Silver Spruce

Exploring High-Grade Silver in the Sierra Madre Gold-Silver Belt

This Silver Spruce Resources profile is part of a paid investor education campaign.*

Overview

Silver Spruce Resources (TSXV:SSE) is a Canadian junior exploration company exploring and developing the Pino de Plata silverbase metalgold and Cocula gold projects in Mexico and the Melchett Lake project in Canada. The Pino de Plata property lies in the prolific Sierra Madre gold-silver belt and is 15 kilometers southwest of Coeur Mining’s (NYSE:CDE) Palmarejo mine, which produced 7.5 million ounces of silver and 122,722 ounces of gold in 2018. Additionally, the property is surrounded by land owned by Coeur.

The property hosts three types of mineralization, all of which are similar to the mineralization found at producing mines in the Sierra Madre. From these three types of mineralization, Silver Spruce has identified four targets that are highly-prospective for silver: Terrero, Santa Elena-Gossan, Theodora and Sierpe.

At the 20,000-square-meter Terrero target, Silver Spruce sampled outcrop that assayed grades between 31.25 g/t silver to 557 g/t silver. The company has also recovered two 40-kilogram samples from the Santa Elena-Gossan target that graded 0.21 g/t gold, 270 g/t silver, 840 ppm copper, 0.7 percent lead and 2.5 percent zinc. Additionally, Silver Spruce recovered values of up to 553 g/t silver at its Theodora target, while a grab sample recovered at the Sierpe target assayed 268 g/t silver, five percent lead and seven percent zinc.

Silver Spruce is preparing to complete its first drill program on the property. The company has completed its fieldwork exploration which included a detailed geological mapping and sampling across the property as well as an IP-resistivity survey over Santa Elena-Gossan. The field program expanded areas of mineralization to 50 hectares and added new vein targets at the La Perla, Santa Clara and El Muro vein systems. A total of eight targets were identified for drill testing.

Silver Spruce has expanded its property portfolio to include another gold asset in Mexico and a precious and base metals asset in Canada. The Cocula gold project is located in Mexico in an active mining region with several projects nearby including Endeavour Silver’s (TSX:EDR) Terronera project and Agnico Eagle’s (TSX:AEM) El Barqueno project. Recent work at the Cocula project has confirmed that high-grade gold mineralization is present on the property.

As for the Melchett Lake project, it is an advanced-stage precious and base metals project in the Thunder Bay mining district in northern Ontario, Canada. Base metal mineralization has been found at the property in localized lenses of zinc and lead with variable grades of copper, silver and lead. Grades of up to 26.1 g/t gold, 560 g/t silver and 19.1 percent zinc have been recovered.

Silver Spruce’s management team has experience in exploration, prospect development, corporate finance and public company management. Additionally, management and insiders are significantly invested in the company, notably holding 29 percent of shares.

Silver Spruce’s Company Highlights

  • Operates in the prolific Sierra Madre gold-silver belt.
  • Fifteen kilometers southwest of Coeur’s Palmarejo mine.
  • Property surrounded by Coeur-controlled land.
  • The property hosts three types of mineralization found at large silver mines in the Sierra Madre.
  • Four highly-prospective silver targets: Terrero, Santa Elena-Gossan and the Sierpe and Theodora veins.
  • Maiden drill program to commence in the near term.
  • Recently acquired the Cocula and Melchett Lake projects.
  • Cocula is located in an active mining region with several projects nearby including Endeavour Silver’s Terronera project and Agnico Eagle’s El Barqueno project.
  • A drill permit has been obtained to test mineralization at Cocula.
  • Melchett Lake is an advanced-stage precious and base metals project in the Thunder Bay mining district in northern Ontario, Canada.
  • Management and insiders notably hold 29 percent of shares.

Pino de Plata Property

The 397-hectare Pino de Plata property contains four exploration concessions with road access in the southwestern portion of Chihuahua State, Mexico. The property lies on the western side of the Sierra Madre gold-silver belt and is 5.5 kilometers south of Chinipas de Almada. The property is also 15 kilometers southwest of Coeur’s Palmarejo mine, which produced 7.2 million ounces of silver and 121,569 ounces of gold in 2017. Additionally, the property is surrounded by land owned by Coeur.

silver spruce pino de plata

Historical exploration

Since the 1600s, small-scale artisanal mining has occurred sporadically in nine areas on the property. Both Consejo de Recursos Minerales and Arcelia Gold conducted exploration on the property in 1985 and 2013 respectively. These exploration efforts focused on the existing workings, producing historical resource estimates in the process. In the past 30 years, the previous operator developed a surface mine and directly shipped high-grade ore to third-party mills and smelters.

Coeur acquired a large land package from Paramount Gold and Silver, including concessions surrounding Pino de Plata and have conducted exploration programs near the property and remain significant landholders in the area. In December 2014, Coeur acquired Paramount Gold for $146 million to gain control of the San Miguel property, which neighbors Coeur’s Palmarejo project.

Exploration

In May 2015, Silver Spruce completed preliminary exploratory work on the property to complete a maiden NI 43-101 technical report. The program included mapping and sampling of mineralized outcrops and historic workings, such as Santa Elena, Santa Clara, La Perla, Sierpe I, Theodora, Terrero and Agua Hedionda II.

Silver Spruce found high grade silver outcropping on the property and delineated four target areas: Terrero epithermal target, Santa Elena-Gossan replacement target and the Sierpe and Theodora vein targets. Highlights from the exploration program include surface values over 500 g/t silver.

silver spruce target areas

Each target area has a different form of mineralization. The 20,000-square-meter Terrero target features epithermal mineralization and requires limited additional mapping and sampling before drilling. Surface samples taken from the target include values between 31.25 g/t silver to 557 g/t silver.

The Santa Elena-Gossan target features relatively shallow carbonate replacement mineralization for silver, lead, zinc and copper deposits. The target covers approximately 20 hectares, with values of up to 200 g/t silver found on surface. Two 40-kilogram samples were recovered from stockpiles and returned grades averaging 0.21 g/t gold, 270 g/t silver, 840 ppm copper, 0.7 percent lead and 2.5 percent zinc.

Meanwhile, the Sierpe and Theodora veins are open along strike and contain mineable widths. Silver Spruce has identified favorable alteration and a newly exposed silver mineralization to the west. Surface samples recovered from the Theodora target returned up to 553 g/t silver and anomalous values of gold, lead, zinc and copper. A grab sample recovered at Sierpe graded 268 g/t silver, five percent lead and seven percent zinc.

silver spruce map

Moving forward

Silver Spruce has completed its field program which included a detailed geological and structural mapping of the property, rock and soil sampling and an IP-resistivity survey over Santa Elena-Gossan. To date, the company has received results back from the El Terrero and Gossan areas. Highlights from the sampling program include 1,130 g/t silver and 37,200 ppm lead at the El Terrero target and 255 g/t silver at the Gossan target.

Silver Spruce was also able to expand areas of mineralization to 50 hectares and added new vein targets at the La Perla, Santa Clara and El Muro vein systems. A total of eight targets were identified for drill testing. The company’s maiden drill program is expected to commence in the near term.

Cocula Gold Project

Silver Spruce has acquired the 233.5-hectare Cocula gold project in Jalisco state, Mexico. Cocula is an advanced-stage gold project that hosts part of a regional structural trend that is prospective for gold, silver and base metals. The property is located in an active mining region with several projects nearby including Endeavour Silver’s Terronera project and Agnico Eagle’s El Barqueno project.

Historical Exploration

Cocula is considered to be an epithermal deposit with veins and breccia zones that form mineralized shoots within the intrusive host rocks. The project was previously explored by Timmins Gold, now Alio Gold Inc. (TSX:ALO).

Channel sampling by Timmins at the Cocula breccia returned 136 meters grading 2.39 g/t gold. 19 g/t silver, 1.07 percent lead and 0.12 percent zinc. Timmins also reported high grades of up to 25 g/t gold in some samples.

In 2008, Timmins drilled 1,974 meters and confirmed the continuity of Cocula breccia extended for a strike length of 800 meters. The breccia remains open in all directions. Highlights from the drill program include 7.5 meters grading 5.8 g/t gold, 10.5 meters grading 1.76 g/t gold, 13.5 meters grading 1.37 g/t gold, and 37.5 meters grading 1.2 g/t gold, 13 g/t silver and 1.34 percent lead.

silver spruce cocula map

Preliminary Metallurgy 

Timmins’ preliminary metallurgical work reports good gold recoveries including:

  • Bottle rolls, -10 mesh, core: gold recoveries of 50 percent to 80 percent and silver variable mostly over 70 percent.
  • Bottle rolls, -10 mesh, trench samples: gold recoveries around 68 percent, silver about 45 percent.
  • Columns, up to 3/8-inch, trench samples: gold recoveries of 70 percent and silver 35 percent over 31 days.

Ongoing Exploration 

Since acquiring the property, Silver Spruce has confirmed the high-grade gold mineralization that Timmins identified in its 2008 drill program exists on the property. As part of the company’s due diligence on the property, Silver Spruce also collected rock chip samples. Nine out of the 26 samples returned gold assays of 0.88 g/t gold and up to 12.55 g/t gold, confirming the presence of widespread gold mineralization at the surface.

The results of the due diligence program were included in a NI 43-101 technical report, which was released in September 2019. The technical results were followed up by a drill permit for the Cocula project. The company can drill 47 holes on the property to test the 750-meter strike length of the known mineralized area.

Melchett Lake VMS Project

Silver Spruce has signed a binding LOI to acquire a 100 percent interest in the 1,820-hectare Melchett Lake zinc-gold-silver VMS property, an advanced-stage precious and base metals project in the Thunder Bay mining district in northern Ontario, Canada. The property is located within an active exploration and mining region north of Geraldton.

The area is home to Copper Lake Resources’ (TSXV:CPL) Marshall Lake VMS project, Premier Gold Mine’s (TSX:PG) Hardrock-Greenstone gold mine and the past-producing Anaconda-Dofasco iron mine. The project resides along one of the access routes proposed north of Nakina to the Ring of Fire nickel-copper-platinum group elements-chromium exploration projects.

The Melchett Lake belt contains several occurrences of polymetallic zinc-lead-copper-silver-gold VMS-style mineralization that is similar to ore deposits found at Mattabi, Winston Lake, Geco and Uchi Lake. Base metal mineralization has been found at the property in localized lenses of zinc and lead with variable grades of copper, silver and lead. Grades of up to 26.1 g/t gold, 560 g/t silver and 19.1 percent zinc have been recovered.

Silver Spruce’s Management Team

Dr. Brian Penney, Ph.D., DIC, P.Eng. — Chairman, Director and Audit Committee Chairman

Dr. Brian Penney has extensive experience in guiding early-stage companies, both as CEO and Chairman. Recent positions include founding CEO of TARA, a Halifax-based Telecoms R&D firm, Chairman and CEO of Abrideanin Halifax; Chairman of Intertainment Media Inc, a TSXV public company in Toronto; CEO and Chairman of e-djuster Inc. in Ottawa. He has been a board member for several academic-industry and government boards as well including the Communications Research Centre and CANARIE.

Earlier in his career, Dr. Penney held various research and academic positions in physics and computing science, working as a software engineer, system architect and development manager at Bell Northern Research and other companies in the telecommunications industry. He holds a Ph.D. in high energy nuclear physics from Imperial College of Science & Technology at the University of London and is a professional engineer.

Karl Boltz — President, CEO and Director

Karl Boltz is a natural resources consultant with over 15 years working with public and private companies in Mexico. He is an expert in project acquisition, funding, market development and project management. He is the co-founding President, CEO and Director of EXMIN Resources Inc. (now Sierra Metals). Boltz is also fluent in Spanish.

Kevin O’Connor — Director

Kevin O’Connor is a corporate attorney based in Chicago, Illinois. Currently, he is the General Counsel of Asia Pacific for Navstar Inc. He’s experienced in M&A, joint ventures and divestitures. He is also fluent in Mandarin Chinese.

Greg Davison, M.Sc., P.Geo. — Director

Mr. Davison is a professional consulting exploration geologist, project manager and ore mineralogist with forty-two years of practical exploration, commercial laboratory and project management experience from diverse geological settings in more than forty countries. Mr. Davison has epithermal Au-Ag-Pb-Zn-Ba, skarn, VMS, porphyry and gemstone expertise among others from exploration targeting and remote field operations through ore mineralogy and process development.

Greg graduated with an MSc in Geological Sciences from Brock University and an Honours BSc in Geology from Dalhousie University, and is a professional geologist (P.Geo.) licensed with the Engineers & Geoscientists of British Columbia (EGBC).

Gordon Barnhill — CFO, VP of Corporate Affairs and Director

Gordon Barnhill joined Silver Spruce in 2003, leaving his position as President of a management consultancy focusing on capital research, business evaluations, deal structuring and investment strategy. Prior to his role as a consultant, he worked for Canada’s largest banking institution for 25 years and ended this portion of his career in the position of senior commercial lending officer.

Art Brown — Director

Art Brown has over 30 years of business experience. He has served as on the board of directors for eight companies in total, ranging from technology to mineral exploration and oil and gas. He is currently President of Alba Minerals, a TSXV-listed precious metals exploration company.

Craig Gibson, Ph.D., CPG — Consulting Exploration Project Manager

Craig Gibson received his Ph.D. (1992), and M.S. (1987) in Economic Geology and Geochemistry from the Mackay School of Mines, University of Nevada, Reno and B.S. (1984) in Earth Sciences from the University of Arizona. He has been active in the exploration industry in Mexico since 1993, and founded Prospeccion y Desarrollo Minero del Norte, S.A. de C.V. (ProDeMin) based in Chihuahua, Mexico, in 2009, a consulting firm providing a broad spectrum of exploration related services to the mining industry, including regional and local geology, drilling supervision, project management and oversight, as well as land and legal studies and Mexico accounting. Dr. Gibson is also a Director of Garibaldi Resources Corp., a Vancouver based junior exploration company, and a Qualified Person for work performed on properties in Mexico, and previously co-founded and was Vice President of Exploration for EXMIN Resources Inc., a public company on the Vancouver Stock Exchange and later acquired by Dia Bras Exploration (now Sierra Metals). Dr. Gibson has a proven track record in exploration of ore deposits in Mexico where he has been involved in several major mineral deposit discoveries, including most recently the Ana Paula Gold deposit in Guerrero State. He was also responsible for assembling extensive land packages in several important districts with excellent exploration potential, resulting in several Joint Venture agreements with major international mining companies as well as Canadian junior explorers, and was instrumental in the reactivation of the Moris mine in Chihuahua State with Hochschild Mining. Dr. Gibson is a Certified Professional Geologist of the American Institute of Professional Geologists and has also published technical articles on a variety of mineral deposits in several journals.


 

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