Southern Silver Exploration is an exploration and development company with a focus on advancing its 100%-owned Cerro Las Minitas project in Mexico. Southern Silver’s property portfolio also includes the Oro porphyry copper-gold project and the Hermanas gold-silver vein project that are located in southern New Mexico.

Southern Silver’s VP of exploration, Rob Macdonald sits down with The Market Herald Canada to discuss the company and its project portfolio.

TMH: Rob, for new investors, give me a quick overview of Southern Silver Exploration.

Macdonald: Southern Silver is currently moving its flagship Cerro Las Minitas project located in Durango, Mexico. It is currently one of the largest and highest grade underdeveloped silver-based projects in the world with indicated resources totaling 140 million silver equivalent ounces and inferred resources totaling 210 million silver equivalent ounces. We are currently moving the project through the preliminary economic stage of pre-development and have exciting news coming forward in the fall, as well as some of the other exploration projects that you mentioned earlier.

TMH: You have three projects – one in Mexico and two in New Mexico, United States. Let’s start with your flagship Cerro Las Minitas located in the Faja de Plata (Belt of Silver) of north central Mexico. What makes this area so significant?

Macdonald: Cerro Las Minitas is a large property package. It’s located on the western side of the Altiplano. That’s the interior plateau of North Central Mexico. It means that we’re not the mountains, we’re out of the way of the narcos; and as I like to joke: “We’re in the middle of the bean fields, not the marijuana fields.”

It makes it a very safe jurisdiction to be working in and it’s also logistically very easy. We’re located just an hour drive away from the city of Durango, only 45 minutes away from the airport. We have infrastructure, highways and power lines running right through the property. And then we operate out of the town of Guadalupe Victoria, which is located just a short 10-minute drive away from the project area.

TMH: What are your PEA highlights?

Macdonald: We announced the PEA results late last year and this provided us the initial look at the economics of the CLM project. It also provided a roadmap as to what we have to improve as we move forward. The PEA showed on a Base Case scenario with an NPV at a 5% discount of US$349 million with an internal rate of return of 18%. At the Base Case metal values plus 15%, which would be about $25/ounce silver and a $1.50/pound zinc for example, that then ups to US$560 million NPV at a 5% discount and an internal rate of return of just under 25%. So, they are really robust numbers with excellent cashflow over a 15-year mine life. It is a very, very desirable project as we continue to refine and develop it moving forward.

TMH: You’ve had some metallurgical scoping results in June. What did you find?

Macdonald: The focus of the metallurgical test work, post-PEA, was (to) add gold mineralization into the current cashflow model. It was very successful. We were able to identify a +70% recovery for both the sulfide mineralization and the oxide mineralization. Now, much of the cost for extracting the gold mineralization were built into what’s called the process flow sheet. So, in this case, the value of the recovered gold literally goes straight to the bottom line. It was great news adding a new element to the financial picture for the project.

TMH: Tell us about the interactive 3D and 360-degree presentation on the VRIFY platform.

Macdonald: We’ve recently adopted the VRIFY platform which we have embedded into our presentations and are featuring on our website. So, what this does, is it allows the viewer to see the block model with the distribution of mineralization, the mine design and the surface infrastructure, all laid out in three dimensions as well as the location and superior logistics of the project. We find it a very effective tool for understanding the project and I would invite all of your viewers to go visit the website to have a look for themselves. I think it is very enlightening.

TMH: What is next for Cerro Las Minitas?

Macdonald: With Cerro Las Minitas, we continue to refine the economics of the project and we’ll be doing that for probably the next two to three months. So some more time in the fall we hope to be able to share these results, and what we’re doing here is adding new mineral resources that we reported back in March. We’re updating the mine design and the processing, adding in the gold, and so there’s new elements that we’re adding in as well as some further refinements to the earlier model that we published late last year. All of this is going to increase the economic benefit of the project and just make it so much better.

TMH: You have identified favourable targets for copper, gold and silver exposure at your Oro and Hermanas Projects in New Mexico – what update can you give us on the Oro Project?

Macdonald: On the Oro Project this past year we completed four holes totaling 4,050 metres and we were able to confirm the geological model of the project. What we have is a buried porphyry system. It’s rotated a little bit. We believe that we’re right at the top, the very top of the system.

So it means there’s tremendous potential throughout the property, so much so that we’ve added 62 new claims on the project. Some claims on the northern part of the project where we’re identifying some high-grade replacements, silver and base metal rich replacements, and then some claims on the eastern side of the project where we’re looking at a distal gold target.

So this is a continuing, evolving story and we are going to be getting back at it as we finish the work that we’re doing on the CLM project.

TMH: And your Hermanas project?

Macdonald: Hermanas is even a little bit earlier stage than Oro. We’re just starting on it. We’ve mapped out the veins, we’ve sampled the veins, verified some of the historical data, brought this together and are now in the process of permitting for drilling in 2024. So again, more catalysts to come (and) more good news to come.

TMH: Is there anything else you would like investors to know about Southern Silver?

Macdonald: First of all, thank you all for showing up to view the presentation. I think we have a number of catalysts moving forward through the fall and into 2024. There’s a terrific lull in the market right now, but I think that as things pick up again, as they always do, that we will be well positioned to capitalize that with the work that we’ve been doing over these last months.

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