Commonwealth Silver and Gold Mining Inc. Wednesday announced the results of a maiden National Instrument 43-101 (NI 43-101) mineral resource estimate from its flagship Commonwealth silver and gold Project in Arizona, historically the second-largest primary source of silver in that state.
The Toronto-headquartered company, which has plans to go public shortly, said the Commonwealth Project contains indicated mineral resources of 24.75 million ounces of silver and 290,000 ounces gold, or 39.8 million silver equivalent ounces (17.6 million tonnes at 43.8 grams per tonne (g/t) silver and 0.51 g/t gold). Additional inferred mineral resources at Commonwealth stand at 1.25 million ounces silver and 11,000 ounces gold, or 1.8 million silver equivalent ounces (1.1 million tonnes at 35.7 g/t silver and 0.31 g/t gold).
Silver equivalent ounces were calculated using a ratio of 52:1, while the mineral resource estimate assumed gold and silver prices of US$1,350 and US$26.00 per ounce, respectively.
The mineral resource estimate was completed by SRK Consulting. The initial mineral resource estimate is based on a 3D geologic model, constructed using assay data from 17,700 meters of drilling in 172 drill holes and 2,998 meters of channel sampling in 209 channel sample lines.
In a statement, Commonwealth's president and CEO, Michael Farrant, said: "We are extremely pleased to have accomplished this significant milestone. We initially set out to confirm an historic mineral resource estimate calculated by Behre Dolbear Group Inc. in 1996. SRK's current estimate has certainly exceeded our initial expectations and confirms our confidence in the Commonwealth Project.
"As we plan to go public, this NI 43-101 compliant mineral resource estimate will serve to establish a minimum valuation for the Company."
Farrant continued to say that the Company's next exploration efforts will focus on growing the mineral resource estimate, and on its Blue Jeep and San Ignacio targets, located nearby the Commonwealth Project.
"As a Company, we have continued to deliver against our originally stated plans and I am very pleased with the work that continues to be performed by our team in Arizona," he concluded.
Farrant has 15 years experience in the gold mining indutry, including president and CEO of Mexican gold producer Sierra Minerals Inc., which became Goldgroup Mining Inc. (TSE:GGA) following a merger he completed last year with privately held Goldgroup Resources Inc. He also spent three years as VP, Treasurer and Operations Controller at Kinross Gold (TSE:K)(NYSE:KGC) and six years as Corporate Controller with Barrick Gold (TSE:ABX)(NYSE:ABX).
Within the last four years, Farrant has completed two business combinations: combining Sierra Minerals with Goldgroup in April 2010, and the merger of Aurogin Resources with Morgain Minerals to form Castle Gold which was subsequently purchased by Argonaut Gold (CVE:AR) in 2009.
Located in the historic Pearce mining district, the Commonwealth Project is situated in Cochise County, approximately 120 kilometres southeast of Tucson.
The past-producing Commonwealth Mine was the second largest historic primary silver producer in the state, with recorded production of approximately 12 million ounces of silver along with 138,000 ounces of gold from 1895 to 1942 after its discovery in 1895. In the mid 1990’s, Harvest Gold, a private US corporation, and Atlas Precious Metals advanced the project to pre-feasibility, completing a technical report containing an historic mineral resource estimate, economic analysis and pit design.
Work reached the pre-feasibility study level in 1996, before being halted due to low gold and silver prices. No work was done on the project from 1997 to 2011, when Commonwealth Silver optioned the property and resumed exploration.
The project was extensively explored and drilled by a number of companies from the 1970’s into the mid-1990’s who were seeking lower grade mineral resources amenable to open pit mining and heap leach extraction.
The mineral deposits at the property are typical silver dominant, low sulfidation epithermal veins and stockworks. The two most important veins are the Main Vein and the North Vein.
Between these two veins lies a wedge of volcanic rocks, with well-developed quartz stockwork veining which is mineralized with silver and gold. The vein system has been mapped over 1 kilometre of strike length and continues to the east under alluvial cover.
Drilling has tested at least 800 meters of this strike length to a maximum depth of just over 200 meters.
“There is significant potential to find extensions to the known vein system both east, west and down dip,” Commonwealth Silver said.
Commonwealth Silver currently has a 98% interest in eight patented mining claims hosting the current mineral resource estimate and 100% of the mineral rights on ten adjoining unpatented mining claims. These claims are subject to a 2% net smelter return royalty, up to half of which can be bought back for a total of $2 million. While 88% of the patented claims are leased with an option to purchase, the Company successfully bought 10% of the deposit outright for US$152,000 from underlying property owners.
The Company's other properties in the region are the Blue Jeep, San Ignacio and Six Mile Hill properties, all within close proximity to the Commonwealth Project.
The Blue Jeep property is located approximately 2 miles east of the Commonwealth Mine and consists of ten contiguous mining claims known as Blue Jeep 1 through 9 and the Brindle Steer. San Ignacio is located approximately 1 mile east of Commonwealth and consists of eighteen mining claims, while Six Mile Hill is located around 1 mile west of the Commonwealth Mine and consists of six mining claims.
From 1983 to 1985, the properties were explored by Santa Fe Mining, which completed exploration work including soil and geophysical surveys and various drill programs. Limited drilling was performed on the Six Mile Hill property while more extensive exploration was completed on the Blue Jeep and San Ignacio properties.
The privately-held mineral exploration and development company expects to go public by way of an IPO by the end of 201. However, with approximately $2.5 million in the treasury, the Company can afford to wait for opportune market conditions if needed, it said.