Wednesday, 25 July 2012

Kootenay Silver says updated Promontorio resource expected in August, additional targets found

Kootenay Silver (CVE:KTN) reported Wednesday that drill hole analysis from over 40,000 metres of drilling at its Promontorio project in Mexico has now been forwarded to a third-party consulting company for the preparation of an updated NI 43-101 compliant resource estimate.

SRK Consulting received the analysis and geologic modeling from drilling on the Northeast zone, the Southwest zone and the Pit zone.

The analysis was done by Kootenay VP of Exploration, Dr. Tom Richards, in conjunction with the company's technical team.

The data included the separation and re-logging of core from a total of 191 individual drill holes, and an in-depth geological interpretation of previous results and how these results pertain to a diatreme system.

The recent definitive recognition of Promontorio as a silver, gold,  lead and zinc diatreme system led to this completed work by the company.

A diatreme is a breccia-filled volcanic pipe or concave body that was formed by a gaseous explosion or hydrostatic forces.

What makes a diatreme system exciting is the upside potential, as some of the world’s largest precious metal deposits are hosted in diatremes, such as Goldcorp’s (TSE:G) Penasquito Mine in Mexico.

Diatreme systems can also keep producing new discoveries over a long period of time.

Kootenay said that the analysis shipped off determined that the gold component from the results at Promontorio represents a "significant" part of the diatreme system, and therefore needs to be quantified and evaluated.

"We are very pleased to conclude the  resource modeling and in-depth analysis of drill core from Promontorio," said CEO James McDonald.

"Based on our findings, it is apparent the prospects for multiple,  additional precious metal discoveries within Promontorio's diatreme  system and lengthy mineralized trend are substantial."

Indeed, the company said several high priority existing and new drill targets have been identified within the diatreme system. This includes the Dorotea Zone,  which is situated roughly 1,600 metres to the northwest of  Promontorio's Pit resource.

The Dorotea Zone has been traced for more than 2 kilometres, and surface sampling and trenching indicate mineralization along at least 1,000 metres of its length.

Highlights from limited step-out drilling in 2009 included hole KP-56-08 that returned 34.5 metres grading 1.73 grams per tonne (g/t) gold  and 74.83 g/t silver and 2.42% lead+zinc, including 9 metres grading 3.28  g/t gold and 173.40 g/t silver and 5.24% lead+zinc.

As a result of some brief delays from  Kootenay's recent core analysis and geologic interpretation of  Promontorio's diatreme system, the company said results from the SRK resource estimate are now  expected to be completed in mid to late August.

The company also said that a recent regional exploration program on the 80,000 hectare Promontorio concession block resulted in new drill targets forming part of the 25 by 15 kilometre northwest trending Promontorio Belt.

Priority targets include the Nopalera, the Tordillo, the La Negra and the Leona zones.

The Nopalera area is comprised of 10 showing areas, five of which are at or near drill ready, the company said. In the zone, 19 grab samples averaged 4.78  g/t gold with values to 56 g/t gold and 197 g/t silver.

The La Negra zone, meanwhile, represents a diatreme breccia noted during a regional  reconnaissance program, which gave values of 72, 29, 22, g/t silver with  anomalous lead, and zinc, Kootenay said.

"The breccias are very similar to the  Promontorio diatreme breccias and airborne geophysics suggests it could  be similar in size," it added.

Kootenay Silver is developing mineral projects in the  Sierra Madre region of Mexico and in British Columbia, Canada, with its flagship property being the Promontorio mine in Sonora State.

Currently, Promontorio itself hosts an NI 43-101-compliant resource containing 8.9 million indicated ounces of silver plus 1.17 million ounces of inferred silver, 99.3 million indicated pounds of lead plus 13.4 million inferred pounds of lead, and 110.8 million indicated pounds of zinc plus 14.3 million inferred pounds of zinc.

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