This is an exciting period in the development of South American Silver Corp. In addition to the 100% owned large scale Chilean project, South American Silver is actively seeking to acquire a new project, to offer exceptional investment value to shareholders.
The Escalones property lies within the well-known central Chilean porphyry copper belt that runs north-south through Chile in the central Andes Mountains. It is located approximately 100 km southeast of Santiago and 35 kilometers due east of El Teniente, the world's largest underground copper mine. The project has excellent infrastructure, including road access and a gas pipeline that crosses the 70 square kilometer property.
In late 2011, a new NI 43-101 qualified Inferred Resource was announced at Escalones of 420 million tonnes of mineralized material containing 3.8 billion lbs. of copper, 56.9 million lbs. of molybdenum, 610,000 oz. of gold, and 16.8 million oz. of silver at a grade of 0.41% copper, 0.05 g/t gold, 1.24 g/t silver and 61 ppm molybdenum using a 0.2% copper equivalent cut-off grade. This is a copper-equivalent content of 4.5 billion pounds of copper grading 0.49% based on approximate 3-year average metal prices as of December 2011.
The Escalones project has significant opportunity for expansion of the known mineralization ad resource. The property hosts a four-square-kilometer area of hydrothermal alteration with coincident geophysical anomalies that has demonstrated significant grades of copper, gold and silver in replacement-style "skarn” mineralization hosted in limestone and in porphyry related mineralization. The Escalones deposit is open to expansion laterally and down dip with 90% of the current resource hosted in replacement-style mineralization and one drill hole testing porphyry-style mineralization.
Initial interpretation of a ZTEM and aeromagnetic geophysical survey shows several large areas of untested conductivity anomalies, which may represent areas of potential additional sulfide mineralization related to both replacement-style and porphyry mineralization. 2D and 3D modeling and interpretation of these geophysical targets is in progress.
A Phase-II Exploration Program commenced in early 2012 and will include up to 7,000 meters follow up drilling, including both step-out testing of the known mineralized zones and the testing of new targets based on geochemistry and geophysics. Work will focus on understanding the scale of the system by testing both porphyry and replacement-style mineralized zones. In 2012, we also plan to complete a resources update for the Escalones project, as well as initial engineering work including metallurgical test work, and a Preliminary Economic Assessment study.