Aftermath Silver Ltd (CVE:AAG) (OTCQB:AAGFF) has reported results from its ongoing drill core sampling program at its Challacollo silver-gold project in northern Chile, which show the potential to develop a second, lower-grade mining project at the site.
In late 2020, the firm posted a new resource estimate for the asset, showing 6.6 million tonnes of indicated material (both open pit and underground) for 35.1 million ounces of silver at 165 grams per tonne (g/t) and 58,000 ounces of gold at 0.27 g/t. Inferred showed 11.1 million ounces of silver at 124 g/t and 15,000 ounces of gold at 0.17 g/t.
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"The 2020 Mineral Resource estimate incorporated sub-parallel veins into the Challacollo estimate for the first time," Aftermath highlighted in today's statement.
"Importantly approximately 84% of the Indicated and Inferred Mineral Resources are now constrained by an optimised open pit shell. This allows the company the opportunity to investigate lower grade material and second order high grade veins within that pit shell."
CEO Ralph Rushton added: "The opportunity to potentially develop a parallel lower grade heap leach project from the breccia mineralisation is an important increment to the project, this material would otherwise be mined as waste in an open pit."
Sampling assays reported included, in one hole, 264 g/t silver and 1.06 g/t gold in an interval of 5.80m starting from 109.30m depth in a vein structure and 96 g/t silver and 0.19 g/t gold in a 2m intercept from 5.10m depth in breccia.
Rushton added that the "potential to develop the second order higher grade veins will be investigated with the infill component of the drill programs that will be announced shortly".
Core sampling is currently suspended in accordance with COVID-19 restrictions in Chile, but will resume as soon as its permissible and safe to do so, said the company.
Aftermath is optioning the project from Mandalay Resources and said it had exercised its option to split the fourth and final payment for Challacollo into two payments.
The first of these payments - for C$3 million - will be paid 50% cash and 50% shares. Thus, 2.055 million shares were issued to Mandalay on May 5, 2021 and the TSX Venture Exchange required this payment to be characterized as "shares for debt".
By opting to issue shares for a portion of this payment, Aftermath said it will be able to direct an additional C$1,5 million towards its exploration programs in 2021.
The company now has around C$12.5 million in its treasury, and is well-funded to advance its 2021 exploration and development programs, it said.
The final payment of C$3 million to earn 100% of the Challacollo is now due on April 30, 2022, before which Aftermath may again elect to pay this 50% in cash and 50% in shares.
The company also has an option to acquire a 100% interest in the Berenguela silver-copper project in Peru via a binding agreement with SSR Mining, and it owns 80% of the Cachinal silver-gold project in Chile, with an option to acquire the remaining 20%, also from SSR Mining.
Contact the author at giles@proactiveinvestors.com