The company said that each unit consists of one common share and one share purchase warrant, exercisable to purchase one additional common share for a period of three years at a price of 17 cents per share.

In early April, the company announced revised plans to issue up to 20 million units at a price of $0.12 to $0.10 each, for gross proceeds of $2.0 million.

The new funds from the first tranche of the offering will be used for exploration and property maintenance expenses incurred on Southern’s Cerro Las Minitas project in Mexico, and the Oro gold-silver-copper project in New Mexico, USA, where a 20,000 metre drill program is currently underway.

In early April, Southern unveiled drilling results that extend high grade silver-polymetallic mineralization at the Blind and El Sol zones on the Cerro Las Minitas project in Durango State, Mexico.

At the El Sol zone, drilling returned a 26.1 metre interval averaging 67 grams per tonne (g/t) silver, 2.8% lead, and 3.3% zinc, or 239 g/t silver equivalent, including 1.8 metres at 163 g/t silver, 6.9% lead and 8.8% zinc, or 619 g/t silver equivalent in hole 12CLM-044.

Meanwhile, at the Blind zone, drilling continues to delineate both the lateral extent and internal continuity of the mineralized zone, the company said.

Results from the northwest extension of the zone include 4.6 metres averaging 146 g/t silver, 3.0% lead and 2.8% zinc, or 472 g/t silver equivalent, from hole 12CLM-041; and 4.2 metres of 145 g/t silver, 2.7% lead and 2.0% zinc, or 305 g/t silver equivalent, from hole 12CLM-043.

The silver miner has scheduled 20,000 metres of core drilling in 2012 at the property, with the aim of completing an NI 43-101 compliant resource on these first set of targets by the fourth quarter.

The property comprises 18 concessions that total 15,125 hectares and an approximate 25 kilometre strike length.
Southern Silver is a precious and base metal exploration company. It aims to acquire, explore and develop properties in progressive jurisdictions within North America.

Its current projects include the silver-lead-zinc Cerro Las Mintas project and the copper-gold-silver Minas de Ameca project in Mexico, the porphyry copper-molybdenum Dragoon project in Arizona and the gold-silver Oro project in New Mexico.

These two metals are expected to see a sharp boost in demand, leading to a predicted shortage in materials for electronics like iPads and Kindles starting in 2017, and an anticipated increase in prices.

Demand for both silver and tin is driven by the fact that both metals are key components in solder alloys that meet the Restriction of Hazardous Substances (RoHS) directive implemented in the EU in 2006.

The directive, which took effect in July of 2006, recognizes that a large proportion of electronic waste will never be recycled, and therefore the materials within devices will dissipate into the environment. For example, when lead is used in substances such as the solder that connects components to a circuit board in an electronic device, there is no way the lead can be collected.

As a result, the EU said that substances like solder, at least within devices intended for sale in the region, must not contain any of the hazardous materials the directive is concerned with, including lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls and diphenyl ether.

Because of this new law, the search for a new standard solder in the electronics industry began, resulting in a mixture of tin and silver - putting pressure on supplies for both of these metals.

Byron Capital says that from the period of 2004 to 2011, prices for both tin and silver have been appreciating markedly. The firm noted in a recent report that many electronic manufacturers have decided to use lead-free solders on all versions of their products - whether shipping to regions in which RoHS regulations pertain, or not - as it is logistically simpler.

Hykawy says that a shortfall in tin supply is of particular concern, as mining production levels suggest growth rates of tin output are "anemic".

Tin, which is an LME-traded metal, had the lowest warehouse availability of any LME-traded metal at only 10,000 tonnes as of February 22.

Byron predicts that non-investment demand for tin will jump from around 362,000 tonnes last year to more than 544,000 tonnes by 2020. Silver demand, meanwhile, is expected to go up from 844 million ounces in 2011 to over 1 billion ounces by 2020 as demand for silver in the construction of solar modules is also accelerating quickly.

Prices for tin, according to Byron, are projected to more than double to $59,047 per tonne in 2018, while prices for silver are expected to rise to $68.88 per ounce in 2018 - when silver is anticipated to reach critical supply levels - from $35.11 in 2011.

"Global growth is driven by people, energy and materials, and of these materials, more tin and silver is needed or we will have a potentially dangerous supply situation on our hands," says Hykawy.

After an enlightening talk on critical materials used in hybrid, electric and fuel cell vehicles from General Motors' Dr. Yucong Wang, South American Silver's (TSE:SAC) investor relations manager, Robert Gill, spoke on the company's silver and indium assets in Bolivia on Thursday.

Indium's current primary application is to form transparent electrodes from indium tin oxide in liquid crystal displays and touchscreens, and this use largely determines its global mining production.

It is also used for making particularly low melting point alloys, and is a component in some lead-free solders.

South American's Malku Khota project in Bolivia, which is listed by Byton as one of the major new silver projects coming on stream, is one of the world’s largest undeveloped silver and indium resources with an NI 43-101-qualified indicated resource of 230.3 million ounces of silver and 1,481 tonnes of indium, plus an inferred resource of 140 million ounces silver and 935 tonnes indium.

An updated preliminary economic assessment, released last year, showed a net present value of $704 million at a five percent discount rate for a 40,000 tonne per day bulk mineable heap leach operation. Projected silver production is 13.2 million ounces per year, with 80 tonnes of indium per year.

Gill says that the company, with $26.6 million in cash, is due to release a pre-feasibility level update in the second quarter of this year, with feasibility work to start in the second half of 2012.

Other noteworthy companies in the silver sector include Southern Silver (CVE:SSV), SilverCrest Mines (CVE:SVL)(OTCQX:STVZF), Silver Bull Resources (TSE:SVB)(AMEX:SVBL), Great Panther Silver (TSE:GPR)(AMEX:GPL), Orko Silver (CVE:OK), and Arian Silver (CVE:AGQ)(AIM:AGQ).

Southern Silver Exploration

Southern Silver Exploration is a Canadian precious and base metals explorer with mining ventures in Mexico, New Mexico and Arizona.

At its Cerro Las Minitas project in Mexico, Southern Silver has scheduled 20,000 metres of core drilling in 2012, with the aim of completing an NI 43-101 compliant resource on its first set of targets by the fourth quarter.  This will be the initial milestone toward the company's goal of delineating a larger, multi-million tonne, high-grade, silver-enriched polymetallic resource on the project.

Assay results from hole 12CLM-030 returned a 1.1 metre interval averaging 250 grams per tonne (g/t) silver, 10.7% lead and 16.95 zinc (1,007 g/t silver equivalent) at a vertical depth of approximately 270 metres.

SilverCrest Mines

Precious metals producer SilverCrest Mines, meanwhile, is focused on production from its Santa Elena Mine in Sonora, Mexico, which started commercial production in July of last year.

The company recently announced that silver production in the first quarter from its Santa Elena Mine more than doubled while gold production almost tripled year-over-year.

For the first quarter, silver production jumped 108 percent to 134,528 ounces, from 64,712 ounces a year ago, when the mine, which is now in commercial production, was still in the commissioning phase. Silver equivalent ounces sold soared 339 percent to 641,532 ounces from 146,219 in the first quarter one year ago.

The mine is a high-grade, epithermal gold and silver producer, with an estimated life of mine cash cost of US$8 per ounce of silver equivalent.

SilverCrest anticipates that the mine should recover around 4,805,000 ounces of silver and 179,000 ounces of gold over the 6.5 year life of the open pit phase.

Silver Bull Resources

Silver Bull Resources is a silver and zinc-focused explorer, whose flagship project is Sierra Mojada in Mexico. The property is located 150 kilometres north of the city of Torreon in Coahuila, Mexico and is highly prospective for silver and zinc. The explorer said that the third in a series of NI 43-101 resource updates is anticipated in the second quarter of 2012.

Given the drilling results to date for Silver Bull, it is anticipated that the next report for the property will show a substantial increase in the silver resource at Sierra Mojada, as well as including a resource for the significant zinc mineralization seen on the project.

Recent drill results from the site include 8.45 metres of massive sulphide grading 16.98% zinc, 5.45% lead, and 57.29 grams per tonne (g/t) silver in a previously untested zone 500 metres to the north of the Shallow Silver Zone.

Overall, Silver Bull has acquired or has options to acquire mineral concessions totaling 15,833 hectares in the Sierra Mojada Mining District. The company has been working on the Sierra Mojada property since 1997 and has completed over 80,000 metres of drilling.

The Vancouver-headquartered miner also owns three mineral exploration licences in Gabon, Africa, two of which are currently under joint venture with AngloGold Ashanti (NYSE:AU).

Great Panther Silver

Vancouver-headquartered Great Panther Silver is a silver miner focused on its two wholly-owned operating mines in Mexico - Guanajuato and Topia.

Since commencing operations at these two mines in 2006, Great Panther has achieved continuous growth in metal production in excess of 20 percent per year until 2010, when the company saw record production of 2.3 million silver equivalent ounces.

In 2012, Great Panther expects to deliver production of 2.5 to 2.75 million silver equivalent ounces, an increase of 14 to 25 percent from 2011.

Orko Silver

Another company with robust assets in the silver sector includes Orko Silver, which earlier this month regained 100 percent ownership in its La Preciosa property in Mexico.

In early April, Pan American Silver (TSE:PAA)(NASDAQ:PAAS) relinquished its right to earn a 55 percent interest in the La Preciosa project, one of the world's largest primary silver deposits, after it decided not to deliver feasibility study before an April 13, 2012 deadline.

Orko Silver's chief executive Gary Cope confirmed that four unnamed mining companies had "expressed an interest" in the project, with Orko signing standstill agreements with two of these parties.

La Preciosa is located in Durango State, which envelops the heart of Mexico’s prolific Sierra Madre Mining Belt, and includes large silver deposits such as Fresnillo and Pitarrilla.

An August 2011 preliminary economic assessment (PEA) gave an estimated mineral resource containing 113 million ounces of silver classified as indicated and a further 46 million ounces of silver classified as inferred. In addition, the deposit contains over 222,000 ounces of indicated gold and 83,000 ounces of gold in the inferred category.

The PEA showed an after-tax net present value of $315 million at a five percent discount rate, and a 24.3 percent internal rate of return. The results assumed prices of $25 per ounce of silver and $1,250 per ounce of gold.

Arian Silver

Mexico-focused Arian Silver, meanwhile, is an emerging producer, that in March unveiled an updated NI 43-101 mineral resource estimate for its 100 percent-owned San José property in Zacatecas State.

Resource tonnage was up 29 percent along the San José Vein (SJV) from a July 2011 estimate, while contained ounces of silver were up 32 percent.

The company said that in the indicated category, the resource contained 8 million tonnes at an average grade of 119 grams per tonne (g/t) silver, 0.38% lead and 0.85% zinc. Contained metal comprised 30.61 million ounces of silver, 67.02 million pounds of lead and 149.91 million pounds of zinc.

In the inferred category, the resource contained 24.5 million tonnes at an average grade of 110 g/t silver, 0.38% lead and 0.76% zinc. Contained metal comprised 86.65 million ounces of silver, 205.25 million pounds of lead and 410.50 million pounds of zinc.

Mineralization remains open along the western and eastern strikes of the main vein, and to depth, with further drilling planned.

Silver Standard

On the tin side, Byron Capital listed Silver Standard Resources' (TSE:SSO) (NASDAQ:SSRI) Pirquitas Mine in northern Argentina as one of the new tin projects globally. The mine is the company's first major mining operation, and commercial production started in December 2009. At full production, it is estimated the mine will produce an average of around eight to ten million ounces of silver and ten to twelve million pounds of zinc annually, ranking Pirquitas among the largest primary silver mines in the world, the company says.

The silver and zinc concentrates produced from the plant are shipped to various smelters around the world.

Other new projects for tin listed are Eurotin's (CVE:TIN) Oropesa project in Spain, Kasbah Resources’ (ASX:KAS) Achmmach property in Morocco, anticipated to come on stream in 2017, and Consolidated Tin Mines' (ASX:CSD) Mount Garnet asset in Australia.

At its Cerro Las Minitas project in Mexico, diamond drilling with two core rigs continues, with one rig dedicated to the continued delineation of mineralization in the Blind and El Sol zones.

The second drill rig is testing specific occurrences located within the area of historic mining as well as several targets derived from the surface sampling and IP geophysical program.

The company said that several geological and geophysical targets are yet to be tested within this portion of the property.

Southern Silver has scheduled 20,000 metres of core drilling in 2012 at the property, with the aim of completing an NI 43-101 compliant resource on these first set of targets by the fourth quarter.

This will be the initial milestone toward the company's goal of delineating a larger, multi-million tonne, high-grade, silver-enriched polymetallic resource on the project.

Twenty-nine drill holes totaling approximately 8,030 metres were completed on the project in 2011. An additional 4,630 metres in 20 drill holes have been completed to date in 2012, with one additional hole is in progress.

Earlier this month, Southern Silver said it identified silver-enriched high-grade polymetallic mineralization in several separate target areas on its Cerro Las Minitas project.

The property comprises 18 concessions that total 15,125 hectares and an approximate 25 kilometre strike length.

Assay results from hole 12CLM-030 returned a 1.1 metre interval averaging 250 grams per tonne (g/t) silver, 10.7% lead and 16.95 zinc (1,007 g/t silver equivalent) at a vertical depth of approximately 270 metres.

For its Dragoon property in Arizona, the company reported Wednesday that optionee Freeport-McMoRan Exploration Corp. has completed a single drill hole at the project, which is located 90 kilometres southeast of Tucson.

The hole, DS-12-03, which is located around 175 metres to the north of hole DS-11-02, was drilled to a total depth of 1170 metres and is currently being logged and sampled. Assays are pending.

Separately, the company also said that at its annual general meeting held last week, directors Lawrence Page, Q.C., Scott Hean, Terrence Eyton, D. Roger Scammell, Dale Janowsky, Nazlin Rahemtulla, and Jean-Pierre Colin were all re-elected.

In addition, shareholders approved the company's rolling incentive stock option plan under which a maximum of 10 percent of the issued shares will be reserved for issuance under the plan.

The company also announced it has amended the previously announced unit offering and now plans to issue up to 41.7 million units at a price of $0.12 each, for gross proceeds of $5.0 million.

Each unit will consist of one common share and one share purchase warrant, with each warrant exercisable to purchase one additional common share for a period of three years at an exercise price of $0.17 per share.

The new funds from the offering will be used for exploration and property maintenance expenses incurred on the Cerro Las Minitas project, and the Oro gold-silver-copper project in New Mexico, USA.

The property comprises 18 concessions that total 15,125 hectares and an approximate 25 kilometre strike length. The property is located approximately 70 kilometres northeast of the city of Durango.

In 2011, Southern Silver said that 29 drill holes totaling approximately 8,030 metres were completed on the project.

At the Blind zone, drilling continues the process of delineating both the extent and internal continuity of the mineralized zone.

Assay results from hole 12CLM-030 returned a 1.1 metre interval averaging 250 grams per tonne (g/t) silver, 10.7% lead and 16.95 zinc (1,007 g/t silver equivalent) at a vertical depth of approximately 270 metres.

Hole 12CLM-034 tested the continuity of mineralization within the Blind zone and returned multiple intervals of high-grade silver-enriched polymetallic mineralization, including 1.5 metres averaging 338 g/t silver, 0.5% copper, 11.1% lead and 15.9% zinc (1096 g/t silver equivalent).

Drilling has now tested the Blind zone in excess of 600 metres strike length and greater than 300 metres depth, with the zone remaining open in all directions.

At El Sol, hole 12CLM-038, located 50 metres to the south east of hole 11CLM-027 - which itself returned 124 g/t silver, 1.9% lead and 2.1% zinc over 24.8 metres - identified 17.7 and 15 metre zones of polymetallic mineralization, which included higher-grade intervals of 0.7 metres averaging 167 g/t silver, 6.2% lead and 3.6% zinc (475 g/t silver equivalent) and 1.8 metres averaging 98 g/t silver 1.3% lead and 4.5% zinc (267 g/t silver equivalent), respectively.

Southern Silver said that two of three holes that tested the South Skarn target returned encouraging results.

Drill hole 12CLM-031 intersected oxidized skarn mineralization from 74.4 metres to 165.0 metres depth. Elevated zinc values occured through much of this drill intercept, said the company, which includes a 2.4 metre interval averaging 16 g/t silver, 0.2% copper and 9.8% zinc.

Similarly, base and precious metal enriched skarn was intersected at the contact with the central monzonite porphyry in drillhole 12CLM-040, which is located approximately 300 metres to the northwest of hole 12CLM-031.

The company said these two drill holes "continue to demonstrate the widespread distribution of polymettalic mineralization" throughout the Cerro Las Minitas project.

Additional drilling is planned to further test and delineate these new zones of mineralization.

In terms of other target areas, drilling at the La Bocona target identified polymetallic mineralization in one hole.

In the meantime, diamond drilling with two core rigs continues. One drill rig remains dedicated to the continued delineation of mineralization in the Blind and El Sol zones, while the second rig is testing specific occurrences within the area of historic mining as well as several targets derived from the recently-completed surface sampling and IP geophysical program.

In 2012, an additional 4,073 metres in seventeen drill holes have been completed so far, and two additional holes are in progress. Assays from eight drill holes are pending.

For the remainder of the year, the company has scheduled 20,000 metres of core drilling with the aim of completing an NI 43-101 compliant resource on these first set of targets by the fourth quarter.

This will be the initial milestone toward the company's goal of delineating a larger, multi-million tonne, high-grade, silver-enriched polymetallic resource on the project.

Southern Silver, a member of the Manex Resource Group, is a precious and base metal exploration company. Its current projects include the silver-lead-zinc Cerro Las Mintas project and the copper-gold-silver Minas de Ameca property, as well as the porphyry copper-molybdenum Dragoon project in Arizona and the gold-silver-copper Oro project in New Mexico.

The current drill hole follows two previous deep holes on the project by Freeport, which tested a gravel covered area of prospective stratigraphy along the main range-front fault at the base of the Dragoon Mountains.

The current hole, DS-12-03, is located approximately 175 metres to the north of hole DS-11-02 and is expected to test to depths of about 1000 metres, Southern Silver said.

Previous hole DS-11-02 intersected more than 500 metres of variably altered and mineralized  Paleozoic marbles and porphyritic Laramide intrusive.

The company said quartz veining and variable amounts of copper and molybdenum sulphides occured through much of the target interval, which averaged 0.06% copper over 527 metres in the lower part of the drill hole.

Only four previous drill holes tested the property below 600 metres, and the mineralizing system remains open below that depth.

Southern Silver said it believes that these results, together with other historical data, suggest the presence of a large, deep-seated copper porphyry system disrupted by post-mineral faulting.

The Dragoon property is a contiguous block of 12.8 square kilometres that consists of 68 unpatented mining claims and four state leases located in southeast Arizona.

The property contains areas of exposed copper-molybdenum mineralization, Laramide-age porphyry and "leached capping" in the eastern part of the property.

Southern Silver has the right to earn a 100 percent interest in the property by paying $300,000 by August 2012 and Freeport has the right to earn a 70 percent stake, by spending $3 million in exploration and development expenses by December 31, 2012.

Separately, Southern Silver also reported Thursday assay results from four core holes on its Oro copper-gold property in southwest New Mexico.

Two holes were drilled near the central, highly altered portion of the Oro property, and the third and fourth holes were drilled on the periphery of the five by 2.5 kilometre alteration zone.

Hole OR11-006 intersected 9.1 metres of 0.37% copper, within a 43 metre interval averaging 0.14% copper. A second 50 metre interval averaging 0.1% copper was intersected deeper in the hole.

Meanwhile, hole OR11-007 was drilled 520 metres northwest of OR11-006 and encountered anomalous arsenic and gold, with a high value of 0.90 grams gold per tonne over 0.8 metres.

The other two holes contained only anomalous metal values.

Southern Silver is evaluating the results and is planning an IP geophysical survey to further delineate drill targets.

Mapping and sampling outside the main altered area at Oro has identified the Stockpond disseminated gold target, which was recently staked by Southern Silver. This new shallow gold target is defined by 14 samples, all of which returned anomalous gold assays from 0.062 to 4.8 g/t gold. Eight of the 14 samples contained more than 0.4 g/t Au.

The outcrops are within an area measuring approximately 250 by 150 metres. Permitting of this target is nearly complete, the company said, with an initial phase of trenching anticipated on the project followed by drilling in 2012.

The Oro project comprises a contiguous block of Federal, State and Private land totaling 17.2 square kilometres in the historic Eureka mining district in southwest New Mexico.

Southern Silver has the right to earn a 100 percent interest in the property by paying a total of $225,000 to private vendors by December 2012.

Shares were up eight percent to $0.13 Monday morning.

The Cerro Las Minitas property comprises 18 concessions that total 15,125 hectares and an approximate 25 kilometre lineal strike length. The property is located roughly 70 kilometres northeast of the city of Durango, Mexico.

At the El Sol zone within Cerro Las Minitas, drill testing returned a 24.8 metre interval averaging 124 grams per tonne (g/t) silver, 1.9 percent lead and 2.1 percent zinc (239 g/t silver equivalent), which included a 2.8 metre interval averaging 404 g/t silver and 1.4 percent lead and 2.5 percent zinc (509 g/t silver equivalent) from drill hole CLM11-027.

The El Sol zone is an adjacent and sub-parallel mineralized structure located approximately 125 metres to the northeast of the new Blind zone discovery. A second hole, CLM11-029, also returned strongly anomalous polymetallic mineralization.

Drill hole CLM11-027 tested both the El Sol and Blind zone structures and returned a near-surface mineralized intercept from the El Sol zone and two intercepts deeper in the Blind zone.

The El Sol intercept occurs along strike from previously reported mineralization in drill holes CLM11-006 (7.8 metres of 221 g/t silver, 6.2 percent lead and 2.1 percent zinc) and CLM11-015 (1.3 metres of 165 g/t silver, 6.2 percent lead, 2.4 percent zinc).

The El Sol zone has now been tested over a 250 metre strike-length, to depths of up to 150 metres and remains open in all directions, Southern Silver said.

At the Blind Zone, drilling continues to identify multiple intervals of high-grade silver-enriched polymetallic mineralization, the company said, extending both the strike length and the depth of the presently known mineralized zone.

Highlights from drill holes which tested the Blind zone include an additional 3.5 metre interval averaging 146 g/t silver, 6.4 percent lead and 3.5 percent zinc (417 g/t silver equivalent) from deeper in hole CLM11-027; a 1.4 metre interval averaging 528 g/t silver, 10.5 percent lead and 1.3 percent zinc (847 g/t silver equivalent) from drill hole CLM11-022; and a 1.5 metre interval averaging 146 g/t silver, 4.7 percent lead and 7.8 percent zinc (490 g/t silver equivalent) from drill hole CLM11-028.

Drilling has now tested the Blind zone for over 600 metres strike-length and for over 300 metres depth, Southern Silver said, with the area remaining open in all directions.

In terms of its 2012 exploration program, Southern Silver said diamond drilling on the property with two core rigs resumed in January. One drill rig remains dedicated to the continued delineation of mineralization in the Blind and El Sol zones.

The second drill is testing specific occurrences located within the area of historic mining and several targets derived from the recently-completed surface sampling and IP geophysical program. Multiple geological and geophysical targets remain to be tested and fully delineated within this part of the property, Southern Silver added.

Twenty-nine drill holes totaling around 7,400 metres were completed on the project in 2011. An additional 2,068 metres in eight drill holes have been completed to date in 2012.

Assays from these drill holes are pending, the company said.

The company has scheduled 20,000 metres of core drilling in 2012, with the aim of completing a NI 43-101 compliant resource on these first set of targets by the fourth quarter.

This will be the initial milestone toward the company's goal of delineating a larger, multi-million tonne, high-grade, silver-enriched polymetallic resource on the project.

Southern Silver Exploration's current projects include the silver-lead-zinc Cerro Las Mintas project and the copper-gold-silver Minas de Ameca in Mexico,  as well as the porphyry copper-molybdenum Dragoon project in Arizona and the gold-silver-copper Oro project in New Mexico.

At Oro, about four core holes were drilled on the project totalling 1,697 metres. Southern said three holes tested the system to over 400 metres depth along a strike-length of 3.5 kilometres, and within a five plus square kilometre area of pervasive hydrothermal alteration. The fourth shorter hole targeted the depth projection of a surface-exposed, high-grade mineralized structure.

The Oro project is a contiguous block of Federal, State and private land that totals 17.2 square kilometres within the historic Eureka mining district of southwest New Mexico, U.S.

The company said drilling found thick intervals of pyritic and less abundant base metal sulphides in a number of holes.

Southern Silver president, Lawrence Page, said: "Geologic characteristics of the holes are strongly encouraging and continue to define a strong intrusion related hydrothermal system that is highly prospective for the discovery of gold and copper deposits."

Recent work on the project suggests a high potential to host further gold-silver enriched deposits, and also bulk tonnage gold mineralization, Southern said.

Logging and sampling of the holes continues, while assays are spending. The final targets for future exploration and drilling on the project will be developed upon receipt and compilation of the results, the company added.

Southern has the right to earn a 100 percent stake in the property if it makes payments worth $425,000 to private vendors by December 2012.

Production estimates from small mines and workings inside the Oro district between 1880 and 1961 were 2.9 million pounds of lead, 0.5 million pounds of copper, 450,000 ounces of silver and 5,000 ounces of gold mined from shallow workings, according to the New Mexico Bureau of Mines.

Separately, Southern Silver on Thursday also announced that optionee Freeport McMoran Exploration Corp. has received final drill permits for four extra holes on the Dragoon project, with a fifth hole in the application stage.

The planned holes are northeast-southwest step-outs from two prior drilled holes on the project. The company is slated to begin next phase drilling early next year.

The Dragoon property is a contiguous block of 12.8 square kilometres, consisting of 68 mining claims and four State leases situated in southeast Arizona. The property holds areas of exposed copper molybdenum mineralization.

The Blind Zone is one of several silver-enriched, high-grade polymetallic targets at Cerro Las Minitas. Positive exploration results so far have prompted the company to expand its exploration program at the project from 13,000 metres to 18,000 metres, it said.

Highlights of the latest results include an 11.5 metre interval averaging 140 grams per tonne (g/t) of silver, 0.2% copper, 4.9% lead, and 4.2% zinc, which contains a 2.9 metre interval averaging 280 g/t silver, 0.3% copper, 10.3% lead and 9.5% zinc from hole 11CLM-023.

In addition, hole 11CLM-019 returned a 1.3 metre interval averaging 126 g/t silver, 3.1% lead and 3.6% zinc.

Investors praised the results, as shares of the company jumped more than 13 percent to trade at $0.13 as of 1:56pm ET.

Both drill holes 11CLM-023 and 11CLM-019 tested the down-dip projection of the Blind Zone by 220 metres, and 160 metres, respectively, designed to delineate the full dimensions of the gravel-covered area.

The Blind Zone  is the first of several buried targets identified on the property through IP geophysics, the company said.

Southern Silver also said that holes 11CLM-018, 11CLM-022 and 11CLM-026 all showed "visually-encouraging" sulphide mineralization, further extending the northwest projection of the Blind Zone.  Assays for these holes are still pending.

The total strike length of drill-indicated sulphide mineralization in the Blind zone, including these three holes, is 475 metres, the company added.

So far at the project, 26 drill holes totalling 6,965 metres of an anticipated 18,000 metre drill program have been completed, with 14 done on the Blind target.

The Cerro Las Minitas property comprises 17 concessions which total 10,980 hectares and an around 25 kilometre lineal strike length. The property is located about 70 kilometres to the northeast of the city of Durango.

The mineralized zones at Cerro Las Minitas have been exploited to depths of 300 metres and over widths of 60 metres.

Colin has been an investment banker since 1980, and was formerly the director and head of corporate finance at Octagon Capital, from 2004 to January 2010. Prior to Octagon, he was an investment banker with Desjardins Securities, executive vice-president of Deacon Capital, and senior vice president of Richardson Greenshields of Canada.

Meanwhile, Sveinson is a professional mining engineer with more than 40 years experience in all stages of mine development at operations ranging in size from 100 to 2,000 tonnes per day in Canada, the US, South America and Africa. Most recently, from 2004 to 2010, he was president and CEO of Merit Mining Corp., a Vancouver-based company with two advanced-stage mining projects, including underground operations and a mill at Greenwood, BC.

His senior positions have included general manager of Echo Bay's Lupin and Sunnyside operations, VP of Tonto Mining and Dynatec Mining, and president and CEO of Gold City Industries.

President Lawrence Page, commented: "Jean-Pierre will assist the company in its introduction to institutional investors to raise capital for advancement of its mineral resources, specifically at Cerro las Minitas in Durango, Mexico where the company is rapidly expanding the resource of this poly-metallic deposit. Fred Sveinson will assist the company in developing the most optimum approach to exploration and development of Cerro las Minitas."

Earlier this week, the company said it bought a 5.01 hectare parcel of land at the Cerro Las Minitas property for a potential mill construction site. The property overlies portions of mineral claims currently under option to Southern Silver, where a 10,000 metre diamond drill program is underway. If results from drilling warrant ongoing exploration, the piece of land acquired is to provide a convenient site for the construction of a mill.

Southern Silver also announced Monday a non-brokered private placement financing of 8.0 million units, at a purchase price of $0.15 each, for gross proceeds of $1.2 million. Each unit will consist of one common share and one share purchase warrant.

The company said proceeds from the offering will be used to fund an expanded exploration program at Cerro Las Minitas, where Southern has so far completed around 30 percent of its 10,000 metre drill program.

Separately, the company gave an update today on its Dragoon property in southeast Arizona, which contains exposed copper-molybdenum mineralization.

The property is highlighted by “leached cap” rocks which may be of similar size and grade as the Resolution deposit located five kilometres east of Superior, Arizona.

Freeport McMoRan has the option to earn a 70 percent interest in Dragoon by spending $3 million prior to December 31, 2012. Since 2010, Freeport has conducted geophysics, soil geochemistry, and over 2,100 metres of drilling, all testing the potential for a buried porphyry copper-molybdenum system. Southern said Freeport has now advised the company that it plans to conduct additional soil gas surveys to potentially expand newly identified geochemical zones, after which it will drill a third exploration hole, expected to begin in early 2012.

The property overlies portions of mineral claims currently under option to Southern Silver, where a 10,000 metre diamond drill program is underway.

If results from drilling warrant ongoing exploration, the piece of land acquired is to provide a convenient site for the construction of a mill.

The property was acquired from a private vendor in consideration for a cash payment of US$40,000, and 50,000 common shares.

Southern Silver also announced Monday a non-brokered private placement financing of 8.0 million units, at a purchase price of $0.15 each, for gross proceeds of $1.2 million. Each unit will consist of one common share and one share purchase warrant.

Each warrant will entitle the holder to purchase one additional common share for a period of two years at an exercise price of $0.20 per share.

The company said proceeds from the offering will be used to fund an expanded exploration program at Cerro Las Minitas, where Southern has so far completed around 30 percent of its 10,000 metre drill program.

Drilling has focused on the expansion of the newly discovered Blind Zone, which is a northwest-southeast-trending silver-rich polymetallic mineralized zone located roughly 200 metres to the west of the main area on the property.

Twelve holes have tested the Blind zone to a 375 metre strike length and a 280 metre depth, with assays still pending for five holes. Highlights so far include 1.8 metres averaging 1,400 g/t silver, 19.7% lead and 14.5% zinc within a 3.3 metre interval averaging 818 g/t silver, 12.9% lead and 10.9% zinc in hole CLM-008.

The Cerro Las Minitas property comprises 17 concessions, which total 10,980 hectares and an approximate 25 kilometre lineal strike length.

Two holes were drilled as a 50-metre lateral offset to the north and south of the previously reported bonanza-grade mineralization from hole 11CLM-008, which found 3.3 metres at 8,148 grams per tonne (g/t) silver, 12.9% lead, and 10.9% zinc.

The results from these latest holes extend the strike length of the zone to over 100 metres, Southern Silver said, which remains open for up to 400 metres along strike.

Notable results include 5.0 metres grading 214 g/t silver, 0.4 g/t gold, 4.1% lead, and 5.8% zinc, including 2.8 metres of 380 g/t silver, 0.4 g/t gold, 0.1% copper, 5.8% lead, and 10.2% zinc, in hole 11CLM-011.

This hole also returned 13.6 metres at 38 g/t silver, 0.1 g/t gold, 0.1% copper, 1.6% lead, and 1.9% zinc, including 0.4 metres at 178 g/t silver, 0.1 g/t gold, 0.5% copper, 6.8% lead, and 4.8% zinc.

Meanwhile, assays from hole 11CLM-012 returned 4.4 metres of 141 g/t silver, 0.1 g/t gold, 0.5% copper, 5.0% lead, and 7.1% zinc, including 259 g/t silver, 0.1 g/t gold, 0.9% copper, 9.1% lead, and 11.8% zinc over 2.2 metres.

Southern Silver said its phase 2 drill program at the Cerro Las Minitas property is continuing. Six holes totaling 1,675 metres have been completed to date.

On the TSX-Venture Exchange, the Vancouver, B.C.-based company's stock rose 6.67% as of 2:57 pm EDT, to trade at $0.16.

The company said the drill hole results indicate a large, widespread hydrothermal system that could produce potentially significant mineralization.

Assays from the second hole, DS-11-02, found 527.4 metres grading 0.06% copper, including 353.7 metres at 0.08% copper; 85.4 metres at 0.11% copper; and 12.2 metres grading 0.25% copper.

This hole was drilled to a depth of 1,054.9 metres, at a 90-degree dip angle.

Hole DS-11-01, the first of the drill program, which is being conducted by the property's optionee, Freeport-McMoRan Exploration Corp, returned 402 metres at 0.05% copper.

The Dragoon property covers a 12.8 square kilometre area that comprises 68 patented mining claims and four State leases.

In 2009, Southern Silver signed an earn-in agreement with Freeport-McMoRan, whereby Freeport-McMoRan can earn a 70% interest in Dragoon by spending USD $3.0 million on the property by the end of 2012.

Southern Silver's stock on the TSX-Venture Exchange rose 7.14% as of 3:29 pm EDT, to trade at $0.15 per share.

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Harry: Hello, this is Harry Norman for Proactive Investors and welcome to another Proactive audio Interview. Today is the 11th August 2011 and I’m talking with Larry Page, President and Director of Southern Silver Exploration.  Listed on the TSX Venture Exchange, Metals and Mining Sector.  Stock ticker SSV, share price 17 cents Canadian, market cap 16.03 Million Dollars Canadian.  Southern Silver Exploration is also listed on the Frankfurt exchange, web address Southernsilverexploration.com.  Larry, thank you very much for joining us for this interview.

Larry: You’re very welcome Harry.

Harry: Please give investors a brief introduction to Southern Silver, the company’s business model and business development strategy.

Larry: Southern Silver Exploration Corporate is a Vancouver based company.  Which was reorganised some four, five, six years ago to see if it could follow in the success of Western Silver which is another company that I was involved with and which developed a large silver and gold prospect in Zacatecas in Mexico.  Which is now in production by Gold Corp.  The western shareholders had a great payday, 1.2 billion dollars.  

We hope to emulate that success with Southern Silver.  That’s why we developed a business model of finding properties in which we could obtain 100% interest in areas of North America that are amenable to mining and contain large deposits.  It’s taken us four to five years to put together four great projects and we’re exploring all of them at the present time.

Harry: Since acquiring the Cerro Las Minitas Silver Lead Zinc Project in Durango State of Mexico last September, Southern Silver has published seven releases about exploration and exploration results from this project.  Please talk us through this acquisition and tell us what you have found so far at Cerro Las Minitas?

Larry: This property was well known for a large period of time but it was never consolidated.  By that I mean there are two small mines that have been there and worked since colonial times.  Cerro Las Minitas means, “A hill of several mines.”  We were fortunate to negotiate and conclude an Option Agreement to acquire a large block of ground, 11,000 hectares which contains the outcrops and the areas where the mines are.  We attacked it in a way that we expect to be able to ascertain the amount of resource there.  Hopefully what the next round of drilling, we’re in the process of doing 10,000 metres of drilling at the present time, some 40 holes.  

They follow air born magnetics and an IT survey and they were very, very optimistic that we will be able to develop a significant resource there that can become a mine.

Harry: What are your thoughts about and plans for Southern Silver’s San Luis Vein System on the Minas de Ameca Copper Gold Project in Jalisco State, Mexico, Larry?

Larry: We will be going into another phase, a drill programme in September there.  This is an interesting prospect and it’s a good idea to look at why we get into this type of an area.  It’s an expanding area in Jalisco where they are developing silver, copper and gold properties.  We’ve got about 1.3 million dollars in the ground.  We have developed a small Mexican mine in the words of our Mexican geologist.  We hope to increase the resource there so that, that vein system will be of some interest to a major company that wants to develop into a mine.

Harry: Southern Silver has a joint venture with Freeport-McMoRan for a new copper, molybdenum porphyry discovery at Dragoon in Arizona.  Please bring us up to speed with the Dragoon project.

Larry: We sold this property under auction from an American based geologist who always had a view that at depth there was a large porphyry copper system.  The property has been explored in a shallow way to be an open pit with no commercial results.  Freeport approached us and asked if they could spend three million dollars on the property, turned a 70% interest.  We were delighted; they are the largest copper miner in the world.  They now have two holes completed down to depths of some 1,100 metres.  Their analogue is to see if they can develop a mine such as the being developed the resolution deposit in Arizona where they are mining at one mile depth by block caving.  

We have just received the assays from the second hole.  We will release them shortly; they’re very, very encouraging.  We believe that Freeport is on the margins of a large system and importantly they have applied for permits to drill four more holes.  Each hole keeping mine costs around $500,000.  We expect that by the time they complete those four holes we’ll have a very good idea whether they have encountered a significant copper mine.  If so our 30% interest will accrue well to the benefit of our shareholders.

Harry: When we last spoke Southern Silver was planning to build up the size of the silver, gold, volume metallic Oro Project in Mew Mexico.  How have your plans worked out for building up the Oro Project and what are your plans for Oro?

Larry: They worked out considerably better than anticipated.  Although, the length of time was longer than we’d anticipated.  This is an amalgam of federal land, state land and private land that’s taken us some four years to put together.  We’ve done all of the science, we’ve drilled some holes and we now have a permit to drill the next round of drilling which will start in September.  We’ve added a good deal of ground to the property on what we conceive to be a new gold target.  We’ll be looking to see if we can expand the near surface polymetallic, silver, lead, and zinc resource that we now have.  Importantly to see whether there exists a depth and when I say depth somewhere below 1,000 feet for copper porphyry prospect.  

So, by the end of the year we’ll have a much better idea of the significance and value of this property but it’s one of our stars and we are very, very happy that we are now going forward to drill it.

Harry: On July 21st Southern Silver closed the first tranche of a private placement for gross proceeds of 2.4 million dollars US.  Where does this leave the company’s financial situation going forward?

Larry: By the end of August I believe we will have completed the announced four million dollar financing.  I suggest that a significant bet after we close the first tranche, [Leiberfund 0:06:42] of New York announced that they had subscribed for two million dollars worth of equity in our company.  They were an insider, they owned 10%.  I believe that that is a significant message to the market that major investors are taking our company seriously.  Added to the balance of the financing and a number of warrants that are outstanding, the company is adequately funded to undertake all of its land exploration.  

I should say that we’ve never had difficulty in raising exploration money for this company or other companies in our group, andwe expect to be able to continue to finance all of the exploration as we go forward.

Harry: What can investors expect from Southern Silver over the next 12 to 18 months?

Larry: Investors can expect firstly news flow.  We have the drills turning on all the projects.  Hopefully the news flow will be significant.  We’ll be talking about significant resources that can become mines.  So, for in that period of time I think the complexion and structure of our company will remarkably change that we won’t be a junior explorationsist.  We will be developing resources that will draw the significant of attention of miners.

Harry: Remember Proactive Investors is not an investment advice service.  Make sure you register as proactiveinvestors.com or proactiveinvestors.de for our weekly newsletter which will keep you informed about our articles, interviews and events.  Thank you for listening. 

END AUDIO

The offering consisted of 14.1 million units for 17 cents per unit. Each unit consists of one common share and one warrant, exercisable to purchase one additional share for a period of two years for 22 cents per share.

The new funds will be used for exploration and property maintenance expenses incurred on the Cerro Las Minitas and Minas de Ameca projects in Mexico, as well as the Oro project in the United States.

The company has already started a second phase drilling campaign, consisting of 25 to 30 diamond drill holes, totalling 10,000 metres, which crews have now mobilized, at its Cerro Las Minitas project.

Southern Silver intends to expand its current exploration program on its Cerro Las Minitas project in Mexico after initial results reported high-grade silver and polymetallic mineralization from four of ten core holes, completed as part of its phase one operations.

The Cerro Las Minitas property comprises 17 concessions, which cover an area of 10,980 hectares and about 25 kilometre lineal strike length. The property is located 70 kilometres to the northeast of the city of Durango, Mexico, and is accessed easily by road.

Southern Silver and its subsidiaries are engaged in the acquisition and exploration of mineral properties in North America.

The company’s current projects include the silver-lead- zinc Cerro Las Mintas project and the copper-gold-silver Minas de Ameca in Mexico, as well as the porphyry copper-molybdenum Dragoon project in Arizona and the gold-silver Oro project in New Mexico.

The results hail from the newly discovered poly-metallic structure identified under gravel cover of the previously known ore bodies at the property.

Drill hole 11CLM-008 returned a 1.8 metre interval averaging a whopping 1,400 grams per tonne (g/t) of silver, 19.7% lead, and 14.5% zinc, within a broader 3.3 metre interval of 818 g/t silver, 12.9% lead and 10.9% zinc, which forms part of a 10.9 metre intercept averaging 268 g/t silver, 4.5% lead and 3.8% zinc.

The hole represents the first test of the new find, which is within a geophysical target approximately 250 metres to the west of the contact with the central intrusive body.

The geophysical structure is open for up to 400 metres of strike, the Vancouver-based company said. A second, deeper geophysical anomaly has also been identified to the west of the current hole, a future target for upcoming drilling, Southern Silver said.

To date, the Canadian precious metals explorer has now completed ten holes in phase one at the project, for a total of 2,900 metres of drilling. Assays are still pending from portions of the above hole, and two other drill holes.

The results so far have prompted Southern Silver to expand the project into a second phase program, which will consist of between 25 to 30 diamond drill holes, totaling 10,000 metres - expected to begin in early July.

The new phase will be financed by a private placment announced earlier this week, and will target areas located within previously mined zones, as well as several additional areas identified from the recent surface geophysical program, including possible extensions to the new high grade discovery.

The Cerro Las Minitas property comprises 17 concessions, which total 10,980 hectares and an approximate 25 kilometre lineal strike length. The mineralized zones at the project have been exploited to depths of 300 metres and over widths of 60 metres.

The company's shares jumped more than 6% on Thursday, to trade at $0.17 as of 1:35pm EDT.

The Vancouver-based silver explorer intends to issue up to 17.65 million units at a price of $0.17 per unit.

Each unit will consist of one common share and one half share purchase warrant, with whole warrant exercisable to purchase one additional common share for a period of two years, at a price of $0.22 each for the first year, and $0.27 for the remaining year.

The company said that proceeds from the private placement, which is subject to regulatory approvals, will be used for exploration and property maintenance expenses incurred on the Cerro Las Minitas and Minas de Ameca projects in Mexico, as well as the Oro project in the US.

Specifically, the company plans to expand its current exploration program on its Cerro Las Minitas project in Mexico to develop mineralization identified though geophysical surveys and diamond drilling.

The proposed expanded campaign is to consist of up to 10,000 metres of diamond drilling in up to 30 drill holes, designed to test high-grade targets in a +40 metre thick skarn horizon. Additional drill holes will test for high-grade silver veins, under gravel cover, the company said.

The 10,980 hectare Cerro Las Minitas project is comprised of 425 hectare area that has previously been mined on small-scale, and a much larger unexplored gravel-covered area.

Highlights from the drilling include 6.8 metres averaging 153 g/t silver, 1.47% lead, and 1.01% zinc, within a broader 14.7 metre interval averaging 40 g/t silver, 1.02% lead and 1.01% zinc, in drill hole 11CLM-002.

In addition, the Vancouver-based company drilled 0.4 metres averaging 382 g/t silver, 6.25% lead, and 1.62% zinc in hole 11CLM-003; and hit a strongly-enriched 2.1 metre copper interval, averaging 100 g/t silver, 0.17% lead, 3.08% zinc and 1.37% copper from the same hole.

"We are extremely encouraged with these initial assays which validate, in part, the results of historic drilling and small-scale mining on the project and allow us to continue the systematic exploration of the many targets defined," said president Lawrence Page.

The results reported today were from widely spaced holes, designed to provide initial tests of several different target types, the company said.

To date, Southern has now completed five core holes, totaling approximately 1500 metres of a planned 3000 metre phase one drill program. Assays are still pending from two drill holes.

Aside from Cerro Las Minitas, Southern also has other mineral projects in Arizona and New Mexico.

The Vancouver-based junior explorer has already completed a 1,100 line kilometre airborne magnetic survey on the property, identifying a number of targets that will be tested during the drill program.

The initial 3,000 metres will focus on four main target areas, and will look for both high-grade, silver-rich polymetallic and copper-gold skarn mineralization.

The 10,980 hectare Cerro project includes a 425 hectare area that has been the subject of previous small-scale mining by Noranda, and a larger unexplored gravel-covered area.

"Only a small portion of the property is exposed and the recent airborne and on-going surface geophysics have identified potentially significant unexplored gravel covered targets along some of the 25 kilometre strike-length," said president Lawrence Page.

Highlights of some Noranda drill results include an 11.45 metre interval grading 123g/t silver, 1.55% lead and 7.79% zinc from drill hole NGV-00-02; and a 1.41 metre interval grading 529g/t silver, 6.99% lead and 1.27% zinc from drill hole NGV-00-06.

The Cerro Las Minitas property, which totals 10,980 hectares with a strike length of 25 km, lies within the Faja de Plata (Belt of Silver) of north-central Mexico. Past production and current resources from this region are in excess of three billion ounces of silver.

The exploration program, which consists of airborne and ground induced polarization surveys as well as a minimum of 3,000 metres of diamond drilling, will focus on finding additional targets and extending known mineralization.

The airborne survey, which covered the entire property, has already been completed on schedule, and results are still being analyzed.

Southern Silver said the ground IP survey, which is to assist in defining the extent of the wide skarn zone, is expected to complete by the end of March. According to the company, the skarn zone contains high grade silver, lead, and zinc deposits, which were the focus of previous mining in the area.

The initial 3,000 metre drill program, which will be split into two phases, will begin next week, as the company has already received the environmental permit from the Mexican government approving the campaign. The second phase of the program will be dedicated to testing the anomalies identified in the airborne and ground surveys, Southern Silver said.

Eleven of 86 initial grab and chip samples from Cerro returned values in exccess of 100 g/t silver, including 464 g/t silver and 15.7% lead, as well as 1.16% zinc. The company also said that additional samples assayed significant gold and copper mineralization.

Separately, Southern Silver also reported today that the second drill hole on its Dragoon copper porphyry project in Arizona intersected a thick interval of veined and mineralized intrusive, which, said the company, suggests the potential for a copper-enriched mineralized system in the area.

Aside from Dragoon and Cerro Las Minitas projects, Southern Silver also owns the Oro gold-silver property in New Mexico, for which it has initiated the permitting process to drill up to 15 additional holes at the site.

The drilling will consist of two phases, the first of which is due to begin once the company receives environmental permits.

Eleven of 86 initial grab and chip samples on the property returned values in excess of 100g/t silver, including 464g/t silver and 15.7% lead and 1.16% zinc from a hand-cobbled sample from the Santa Nino chimney.

Southern Silver said that it also plans on conducting a geophysical program on the site, which will include an airborne magnetic survey covering the entire 10,980 hectare property - due to begin in late February.

In addition, a ground I.P. survey will also be completed to help define the extent of the wide skarn zone that contains high-grade silver, lead and zinc-rich deposits, which were the focus of previous mining in the area.

The geophysical program will cover both known areas of mineralization, and newly identified unexplored regions. The second phase of the 3,000 metre drilling program will focus on testing the anomalies found through the magnetic and I.P. surveys.

The Cerro Las Minitas property comprises 17 concessions and lies within the Faja de Plata, which is one of the largest silver producing regions in the world.

Aside from Cerro Las Minitas, Southern Silver also holds the copper-gold-silver Minas de Ameca property, the porphyry copper-molybdenum project Dragoon in Arizona and the gold-silver project Oro in New Mexico.

The Dragoon property is a contiguous block of 12.8 sq. km that comprises 68 unpatented mining claims and four State leases. It contains areas of exposed Copper-Molybdenum mineralization, Laramide-age porphyry and "leached capping" in the eastern part of the property, and a larger down-dropped block of porphyry related rocks in the gravel-covered western portion of the property. The presence of the "leached cap" rocks is significant, as they may overlie supergene-enriched copper mineralization at depth.

The company said that a single RC/core drill hole to a depth of 1065 metres was completed, which tested a gravel-covered down-thrown fault block of prospective Paleozoic stratigraphy, adjacent to an exposed Laramide-age porphyry system in the eastern part of the property.

Extensive oxidation of the primary sulphide minerals was noted beneath the gravel cover, from 380 metres to a depth of 820 metres where the hole then intersected, across a faulted contact, a sulphide-bearing footwall schist.

Anomalous copper mineralization, up to 497ppm over 402 metres, which includes several 3 to 6 metre intervals averaging from 0.1 to 0.5% copper, was intersected in the drill hole.

Southern Silver signed an option agreement with Freeport-McMoRan Exploration Corporation (FMEC), which gives FMEC the right to earn a 70% interest in the property by spending $3 million in exploration and development costs on the property by December 31, 2012.

FMEC has advised that permitting for a second hole on the project is in progress, and that it plans to drill the hole later in 2010.

Separately, Southern Silver also announced that compilation and surface exploration has started on the Cerro Las Minitas project, which the company recently optioned. Under the terms of the agreement, Southern can acquire a 100% interest in the project by making scheduled payments to a total of US$4 million over a three year period.

Southern Silver's current interests include the silver-lead-zinc Cerro Las Minitas project, the copper-gold-silver Minas de Ameca project and the silver-zinc-lead Pinabete project in Mexico, as well as the porphyry copper-molybdenum Dragoon project in Arizona and the gold-silver Oro project in New Mexico.

Southern Silver ceased exploration activities on the property after completing its five-hole, 1645-metre diamond drill program earlier this year, and delayed the release of drill results pending the outcome of the New Mexico land auction, which had been postponed by the State several times.

The newly acquired leases will allow testing of several targets that historically has been hampered by fragmented land holdings in the District, the company said.

In 2006, the company began a program of land consolidation with an option to purchase BLM claims and a contract to purchase patented claims upon which historic mines have been worked to the water table.

With the acquisition of these two state leases, Southern Silver has essentially consolidated the land package over the historic district to allow for a full geological evaluation of the area.

The company's previous work, which included geological mapping, surface sampling and the drilling program, identified three types of potential deposits at Oro: bulk-tonnage, intrusion-related gold mineralization; deeply buried copper porphyry; and polymetallic replacement/skarn deposits.

Two of the holes tested to date are particularly encouraging because they intersected thick intervals of anomalous metals associated with silicified and pyritized hornfels, skarn, and intrusions.

Hole OR10-001 tested an area close to an exposed intrusion, which is believed to be genetically related to mineralization, and it intersected strong skarn and hornfels alteration with anomalous Zn, Pb, Ag, and Cu near the top of the hole and a thick zone of anomalous Cu deeper.

Hole OR10-002 intersected strongly silicified limestone and altered dikes that contain several intervals of anomalous gold, including 5.2m of 1.15g/t Au and 0.38% Zn. Arsenic, a pathfinder element, is also strongly anomalous in this hole.

The company plans to conduct geophysical surveys upon the mobilization of the contractors, as well as follow-up with diamond drilling after new sites have been chosen and permitted. This program is expected to be completed by late Winter of 2011.

The lease acquisitions increases the Oro project area to 1,127 hectares.

Manex applies stringent selection criteria to the projects of the eight companies under its umbrella.  The projects must be in demonstrated mineral rich areas in politically stable countries, close to excellent infrastructure and have the potential to become world-class.  Ideally they should also be 100%-owned (or at least majority-owned) and have the potential to be district in scale.

Southern Silver's Minas de Ameca project certainly fits the bill.  It is a large copper/gold/silver project in Jalisco state some 80km south-west of Guadalajara City, and runs along strike along the prolific Sierra Madre mineral belt which hosts most of the precious mineralisation in Mexico.  From 2005-2007 Southern Silver accumulated a number of claims, consolidating a 337 square kilometre land package in the district; the opportunity to acquire such sought-after ground came thanks to Western Silver's reputation and Southern Silver's associations and contacts.  It has since relinquished some of the claims in order to focus on the 131 square kilometre San Luis claim, where copper/gold/silver mineralisation is hosted in quartz-hematite vein systems.

To date 4832 metres have been drilled in 20 core holes testing to depths of 400 metres and a 10 line-km gradient IP geophysical survey has been completed. Results have indicated strongly mineralised intervals with grades in excess of 1g/t gold and 1% copper ranging from 1 to 10+ metres thick.  Highlights have included 3.5m averaging 5.07g/t gold, 49.8g/t silver and 4.32% copper and 6.85m of 2.03g/t gold, 14.35g/t silver and 0.84% copper. A 1500 metre 10-hole drill programme is now underway to test on-strike and down-dip extensions of the previously reported higher grade drill intercepts. 

Earlier this year Southern Silver also acquired the San Juan Project in Sinaloa.  The 18.5 square kilometre project lies on the Sierra Madre Mineral Belt some 3.5km from paved highway, 80km from the nearest city and 30km from US Gold's Magistral Project. It was previously mined by local small scale miners and latterly had been optioned to US Gold who had drilled 27 holes.  Results published by US Gold in September 2008, including a 3 metre near-surface interval of 27.3g/t gold, and a 27 metre interval at 3.9g/t gold, suggest high grades.  Although Southern Silver believes that the previous data are relevant and reliable the next step will be to verify the estimates; mapping and preliminary drill targeting are underway to prepare for drilling later in the year.

Southern Silver's US projects are located in the same mineralisation as San Luis and San Juan, both less than 150km north of the Mexican border.

The Oro project in New Mexico is a 11.5 square kilometre gold, silver, copper, lead and zinc project in the historic Eureka Mining District which is part of a belt of major, precious-metal-rich skarn and Carbonate Replacement Deposits (CRDs) that extend south into Mexico. Historic production from the district between 1880 and 1961 totalled 2.9M lbs of lead, 1.7M lbs of zinc, 0.5M lbs of copper, 0.45M ounces of silver, and 5,000 ounces of gold in of oxide ore.  Mining has taken place at Oro sporadically from 1877 to the 1960s but with little modern exploration.

Nonetheless surface samples at Oro by Southern Silver had revealed high grades (up to 23.8g/t of gold) and there are known to be geological similarities between Oro and the CRD camps at Santa Eulalia, Mexico (which produced 50M tons of 15%Pb+Zn, 310g/t Ag) and Bisbee, Arizona (7800 Mlbs Cu, 2.8 Mozs Au, 102 Mozs Ag, 324 Mlbs Zn) in Arizona.  So last year Southern Silver embarked on five-hole, 1645 metre drilling program to test the targets.  A report issued in April 2010 detailed the findings from the company’s exploration program to date. It concluded that there is good exploration potential for three types of deposit on the property (bulk-tonnage, intrusion-related gold mineralization, copper porphyry potential at depth and blind polymetallic replacement/skarn deposits), and it recommended further exploration.  Southern Silver is now seeking a JV partner to help fund Phase 2 which will comprise geophysics and a minimum of 6 further core holes.

The company has already been successful in attracting a partner to its Dragoon laramide porphyry copper/molybdenum property in Arizona some 100 kilometres southwest of Tucson.  In September 2009 it signed a farm-in agreement with Freeport McMoRan Exploration Corporation whereby FMEC could acquire up to 70% ownership of the 12.8 square kilometre property by spending $3-million on the property before December 2012. It is expected that FMEC will begin drilling the first 900 metre hole on, or soon after, May 17th.  Freeport McMoRan is the world’s largest publicly traded copper company, so the JV seems a good endorsement of the quality of the property. 

Future Plans

Southern Silver's plans for the remainder of 2010 are to continue to drill San Luis at Minas de Ameca with a view to defining a resource there, to drill 1200 metres at San Juan to verify US Gold's findings, to find a JV partner in New Mexico to assist in funding the next round of exploration and to monitor Freeport's exploration program at Dragoon.  Another acquisition may also be on the cards.  For the moment the company holds C$750,000 in cash and has outstanding warrants which may increase the balance. The program for 2010 is anticipated to cost Southern Silver $350,000.  The long term exit strategy is to advance the projects to the point where they are attractive for sale to a mid-tier or major developer.

Analysis

For the moment Southern Silver remains a classic early exploration company with no defined resources. As such any investment must be highly speculative, but Southern Silver, through its people, its project selection criteria and its relationship with the Manex Resource Group has sought to improve the odds on success.

Firstly it has focussed on historic mining areas where there has been little modern exploration.  Mexico has a 500 year mining history and a great wealth of minerals; its silver belt has been the most prolific in the world with a cumulative production of over 10 billion ounces.  However the combined effect of its restrictive nationalistic policies from the mid-1960s to 1992 (when they were thoroughly overhauled to permit foreign ownership) and low commodity prices through the nineties and early noughties has meant that there has been little application of modern exploration techniques until recently. 

Secondly Southern Silver has picked projects in countries which are politically stable and with favourable mining climates.  Both Mexico and the US benefit from stable, transparent mining codes, a skilled labour force, a ready availability of equipment and strong mining traditions.

Thirdly the Manex Resource Group provides a number of central legal, administrative, investor relations and technical services to all its companies including Southern Silver.  This reduces the overhead and regulatory burden on each of its companies enabling Management to spend more money and time on exploration and to maximise dollars in the ground.  The Group has also been very successful in assisting in raising funds; to date it has raised $250M for its companies since its formation in 1997.  Several of the Group companies, including Southern Silver are also listed on the Frankfurt Stock Exchange which has attracted an influx of German capital.  As Liana Shahinian, Director of Investor Relations, and fluent German-speaker said, "it is best to take the company to Germany, rather than expect German investors to come to us".  Group companies also benefit from good contacts and networks enabling them to hear early on about interesting opportunities.

Finally Southern Silver has attracted good people.  Adrian Robles Salazar, the geologist who discovered Peňasquito works full-time for Southern.  The company's President, Lawrence Page, has been involved with the discovery and development of half a dozen mines including David Bell, Peňasquito and Calpine/Eskay Creek. The former regional manager for exploration for Teck Corporation’s Mexican subsidiary, Roger Scammell, has recently been appointed as Senior Geological Advisor.  Collectively the directors, through their connection with Manex have a track record of successfully raising money and of using this to find projects and turn them into saleable assets. 

Western Silver was a particularly conspicuous success, eventually realising C$1.2bn for its shareholders.

For the moment Southern Silver has a market cap of just C$4.5M. Can Southern Silver, with a similar mix to Western Silver of people and projects, follow in its footsteps?