Cosala District Exploration
| Introduction | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Scorpio Mining is a major land holder in the Cosalá district with 29,161 ha spanning an area of ~23 km x 19 km. The land position covers over 40 known exploration targets including historically producing mines. Multiple types and styles of mineralization are present in the district, including low- and high-sulphide silver, zinc, copper, lead and gold; silver-gold stockwork; porphyry copper; magnetite; and wollastonite. Through the Platte River acquisition, Scorpio obtained several advanced projects including the San Rafael silver-lead-zinc-copper-gold deposit and El Cajón silver-copper-gold deposit, both having NI 43-101 compliant mineral resource estimates. In addition, Scorpio acquired the operating La Verde silver-copper mine.
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| San Rafael Deposit | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The San Rafael deposit is located approximately 17 km by road from the Nuestra Señora processing facility and has all-weather road access, power and water. Previously the San Rafael mineral occurrence was thought to be composed of three distinct bodies hosted in skarn: the Main Zone, Upper Zone and 120 Zone. Drilling completed by Scorpio has focused on defining proposed open pit boundaries of the Main Zone and the in-fill drilling of widely-spaced intersections from prior drilling campaigns. Currently, drilling is following a fourth new manto-like body discovered to the northwest of the main deposit area (North Extension Zone). This new manto body has the potential to add to the current mineral resource estimates reported for San Rafael, presented below. Initial results of the ongoing 2011-2012 drill program at San Rafael are presented in the Corporation's November 7, 2011 and March 6, 2012 press releases. Highlights include:
Detailed geology, drill hole locations and selected drill results are presented in the following plan map and longitudinal section. << Please visit full website to view images. >>  San Rafael Detailed Plan Map (2.8 Mb)  San Rafael Longitudinal Section (1.4 Mb) San Rafael Main Zone The zinc-lead-silver Main Zone is a discrete, tabular, massive sulfide body at the contact between the overlying volcanics and the underlying limestones. The massive sulfide mineralization often contains greater that 75% sulfides and is zinc, lead and silver dominant with only weak copper and gold. The mineralized body lies 5 m below surface at its shallowest point and is currently defined on average 700 m in length, 15 to 20 m in thickness, and extends down dip for 300 m continuously and up to 500 m discontinuously. Mineralization is open on strike in both directions. Due to its configuration and relatively shallow depth, San Rafael may be amenable to low-cost, open-pit mining. An internal study has been conducted on the extraction of the deposit by both open pit and underground mining methods,taking into account metallurgical recoveries. San Rafael Upper Zone The silver-gold dominant Upper Zone occurs within near surface volcanic rocks along the east side of the San Rafael deposit. It lies 50 to 100 m stratigraphically above, and sub-parallel to, the up-dip extension of the Main Zone massive sulfide. The zone can be up to 15 m in thickness and the mineralization remains open on strike in both directions. A mineral resource estimate for the San Rafael Main and Upper zones was prepared by Mine Development Associates of Reno, Nevada ("MDA") in 2009. Diamond drilling to increase the resource base and support an upgrade to reserve category is in progress, and completion of the of an updated NI 43-101 compliant mineral reserve and resource estimate is expected in Q2-2012. Table 1. Mineral Resource Estimate - San Rafael Main Zone & Upper Zone - August 12, 2009 << Drag to view table >>
San Rafael 120 Zone The silver-copper-gold dominated 120 Zone lies within the eastern portion of the San Rafael deposit and occurs primarily at depth below the up-dip extension of the Main Zone massive sulfide. The upper portion of the 120 Zone mineralization extends up through and overlaps the Main Zone massive sulphide. As currently defined, the 120 Zone is on average 500 m in length, 250 m in width, and extends to a depth of about 350 m below the surface (open on strike and at depth). An internal study has been conducted on the extraction of the deposit by both open pit and underground mining methods,taking into account metallurgical recoveries. MDA prepared the following mineral resource estimate for the San Rafael 120 Zone in 2009. Diamond drilling to increase the resource base and support an upgrade to reserve category is in progress, and completion of the of an updated NI 43-101 compliant mineral reserve and resource estimate is expected in Q2-2012. Table 2. Mineral Resource Estimate - San Rafael 120 Zone - August 12, 2009 << Drag to view table >>
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| El Cajon Deposit | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The El Cajón Ag-Cu-Au deposit is located approximately 14 km by road from the Nuestra Señora processing facility and has all-weather road access, power and water. The deposit is similar in mineralization style and geological setting to the San Rafael 120 Zone. The disseminated mineralization is hosted within a skarn-altered limestone country rock along the east and north sides of a diorite intrusive stock. Skarn mineralization can be found up to 150 m from the diorite contact. Metal deposition is associated with generally 2 to 5% disseminated sulfides and isolated high metal grades occurring with 50% sulfide content. The deposit, as currently defined, is roughly circular in plan view with a diameter of approximately 450 m. The mineralization is aligned along the general 330 degree strike trend and has an elevation range of 200 m along the intrusive contact. El Cajón has been outlined with 25- to 50-m drill spacing and is open to expansion. Preliminary metallurgical work completed to date reports acceptable industry normal recoveries. An internal study has reviewed the economics of exploitation of the deposit by underground extraction.
MDA prepared the following mineral resource estimate for the El Cajón Deposit in 2009. Table 3. Mineral Resource Estimate - El Cajón Deposit - October 8, 2009 << Drag to view table >>
Paul Tietz, C.P.G. (AIPG) and Steve Ristorcelli, R.P.G. of MDA are the Qualified Persons for the above mineral resource estimates on San Rafael and El Cajón deposits. A NI 43-101 technical report to support the resource estimates was filed on Sedar Dec 4, 2009. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Advanced Projects | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| La Verde Mine The La Verde mine is located approximately 24 km by road from the Nuestra Señora processing facility and has all-weather road access, power and water. The mine has been in production since 1988 and has historically produced ~1.4 million tonnes of ore at grades ranging 105-180 g/t silver and 0.4-0.6% copper. Since being acquired by Minera Platte River Gold in 2008, mine production was leased to a private contract mining company. Production during 2010 by non-mechanized methods totalled 121,000 tonnes grading 114 g/t silver and 0.44% copper, with silver and copper recoveries of 78% and 82%, respectively. Scorpio assumed control of the operation in early 2011 and commenced refurbishment for improved safety and future production. In addition, over 8,000 tonnes of La Verde ore were processed at the Nuestra Señora plant during 2011 to determine metallurgical performance. Work completed to date and currently in progress at the La Verde Mine includes:
Los Venados Deposit The Los Venados silver-copper-zinc-lead deposit is located approximately 10 km from the town of Cosalá and has all-weather road access, power and water. A total of 18 surface drill holes have tested the deposit to date. An additional 15 to 20 drill holes in the deposit may support an initial resource estimation. Table 5. Los Venados Surface Drill Hole Results << Drag to view table >>
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| Exploration | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exploration plans for 2012 include surface and underground diamond drilling on multiple deposits/targets in the Cosalá District, Sinaloa and on projects in the Parral District, Chihuahua. Exploration drilling in the Cosalá District is planned to include a minimum of:
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| Technical Reports | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
