Your browser does not support script

News

News

Show printable version of 'Aura Silver Submits Final Earn-In Deliverables For...' in a New WindowEmail 'Aura Silver Submits Final Earn-In Deliverables For...' to a friend
News Releases
 October 05, 2011
Aura Silver Submits Final Earn-In Deliverables For its Taviche Project in Mexico; Announces NI 43-101 Resource Estimate & Preliminary Economic Assessment

 Aura Silver Resources Inc. (TSX-V:AUU) ("Aura Silver" or the "Company") announces that it has submitted the final deliverables required under the terms of the option agreement (the "Option Agreement") for the Taviche Project, Mexico to Plata Panamericana S.A. de C.V. ("Plata", Pan American Silver Corporation's wholly-owned Mexican subsidiary) in order to exercise the option to vest the Company's working interest in the Taviche Project. The Option Agreement was recently amended to extend the final earn-in period from September 1, 2011 to September 30, 2011. Final deliverables required under the terms of the Option Agreement include: delivery of a preliminary assessment under NI 43-101; payment of the final option payment of US$250,000; and, details supporting the direct exploration expenditures incurred for the Taviche Project over the earn-in period. Under the terms of the Option Agreement, Plata has a period of time to evaluate these earn-in deliverables and may request certain additional back-up documentation. Upon satisfactory completion of the earn-in, the Option Agreement contemplates that a joint venture agreement amongst Plata, Aura Silver and Intrepid Mines would be established.

Inferred Resource Estimate
The preliminary NI 43-101-compliant technical report entitled "Taviche Project, Resource Estimate and Preliminary Economic Assessment for the Higo Blanco Project" (the "43-101 Report") was prepared by Geoffrey S. Carter, P. Eng. of Broad Oak Associates and is dated September 28, 2011. The 43-101 Report provides estimates of an Inferred silver resource of 865,000 tonnes at a grade of 119 g/t for 3.3 million ounces of contained silver and an Inferred gold resource of 3.3 million tonnes at a grade of 0.51 g/t for 54,000 ounces of contained gold. The resource estimate is based on intercepts from 14 drill holes undertaken by the Company with core lengths ranging from 63.5 metres to 161.6 metres. The intercept values for gold and silver provided have been weighted and summed as a global estimation of grade within a geometric envelope referred to as the 'deposit'. The grades utilized in this estimate are 118.6 g/t Ag and 0.51 g/t Au. Each intercept has been selected on the basis of assay grades rather than geologic or mineralogic characteristics; there has not been any compositing of values within the selected intervals. Weighting of the individual intercepts has been done as an attempt to recognize broad, low grade zones.

The silver and gold zones have been modeled on the basis of detailed geologic sections and boundaries and limits have been designed on the basis of "what appears to be reasonable" -- no specific conventions have been applied. A polygon, thought to represent the 'deposit' on any given section, is assigned an estimate of area and an influence defined by adjacent holes to arrive at a volume estimate.

The Company believes that the complexity of the geology and the diverse nature of past drilling have limited the calculation of the NI 43-101 compliant Inferred resources. The Company intends to file the finalized 43-101 Report within the required timelines of NI 43-101 so that it will be publicly available under Aura Silver's profile at www.sedar.com.

Mineral Potential Estimate
Additionally, the 43-101 Report includes an estimation of "Mineral Potential" located near or within its seven kilometre-long by 300 metre-wide Higo Blanco jasperoid -altered area on the East Taviche and Alma Delia concessions. This Mineral Potential is estimated to be between 6.0 million and up to 29.0 million ounces of silver (2 to 6 million tonnes at a grade of 100 to 150 g/t) and between 108,000 and up to 450,000 ounces of gold (10 to 20 million tonnes at a grade of 0.4 to 0.7 g/t).* As reported in the 43-101 Report the basis for this Mineral Potential estimate: "The extensive silicification and other minerals, along the strike length of the mineralizing hydrothermal system, and geologic model suggesting that the Higo Blanco Project is in the upper part of this extensive hydrothermal system, would indicate that there is significant potential for both mineralized material at depth, and along strike as well as further separate mineralized zones. Both the strike length of the hydrothermal alteration and depth potential of the hydrothermal system suggest that this is a highly prospective area for both further exploration and perhaps a re-interpretation of all the geological data obtained to date."

* The potential quantity and grade is conceptual in nature, there has been insufficient exploration to date to define this as a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource.

Preliminary Economic Assessment
This preliminary economic assessment is preliminary in nature, and has been prepared using inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the preliminary economic assessment will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.


The preliminary economic analysis section of the 43-101 Report does not comply with CIM Definition Standards (Nov. 22, 2005) for Mineral Resources and Mineral Reserves, and therefore does not meet CIM best practices. A Quote from CIM definitions and standards is as follows:

Due to the uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration. Confidence in the estimate is insufficient to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure. Inferred Mineral Resources must be excluded from estimates forming the basis of feasibility or other economic studies.

A summary of the significant assumptions and results of the preliminary economic assessment are as follows:

Input parameters for Base Case:

Operating costs $83.00 per tonne
Mill silver recovery 80%
Silver price $35 per ounce
Capital costs $7.29 million
Working capital $3.00 million (3 months of operating costs)
Reclamation $0.50 million


Base Case Cash Flow Model:
A 6 year mine life at 500 tonnes per day has been assumed, along with a reconditioned mill. Net present values (NPV) derived in the base case cash flow model are summarized as follows:
    NPV @ 5% -$1.433 million
    NPV @ 7% -$1.987 million
    NPV @ 10% -$2.674 million
This preliminary economic analysis indicates the project would be quite difficult to finance at its present stage of exploration. It is necessary to upgrade the small inferred resource in order to support a positive economic analysis.

The Company will be planning another drill program focusing on the Higo Blanco prospect in order to identify the zone, likely at depth, of the high grade silver and gold mineralization close to surface.

Geoffrey S. Carter, P. Eng. of Broad Oak Associates is an independent qualified person (as defined by National Instrument 43-101) and is the author of the 43-101 Report and Dr. James M. Franklin, P. Geo. is Aura Silver's qualified person, both have reviewed and approved the scientific and technical information in this press release.

About Aura Silver
Aura Silver is a TSX Venture listed company engaged in the acquisition, exploration and development of precious metal prospects in Canada (100% owned Greyhound project) and in Oaxaca, Mexico. Aura Silver has 97,680,844 common shares outstanding.

For further information regarding this financing contact: Robert Boaz, President and CEO at (905) 403-8010 or by e-mail at boaz@aurasilver.com. Aura Silver's web site is located at www.aurasilver.com.

FORWARD-LOOKING STATEMENTS
This press release may contain forward looking statements that are made as of the date hereof and are based on current expectations, forecasts and assumptions which involve risks and uncertainties associated with our business including the uncertainty as the preliminary nature of the preliminary economic assessment, the conceptual nature of exploration, the completion of the earn-in requirements under the option agreement, the joint venture arrangements with Plata and Intrepid, as to whether further exploration will result in the target(s) being delineated as a mineral resource, capital expenditures, operating costs, mineral resources, recovery rates, grades and prices, estimated goals, expansion and growth of the business and operations, the private placement financing activities of the Company, plans and references to the Company's future successes with its business and the economic environment in which the business operates. All such statements are made pursuant to the 'safe harbour' provisions of, and are intended to be forward-looking statements under, applicable Canadian securities legislation. Any statements contained herein that are statements of historical facts may be deemed to be forward-looking statements. By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. We caution readers of this news release not to place undue reliance on our forward-looking statements as a number of factors could cause actual results or conditions to differ materially from current expectations. Please refer to the risks set forth in the Company's most recent annual MD&A and the Company's continuous disclosure documents that can be found on SEDAR at www.sedar.com. Aura Silver does not intend, and disclaims any obligation, except as required by law, to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.