Geology
Overview
Mineralization
Silver mineralization on the Nieves property is classified as low-sulphidation epidermal and is the primary target.
Epidermal silver veins are dominant in the Altiplano Region of Mexico and include world-class examples such as Pachuca, Zacatecas, Fresnillo, and Guanajuato.
The closest example is the Fresnillo deposit, the source of the largest producing silver mine in the world, located 90 km to the south of the Nieves property. The Fresnillo deposit includes mantos, chimneys, stockworks, disseminated mineralization, and veins that show vertical mineralogical zonation.
Three major east-northeast striking silver and gold braided vein systems known as the California, Concordia-San Gregorio-Dolores (sometimes referred to herein as the “Concordia” or “CSD Vein System”), and Santa Rita are the known principal silver and gold mineralization structures located on the Property.
The California Vein System is marked by a shaft and a series of cuts over a distance of 300 m. The California Vein System shows a large 150-600 meter wide alteration zone extending about 2.7 km along the strike. The California Vein was intercepted in Kennecott hole NV08 in two intervals at depths of 108m and 116m that returned assays of 367 g/t over 2m and 795 g/t over 2 m respectively.
The Concordia-San Gregorio-Dolores Vein System has a known strike length of nearly 1.8 km in two vein sub-systems, the San Gregorio and Dolores. The CDS Systems are composed of carbonate to quartz-sulphide veins. The Concordia Vein can be traced in shaft and mine workings for approximately 600 m to the southwest of the San Gregorio. The San Gregorio Vein can be traced in some small open cuts for 500 m. Surface samples from 10 cm-40 cm wide calcite to quartz veinlets returned silver assays of 945 g/t.
The Delores Vein interpreted to be a splay of the Concordia vein is traceable for nearly 500 m on the surface by numerous small cuts and at least 5 shafts. A stockwork zone of thin calcite to quartz and oxide veinlets extends on the surface for 250 m. Samples of the veinlets from this zone returned silver assays of up to 553 g/t.
The Santa Rita Vein System, located on the southern portion of the Property, can be recognized in shafts and short drifts over 500 m. The last production during 1970-1985 came from lower levels of the mine. The Santa Rita was deepened over the decades to nine levels (282 m) and yielded bonanza grades, up to 4,000 g/t silver.
In the Santa Rita and Concordia-San Gregorio-Delores Veins, the silver mineralization is hosted in two- to ten-meter thick shear zones. Cabonate-quartz-sulfide veins contain the best grades of silver, gold, lead, and zinc and constitute the majority of past production.
2015-2016 airborne and ground-based geophysical surveys of the Property indicate that each of the three major braided vein systems extends for at least 10 kilometers east to west, much further to the west (>8 km) than was known and mined previously.
The mineralization contained in the three major vein systems is open at depth and laterally. Expansion of the mineralization in all three systems is likely. Multiple veins within the three known systems, three veins identified by IP south of the Santa Rita Vein System, and two currently identified vein systems 10 km west of the Concordia Vein System remain unexplored.
Mineral Resource Statement
Mineral resources for Nieves were classified by Mr. Jason Baker, P.Eng, an appropriate independent qualified person. Classification was done in accordance with the CIM Standard Definition for Mineral Resources and Mineral Reserves (December 2005) guidelines. The mineral resources for the Nieves Project are reported at a cut-off grade of 15 g/t Ag. The Mineral Resource Statement for the Nieves Project is summarized in Table B4.
Mineral Resource Statement (Caracle Creek, June 22, 2012)
| Vein | Area | Category | Quantity (tonnes) *2 | Grade *3 Ag g/t | Grade *4 Au g/t | Ounces *5 Ag | Ounces *6 Au |
|---|---|---|---|---|---|---|---|
|
Concordia |
La Quinta |
Indicated |
33,040,000 |
50.1 |
0.04 |
53,220,000 |
42,500 |
|
Concordia |
La Quinta |
Inferred |
39,260,000 |
32.0 |
0.02 |
40,390,000 |
25,200 |
|
San Gregorio |
North |
Inferred |
18,770,000 |
27.0 |
0.08 |
16,293,900 |
48,300 |
*1 reported at a cut-off grade of 15g/t Ag. Mineral resources are not mineral reserves and do not have demonstrated economic viability.
*2 Tonnes have been rounded to the nearest 10,000.
*3 Ag grade has been rounded to one (1) significant digits.
*4 Au grade has been rounded to two (2) significant digits.
*5 Ounces have been rounded to the nearest 100. One (1) troy ounce = 31,103 grams.
Table B4
Mineral Resource Statement
In May, 2010, G&T Metallurgical Services Ltd. completed a metallurgical assessment on behalf of Quaterra and Blackberry. The tests were performed on a composite sample consisting of approximately 100 kg of crushed material. The main objectives of the tests were to determine the chemical and mineral content of the composite, assess the ore hardness, and develop an outline of a treatment process to recover silver using conventional mineral processing techniques.
The sample contained 79 g/t silver with minor amounts of copper (0.08%), lead (0.14%) and zinc (0.1%). The minerals included quartz, micas, feldspar, pyrite, goethite, sphalerite, galena, silver sulfides (0.07%), and chalcopyrite, in decreasing order of abundance. The silver minerals were polybasite, freibergite and stromeyerite. The ore hardness was determined to be 10.8 kWh/tonne (moderately soft) using a Bond ball mill work index test procedure.
Open circuit flotation testing indicated that about 86% of the silver can be recovered into a final concentrate containing 2.3 kg/tonne of silver. It was recommended that future test work should investigate coarser primary grind sizes. The test also suggested that regrinding the rougher concentrate to a nominal 20 μm K80 had no significant benefit on concentrate grade or silver recovery. Increasing the pH level of the cleaner circuit to 10 significantly improved the grade of silver in the final concentrate.
Gravity concentration and cyanidation were ruled out as potential processing methods for the PEA due to the low silver recovery. The results of the open circuit kinetic rougher and batch cleaner tests were performed on ore with a silver grade of 79 grams per tonne and indicated that a silver recovery of 86% was achievable.
Silver Resource Finding Metrics — Historical
Nieves has been known throughout history as a silver property. Since 2003 Blackberry Ventures and its former partner Quaterra Resources has spent approximately $21,000,000 fully burdened to:
Acquire the Nieves Mineral Concessions
Maintain the concessions
Support the Mexican subsidiary
Support the parent LLC
Execute eleven carefully planned drilling campaigns totaling 62,500 meters, 172 core holes
Conduct 2003 Geophysical Survey consisting of 10 lines (6.6 km in length) of CSAMT
Conduct 2010 Geophysical Survey
Conduct 2015-2016 comprehensive airborne VTEMplus and companion IP ground geophysical survey of the eastern half of the Nieves Silver Property.
Acquire 100% working interest in the Nieves Silver Property
Quaterra/Blackberry dilled extensively 2.7km along 2 of the 7 three known veins within one of three known vein systems, each system approximately 10 km in length; discovered and assessed a reported 109,899,808 oz. silver and 116,007 oz. gold — 119,760,403 ounces of silver equivalent — with an average silver ore grade of 40.1 g/t using a 15 g/t silver ore grade cutoff.
Nieves has been known throughout history as a silver property. Since 2003 Blackberry Ventures and its former partner Quaterra Resources has spent approximately $21,000,000 fully burdened to:
Extended each of the three known major vein systems up to 8 km to the west (approximately 10km laterally east to west)
Found three additional mineralized veins south of the southernmost known vein in the Santa Rita Vein System
Found two additional vein systems 10km west of the central Concordia Vein System
Found the possible source or sources of the extensive mineralization encountered and exploited throughout the last five centuries in the Nieves Silver Property.
Stats:
181
drill holes
< $0.10
Finding costs of < $0.10/ounce silver
662,983
ounces of 40.1 g/t silver equivalent per hole drilled
181
drill holes
< $0.10
Finding costs of < $0.10/ounce silver
662,983
ounces of 40.1 g/t silver equivalent per hole drilled
Geophysics
Mineral Resource Statement
In November and December 2003, Quaterra and Blackberry completed a geophysical survey consisting of 10 lines (6.6 km in length) of CSAMT and Controlled Source Induced Polarization (CSIP) for a total of 66 line-km. In addition, a Ground Magnetometer survey was completed consisting of 12 lines including the 10 lines surveyed with CSAMT for a total of 76 line-km of magnetic surveying. The work was performed by Zonge Engineering and Research Organization of Tucson, Arizona (Job No. 0319). The CSAMT survey greatly extended coverage of the survey completed in 1995 and 1996 by Zonge Engineering on behalf of Kennecott. The survey identified several prospective anomalies, several which correspond to areas of known mineralization, but extend far beyond the limits of previous drilling (Quaterra News Release February 3, 2004).
The CSAMT survey identified six conductive features, three of which correspond to the areas of known mineralization along the Santa Rita, San Gregorio, and Majada veins. The rest were previously unknown. These conductive zones coincide with some of the IP anomalies. The anomalies are interpreted to represent mineralization, have a southwest-northeast trend extending for distances up to 3.5 km, and spaced at intervals of approximately 1000 m from north to south across the Nieves property.
The survey also identified a large undrilled IP anomaly west of San Gregorio and several smaller untested anomalies in the adjacent areas.
The results of the survey indicate the Concordia and San Gregorio are two separate veins and not fault offsets of the same vein, and identified strong anomalies along strike to the east and west of both veins that have not been drilled. The San Gregorio vein appears to be the eastern extension of the Orion vein, which is generally unexplored and under-explored for a distance of over 2500 meters.
The survey also identified a large undrilled IP anomaly west of San Gregorio and several smaller untested anomalies in the adjacent areas.
The results of the survey east of the historic mine at Santa Rita vein indicate a zone of anomalies extending eastward a distance of 1000 m. The results from the two lines surveyed at the El Rosario mercury occurrence identified narrow zones of weak IP anomalies.
The survey also identified a large undrilled IP anomaly west of San Gregorio and several smaller untested anomalies in the adjacent areas.
Mineral Resource Statement
The results and conclusions from processing and modeling VTWMplus and IP data:
In February 2015 Geotech completed an airborne VTEMplus survey of the entire Nieves Silver Property consisting of a total of 1146 line-km at a 200-meter spacing between lines. The survey collected magnetic field and time domain electromagnetic field (TEM) data for processing and modeling.
The most notable feature to emerge from the survey was a large, ovoid magnetic low anomaly with dimensions of 1,900 meters by 1,000 meters, which is located at the western end of the central vein system (the Concordia-Gregorio) which includes the “drill indicated” Ag (silver) within the Concordia vein. This magnetic low lies midway between the Orion-Gregorio vein, where drill hole QTA 190 intercepted bonanza grade silver (54.5oz/ton), and the Santa Rita vein system to the south, where gold has been mined from gold-silver veins as recently as 1980, which is thought to be the center and source of the extensive mineralization previously encountered on the property. The most likely cause of the magnetic low anomaly is an intrusive rock, breccia or hydrothermal alteration, or combination thereof.
Two zones of increased (higher) magnetite located north and south of the low may be hornfels or magnetite-bearing skarns peripheral to the intrusion or breccia which need to be tested for gold.
Ground confirmation of the discovery using airborne geophysics of Nieves western vein system located 10 kilometers to the west of the three known major eastern vein systems.
San Gregorio Legacy Shaft
A magnetic field low within a mining district is often of interest, but unless there is a sulfide system closely associated with the low it remains little more than a curiosity until it is drilled or surveyed. The best geophysical indicator of a hidden metallic sulfide zone is a properly configured inverse polarization (IP) survey. The IP method is very sensitive and very accurate. This method has evolved to the point that geophysicists no longer talk in terms of “anomalous IP zones”, but rather in terms of sulfide zones.
These are the same vein and identified strong anomalies along strike to the east and west of both veins that have not been drilled. The San Gregorio vein appears to be the eastern extension of the Orion vein, which is generally unexplored and under-explored for a distance of over 2500 meters.
Three 8,000 ft. northwest-southeast lines of induced polarization were subsequently run over the magnetic low anomaly depicting a strong chargeability anomaly coincident with the massive observed magnetic low anomaly beginning at depth on all three lines. This means the anomaly is caused by the presence of sulfide minerals, which could be entirely pyrite or more likely a combination of pyrite and other sulfide-carrying values in gold and silver. It is probable that the mineralization in the known vein systems, including the 110 million ounce silver resource found in the Concordia Vein System, is peripheral leakage from a concealed mineralized system at depth recognizable only by coincident magnetic low and IP high anomalies.
The 2015-2016 Geophysical Survey found:
The three known major braided vein systems, the California, Concordia, and Santa Rita extend 8km west, 10km east to west.
There are 3 untested veins located south and southeast of the vein swarm known as the Santa Rita; and two interesting magnetic lows near the west edge of the survey, located 9-10km west of the Central Vein System at Nieves, the Concordia. There is limited past exploration in this area.
Though the source of the magnetic features is unknown, it was considered important enough to stake an additional claim of 1873.4 hectares (4,460 acres) to protect the property for future exploration work. These anomalies will be tested to determine if the magnetic lows contain sulfides and silver mineralization – more importantly if they identify the intrusive source of Nieves silver resource.
Deposition Model
Mineral Resource Statement
The Company’s geophysicist, Joseph Inman developed the surveys for the model using a a grid of geophysics lines oriented perpendicular to the three known vein systems with a maximum spacing between lines of 400 meters employing CSAMT (controlled source audio magnetotellurics), and Induced Polarization (IP). A 3D deposition model consistent with similar deposits found within the Faja de Plata at Fresnillio and Real de Angeles emerged from the CSAMT and IP data. The resulting deposition model is consistent with the geophysics interpretation as well as the drill results.
The model consists of a large hydrothermal system ‘driven’ by a deep magma. Ore deposition often occurs several times as the magma hydrothermal system pluses upward. At some elevation within the system, the hydrostatic pressure confining the system is exceeded and ore-bearing fluids ‘boil’ and cool as mixing with meteoric water takes place. The zone is typically 200 to 500 meters below the ground surface at the time the system is active and the zone of boiling ore-bearing fluids, ‘the kettle’ has a depth on the order of 500 meters. While the ‘kettle’ likely extends under the entire Nieves Silver District, ore fluids and subsequent deposition of bonanza grade silver ore is concentrated in close proximity to “deep tapping” structural zones that acted as pathways or conduits for the ore bearing fluids migrating from below the kettle and from the kettle toward the surface.
Interpretation of the geophysical data in conjunction with the drill results further documents this mode of deposition and mineralization model. Conduction as defined by the 3D inversion of CSAMT data are coincident with the intense zones of alteration (quartz- pyrite veinlets) and silver vein mineralization found in Nieves holes QTA-30,-31,-29,-16,- 26….
The shape, size, and high conductivity zones (low resistivity) zones associated with each of the major vein systems are consistent with a kettle deposition model of boiling fluids creating sub-vertical zones of intensely altered rock within the structural conduits. The mineralization intercepts and increased intensity of alteration below an elevation below 1600km sea level and 350km ground level in QTA-30 and the bottom of holes QTA -19 and 29 indicate the upper levels of the kettle were intercepted by these holes.
In addition to the high potential for deep thick zones of high-grade silver mineralization within the ‘kettle itself’ as indicated by the large 1,900m x 1,000m ovoid magnetic low found on the western end of the Concordia Vein System and north of the Santa Vein System, drill results indicate the presence and potential for 3 types of associated mineralization immediately above the ‘kettle’ lid: narrow high-grade veins (Concordia); wider ‘vein swarms’ containing bonanza grade (Delores, Santa Rita, and California) and manto type mineralization (Cerro Gregorio Hill).
The Nieves project is a low sulfidation epithermal silver deposit hosted in three east-northeast trending, steeply south-dipping vein systems with alteration and mineralization bearing strong similarities to the Fresnillo silver deposit. The most economically significant mineralization occurs in anastomosing carbonate-quartz-sulfide veins that have been defined over a total strike length of 3.8 kilometers by 54,814 meters of drilling in 187 holes. The system develops to a maximum true width of in excess of 200 meters and has a proven down dip extent of approximately 525 meters.
The carbonate-quartz-sulfide veins contain the best grades of silver, gold, lead, and zinc. This vein type consists of calcite that is partially to totally replaced by grey to white, chalcedonic, fine-grained quartz veins and veinlets. Individual veins vary in size from a few centimeters in width to a few up to 1.5 m wide with up to 50% sulfide minerals. Sulfides include pyrite, stibnite, sphalerite, galena, chalcopyrite, and the silver sulphosalts: proustite, pyrargyrite, jamesonite, and scarce tetrahedrite. The central and most important of the three vein systems is the Concordia-San Gregorio-Dolores system which includes both the La Quinta and Gregorio North zones. Mineralization along the Concordia-San Gregorio-Dolores vein has a known total strike length of 1,300 meters and a true width of up to 100 meters. The mineralized zone in the Gregorio North area is approximately 1,200 meters long and up to 200 meters wide. The La Quinta and Gregorio North zones are the subject of the resource estimate in this report. Only the La Quinta zone has a designed open pit for the economic assessment.
The attitude and size of the mineralized zones along the Santa Rita zone to the south and the California vein system to the north are not well understood at this stage of exploration. Drilling along the Santa Rita system suggests that the mineralized zone is at least 750 meters long and may be up to 340 meters wide. The mineralized zone along the California vein system is at least 550 meters long and may be up to 130 meters wide.
Recent drilling has expanded the size of mineralized zones along all vein systems and additional drilling may significantly enhance the resources and economics of the project. Many of the vein systems are open along strike and all remain open to depth. Because some zones may be terminated along strike by late vertical fault structures such as the one that offsets the Concordia from the San Gregorio vein systems, the discovery of strike extensions to the Nieves vein systems will only require continued drilling guided by the promising results of surface geophysical surveys.
In addition to the high potential for deep thick zones of high-grade silver mineralization within the ‘kettle itself’ as indicated by the large 1,900m x 1,000m ovoid magnetic low found on the western end of the Concordia Vein System and north of the Santa Vein System, drill results indicate the presence and potential for 3 types of associated mineralization immediately above the ‘kettle’ lid: narrow high-grade veins (Concordia); wider ‘vein swarms’ containing bonanza grade (Delores, Santa Rita, and California) and manto type mineralization (Cerro Gregorio Hill).
Nieves 2005 Silver Deposit Deposition Model
The Company’s geophysicist, Joseph Inman developed the surveys for the model using a grid of geophysics lines oriented perpendicular to the three known vein systems with a maximum spacing between lines of 400 meters employing CSAMT (controlled source audio magnetotellurics), and Induced Polarization (IP).
A 3D deposition model consistent with similar deposits found within the Faja de Plata at Fresnillio and Real de Angeles, emerged from the CSAMT and IP data. The resulting deposition model is consistent with the geophysics interpretation as well as the drill results. The model consists of a large hydrothermal system ‘driven’ by a deep magma. Ore deposition often occurs several times as the magma hydrothermal system pluses upward. At some elevation within the system, the hydrostatic pressure confining the system is exceeded and ore-bearing fluids ‘boil’ and cool as mixing with meteoric water takes place. The zone is typically 200 to 500 meters below the ground surface at the time the system is active and the zone of boiling ore-bearing fluids, ‘the kettle’ has a depth on the order of 500 meters. While the ‘kettle’ likely extends under the entire Nieves Silver District, ore fluids and subsequent deposition of bonanza grade silver ore is concentrated in close proximity to “deep tapping” structural zones that acted as pathways or conduits for the ore bearing fluids migrating from below the kettle and from the kettle toward the surface.
Interpretation of the geophysical data in conjunction with the drill results further documents this mode of deposition and mineralization model. Conduction as defined by the 3D inversion of CSAMT data are coincident with the intense zones of alteration (quartz-pyrite veinlets) and silver vein mineralization found in Nieves holes QTA-30,-31,-29,-16,-26…. The shape, size, and high conductivity zones (low resistivity) zones associated with each of the major vein systems are consistent with a kettle deposition model of boiling fluids creating sub-vertical zones of intensely altered rock within the structural conduits. The mineralization intercepts and increased intensity of alteration below an elevation below 1600km sea level and 350km ground level in QTA-30 and the bottom of holes QTA -19 and 29 indicate the upper levels of the kettle were intercepted by these holes.
In addition to the high potential for deep thick zones of high-grade silver mineralization within the ‘kettle itself’ as indicated by the large 1,900m x 1,000m ovoid magnetic low found on the western end of the Concordia Vein System and north of the Santa Vein System, drill results indicate the presence and potential for 3 types of associated mineralization immediately above the ‘kettle’ lid: narrow high-grade veins (Concordia); wider ‘vein swarms’ containing bonanza grade (Delores, Santa Rita, and California) and manto type mineralization (Cerro Gregorio Hill).
Nieves 2005 Silver Deposit Deposition Model
The Company’s geophysicist, Joseph Inman developed the surveys for the model using a grid of geophysics lines oriented perpendicular to the three known vein systems with a maximum spacing between lines of 400 meters employing CSAMT (controlled source audio magnetotellurics), and Induced Polarization (IP). A 3D deposition model consistent with similar deposits found within the Faja de Plata at Fresnillio and Real de Angeles, emerged from the CSAMT and IP data. The resulting deposition model is consistent with the geophysics interpretation as well as the drill results.
The model consists of a large hydrothermal system ‘driven’ by a deep magma. Ore deposition often occurs several times as the magma hydrothermal system pluses upward. At some elevation within the system, the hydrostatic pressure confining the system is exceeded and ore-bearing fluids ‘boil’ and cool as mixing with meteoric water takes place. The zone is typically 200 to 500 meters below the ground surface at the time the system is active and the zone of boiling ore-bearing fluids, ‘the kettle’ has a depth on the order of 500 meters. While the ‘kettle’ likely extends under the entire Nieves Silver District, ore fluids and subsequent deposition of bonanza grade silver ore is concentrated in close proximity to “deep tapping” structural zones that acted as pathways or conduits for the ore bearing fluids migrating from below the kettle and from the kettle toward the surface.
Epithermal High Grade Silver Veins
Within the Altiplano Region of Mexico, epithermal silver veins are the dominant deposit type with world-class examples such as Pachuca, Zacatecas, Fresnillo, and Guanajuato. The closest of these world-class deposits/examples is Fresnillo, the world’s number one silver producer, located 90 km south of Nieves. The geology of Fresnillo has been well studied (see Image B) and appears to be very similar to the geology and geophysical modeling observed at Nieves. In the Fresnillo District, epithermal fluids ascended along steeply dipping extensional fault structures generally orientated east-west. On the Nieves property, there are several north-northwest trending mapped faults as well as a vein system orientation east to west, very similar to mineralized veins and structures found at Fresnillo.
Nieves Property — 2012 Map
- 55 Square miles
- Shows eastern 2 km of the three known major braided vein systems
The Property
Fundamentals
NIEVES is located in the Famed Mexican Silver Belt — the Faja de Plata. The Faja de Plata is the most prolific silver province in the world. Since its discovery in the 16th century, more than 10 billion ounces of silver and 70 million ounces of gold have been produced.
Property Valuation
For all property types, asset value is a joint product of any potentially extractable mineral resources located under the earth’s surface and any invested capital that is used to extract this mineral resource. In order to perform a fundamental valuation of a mining company the amount of mineral reserves must be estimated.
History
The history of the area is rich. The first discovery in the area covered by the Nieves Property was the Santa Rita Vein in 1560 by Spanish explorers (Turner, 1999; Cavey, 1999).