Advance pushes 100-million-ounce silver mark with new Mexican project

Advance Metals has locked in the right to earn up to 100 per cent of the high-grade Guadalupe y Calvo gold-silver project in the northwest Mexican state of Chihuahua, providing the company with a non-JORC compliant foreign estimate of more than 100 million ounces silver-equivalent across three projects.

Advance has signed a binding agreement with the United States and Canadian-listed miner and explorer Endeavour Silver Corp to fully acquire the project over four years.

An open stope from historic mining at the Guadalupe y Calvo gold-silver project, recently secured by Advance Metals, in the northwest Mexican state of Chihuahua.

The project contains a solid gold foreign estimate that adds to the company’s growing silver stack. It is in the same region as the high-grade Copalquin gold-silver project being explored by ASX-listed Mithril Silver and Gold, about 80 kilometres southwest.

Guadalupe y Calvo comprises a non-JORC compliant foreign estimate of 9.5 million tonnes grading 2.7 grams per tonne (g/t) gold-equivalent for 816,000 ounces gold-equivalent or 60.6M ounces silver-equivalent.

The silver component complements previous foreign estimates of 17.23M ounces silver-equivalent at its Yoquivo project, about 245km northwest, and 22.4M ounces silver-equivalent at its Gavilanes project in the state of Durango, to total more than a stellar 100M silver-equivalent ounces.

‘Advance is now positioned as the largest ASX participant in the silver-gold exploration and development space in Mexico, with enormous upside potential from all three of our projects.’

Advance Metals managing director Dr Adam McKinnon

Previous highlight drilling results at Guadalupe y Calvo from an estimated 86,000 metres of exploration and resource definition drilling include 6.5m at 3.6g/t gold and 3646g/t silver from 38.5m, 15m going 16.8g/t gold with 373g/t silver from 36m and a 4m chunk of 15.9g/t gold and 1225g/t silver from a depth of 290m.

Narrow high-grade intervals of 1.45m grading 23.4g/t gold and 1105g/t silver from 86.6m and a 1.95m slice at 22.5g/t gold and 1456g/t silver from 553m add to the impressive drill results.

The foreign estimate contains a high-grade indicated and inferred underground portion consisting of 3.05Mt running at 5g/t gold-equivalent for an impressive 494,000 gold-equivalent ounces.

Advance Metals managing director Dr Adam McKinnon said: “The acquisition of Guadalupe y Calvo is transformational for Advance Metals, taking the company’s endowment in Mexico to over 100M ounces silver-equivalent across three high-quality projects. Advance is now positioned as the largest ASX participant in the silver-gold exploration and development space in Mexico, with enormous upside potential from all three of our projects.”

The project includes 10 granted concessions across a 27.5 square kilometre area, with year-round access via paved and gravel roads in a region renowned for strong community infrastructure and a skilled mining workforce. It sits in the prolific Sierra Madre Volcanic Belt in the southwestern portion of Chihuahua.

The region has a long history of precious metals mining, with gold and silver mined in the project area since at least 1835. Historic production is estimated at more than 2M ounces of gold and 31M ounces of silver.

Advance procured the project by paying a signing fee of US$50,000 (A$76,500) cash and US$50,000 worth of fully paid Advance shares. In what appears to be a canny deal, most of the further payments are heavily back-ended. Advance will pay $100,000 cash and $100,000 in company shares at the end of year one, plus $250,000 in exploration expenditure during the first year. In comparison, at the end of the fourth year, it will be due to pay $850,000 in cash and $1 million in company shares and spend $250,000 on exploration.

In total, the company will pay the vendor US$4 million (A$6.12 million) in cash payments and shares to earn full ownership of the project.

Advance will soon begin further exploration at Guadalupe y Calvo and, subject to receiving the requisite approvals, it plans to leverage the operating expertise, existing infrastructure and its established team already in place in Mexico. It aims to soon complete a confirmatory and extension drilling program at the site.

Advance is also planning initial surface exploration to refine high-priority drill targets for the upcoming program.

The company will look to ramp up an on-site and database review to verify the foreign estimate as a mineral resource under the 2012 JORC code. It may need to complete further sampling and/or drilling to complete the verification. Advance plans to fund the required work from its existing cash reserves.

Management says the recent maiden drilling campaign at the high-grade Yoquivo silver-gold project returned impressive results, such as 23.8 metres averaging 85g/t silver equivalent from 100m, along with a 16.4m hit at 104g/t silver-equivalent from 133m and 21.2m going 55g/t silver-equivalent from a depth of 162.9m. It will now look to expedite rapid growth across its expanding Mexican portfolio.

The Mexican projects add to several equally impressive Victorian gold projects on Advance’s books. It has restarted diamond drilling at its Myrtleford gold project in the Victorian goldfields, where it is following up a 7.9m high-grade gold hit that kicked up a sterling 47.9g/t.

With the silver price touching US$38.90 (A$59.52) per ounce in the past week, its highest level since August 2011, Advance’s Mexican push for the precious metal may prove to be a wise pursuit.

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