgEQ
More specifically the Additional Mineral Potential includes those tonnes contained within the 23 outlined mineralized envelopes that fall under either one of those 2 categories:
-- Unclassified tonnes above applicable cut-offs;-- Classified resources that are below cut-offs;-- As well as the down-depth and strike-length extensions to the mineralized structures.
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The potential quantity and grade reported as Mineral Potential, is conceptual in nature, that there has been insufficient exploration to define a mineral resource and that it is uncertain if further exploration will result in the target being delineated as a mineral resource.
The SGS Study and Resource Estimate confirms that San Diego is a large, new Silver-Lead-Zinc rich deposit which lies on the Velardena Mine trend to the east of the Santa Juana Mine (Golden Minerals Corporation) and the Santa Maria Mine (Industrias Penoles), both of which have seen continuous metal production throughout the last century.
The Updated Resource Estimate was conducted on 21 Vein Zones of primarily sulphide mineralization with oxide portions limited to the near-surface environment. This Estimate is also reporting for the first time Resources for the newly discovered Fernandez Zone (see 2012 press releases of: September 24; October 15; November 26; and December 13) and confirms it is a large and well constrained body of mineralization. Moreover, the Study identifies significant Additional Resource Potential and recognizes that many zones remain open for further extension and continuity in all zones is excellent. Overall, four particular areas are considered to offer independent mine-building potential:
-- The Trovador Zone located along the southern boundary of the Fernandez Zone having a minimum true width of 5 m with nearby massive sulphide mantos-style lenses of mineralization in the MS Zone;-- The Montanez Zone, a single surface vein which develops into three extensive but closely spaced veins at depth - the Montanez FW, Central and HW Veins;-- The Fernandez zone which can be divided up into the Endoskarn and Fringe Zones and represents a potential low-grade bulk-mining target; and lastly,-- The remaining sixteen (16) individual narrow high grade veins and stringer zones which form a suite of veins extending as regular sheets from surface to depth.
Four (4) cut-off grades (see Table 3) were used to estimate sulphide resources in the present Study. These reflect different potential mining methods that could be considered for mining the various types and widths of mineralization found on the San Diego property.