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San Luis Project
Two Mineralized Systems DiscoveredThe San Luis property is an emerging mineralized district in central Peru. To date, two separate systems Have been discovered: the Ayelén high-grade gold/silver vein system and the BP Zone, a potential silver/base-metal porphyry deposit. The property encompasses over 25,000 hectares of mineral concessions with good road access to nearby population centers. Elevations range from 3,800 meters to 4,700 meters. The Ayelén System - Five Kilometers of Identified VeinsHigh-grade gold and silver veins are hosted within Tertiary-age volcanic rocks of the Calipuy Formation. Six separate veins were originally identified on surface and a seventh that does not outcrop was discovered by drilling. Ongoing prospecting has identified additional outcropping veins Mineralization within the veins is characteristic of classic quartz-adularia, low-sulfidation epithermal systems. Vein textures, such as well-developed banding and brecciation, indicate that repeated episodes of gold and silver deposition have occurred. Epithermal vein systems typically form multiple ore deposits spaced along the veins. Bonanza-grade mineralization was originally identified in trenches along the length of the Ayelén and the adjacent Inés veins. A 25,000 meter drill campaign during late 2006 and 2007 confirmed mineralization in the subsurface and defined the deposit. Underground Exploration Program Being PermittedSilver Standard, as joint venture operator, is applying for permits for an underground exploration program of the Ayelén Vein. This underground work will determine the continuity of precious metal mineralization and form the basis of an updated resource and a feasibility study. Exploring for Other High-Grade StructuresExploration continues on other known quartz veins in the vicinity of Ayelén to identify additional high-grade structures. This work consists of prospecting, geological mapping and geophysical studies, to be followed by drilling. Recent field work has identified several other vein structures on the 25,000-hectare property. These will be systematically sampled and, if warranted, drilled in the coming field campaign. Early Feasibility Study PlannedSilver Standard has announced that a feasibility study for the development of Ayelén is expected to begin in early 2008. Preliminary metallurgical test work using conventional hydrometallurgical processing has yielded recoveries of 90% for gold and 80% for silver. Additional studies are underway to optimize recovery rates. The BP Zone – A Potential Porphyry SystemThe BP Zone lies approximately six kilometers southeast of Ayelén. It is contained within the joint-venture property and represents a separate area of porphyry-style mineralization distinct from the Ayelén area of epithermal-vein mineralization. The BP Zone was originally recognized through alteration mapping and stream sediment geochemistry. A follow-up program identified large areas where surface grab samples yielded significant base-metals (up to 2.2% copper and 11% zinc) together with precious-metals anomalies. The program was followed by a detailed geophysical study that yielded numerous other anomalies. The area is characterized by one or more mineralized hydrothermal breccias with identified outcrop dimensions of approximately 250 by 450 meters. The breccias contain pervasively altered fragments of volcanic rock with a sulfide-bearing matrix. The rock-chip sampling determined areas of distinct, yet overlapping, copper, zinc and lead mineralization. Anomalous silver and gold was also found. Drilling Encounters Porphyry-Style MineralizationAt the end of the 2007 drill program, four diamond drill holes tested a number of geophysical anomalies that are coincident with the BP Zone. Noteworthy results include:
Aggressive BP Zone Drill Program in 2008Extensive rock alteration and the hydrothermal breccias, as found both at surface and in the drill holes in the BP Zone, are indicative of a porphyry-style environment and potential associated mineralization. Silver Standard is planning an aggressive drill campaign on completion of permitting. The Qualified Person (QP), as defined by NI 43-101, for the San Luis project, is Kenneth C McNaughton, M.A.Sc., P.Eng., vice president, exploration, Silver Standard Resources Inc. The San Luis CommunitiesThere are two indigenous communities encompassing the project’s exploration licenses in the San Luis region. They own the surface rights through formal land title, while the federal government holds the mineral rights. An effective working partnership has been developed between the joint venture and the various parties – both Esperanza and Silver Standard have plenty of experience managing such relationships elsewhere in Peru and South America. The communities largely depend on subsistence farming and grazing. They are isolated and very few government services are provided. As a result, there is inadequate access and little infrastructure in the area. Poor schooling has led to a low 30% literacy rate. The joint-venture partners are committed to working with the communities to improve infrastructure, education and health services, as well as the local economy. The principal consideration is to work as a partner (not benefactor) to define both the ways and means of achieving community goals. |