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Tuesday, 27 November 2012
Kootenay Silver starts major 30,000 metre drill program at Promontorio project
Kootenay Silver (CVE:KTN) says that its 30,000 metre drill and resource expansion program on its flagship Promontorio silver project in Sonora, Mexico has officially started.
The company, which closed a fully subscribed $8.25 million brokered private placement financing last month, said at present, two core rigs are operating on the project with a third rig currently in transit.
The campaign is expected to use up to five drill rigs at full capacity, representing the single largest drilling campaign conducted on the Promontorio project to date. The program is designed to increase the overall size of the contained silver resource, and to quicken the path to a production decision.
"We are very pleased and excited to announce our aggressive, multi-phase drill and resource expansion program on the Promontorio Silver project is underway," said CEO James McDonald.
"Due to the accelerated nature of the program, shareholders can expect a steady stream of upcoming drill results coming from the Promontorio camp, as the resource expansion program ramps up over the coming weeks and months."
The company also reported it is now finalizing the expansion of its on-site camp facilities at Promontorio to accommodate the recent increase in camp personnel and work force.
Initial drilling will focus on expanding the known silver resource, beginning with unconfined portions of the higher grade resource in the Pit and Northeast zones.
The company said multi-phase drilling will also include several oriented triple-wall diamond core holes to obtain enough data to help in the preliminary pit design for open pit mining.
In addition, step out drilling will take place on five "high-priority, mineralized stockwork breccia targets" defined by surface exploration and limited drilling that sit outside of the known silver resource, Kootenay added.
The program will also look to upgrade inferred resources into the measured and indicated category at the project through infill drilling.
The company is also continuing with baseline studies to advance the permitting process, and with metallurgical testing to define metal recoveries, as it will begin its preliminary economic assessment study of the property. Specifically, it will focus on determining the gold recovery of the Dorotea region, where gold content is higher than the resource area, Kootenay said.
The PEA study is planned for the end of the drilling campaign, and will include an updated resource estimate with results from the latest drilling.
The report will then form the basis for the pre-feasibility study at Promontorio.
The news today follows the unveiling of an updated resource estimate at Promontorio in August, which saw a near tripling of the resource size. In total, the updated measured and indicated mineral resource at Promontorio contains an estimated 61.679 million ounces of silver equivalent (AgEq), with another 14.469 million ounces of AgEq categorized as inferred.
The significant increase in resources was due to extensive additional drilling of over 37,900 metres. Kootenay said over 22,000 samples were used in the modeled wireframes compared to just over 3,000 for the previous model.
In September, the company completed a sensitivity analysis of varying metal prices at 18, 24 and 36-month trailing averages, and found that when even the most conservative metal prices observed during the 18 to 36 month period were applied, there was less than a 4 per cent variance in Promontorio’s measured and indicated resource.