Santacruz Silver Updates Panuco Deposit, Veta Grande Project Resource Estimate to 19.5 Million AgEq Ounces Inferred
TSX.V: SCZ
FSE: 1SZ
August 29, 2019
Santacruz Silver Updates Panuco Deposit, Veta Grande Project Resource Estimate
to 19.5 Million AgEq Ounces Inferred
Vancouver, B.C. – Santacruz Silver Mining Ltd. (TSX.V:SCZ) (the “Company” or “Santacruz”) reports that it
is today filing on www.SEDAR.com a technical report titled “Technical Report, Veta Grande Project, Zacatecas
State, Mexico ” dated effective August 20, 2019 (the “Technical Re port”) containing an updated mineral
resource estimate , u nder National Instrument 43 -101 Standards of Disclosure for Mineral Projects ("NI 43 -
101"). The Technical Report super sedes all previous technical reports prepared for the Company relat ing to
the Veta Grande Project.
The Technical Report is being filed in connection with the Company’s information circular, which is also being
filed today, relating to the Company ’s annual ge neral meeting ( “AGM”) scheduled for October 1, 2019. The
information circular includes disclosure relating to the proposed acquisition from Carlos Silva, the Company ’s
COO, of the remaining 50% shareholding in PCG Mining, S.A. de C.V., a private Mexican company (the “Silva
Acquisition”), the pr incipal asset of w hich is a 20% w orking interest in Santacruz’s Veta Gr ande Project (see
press release dated May 22, 2019) . At the AGM, s hareholders will be asked to approve a reso lution
authorizing the Silva Acquisition pursuant to the requirements of the TSX Venture Exchange. The Technical
Report and the information circular can be viewed on the Company’s website at www.santacruzsilver.com or
on SEDAR at www.sedar.com.
Summary of the Technical Report
Location, Exploration and Drilling
The Ve ta Grande Project consists of 184 mining concessions covering an area of 8,944 hectares (22,102
acres) in the Zacatecas Mining District, Mexico. The Veta Grande Project is divided into three concession
groups, described as the Veta Grand e properties, Minillas property and Zacatecas properties. Although the
concession groups are mostly contiguous and have the possibility of sharing the same i nfrastructure, the
nature of Santacruz’s initial ownership of each concession group are materially different. For this reason, the
Technical Report describes the three groups as individual properties within one project area.
Santacruz has collected 472 surface rock samples (channel, chip and grab samples) on various vein
exposures within the project area. From underground workings, a total of 2,808 underground channel samples
have been collected from at least five veins (La Cantera, Veta Grande, Armado s, San Jose, and La Flor) from
five underground workings (Armados, Garcia, Guadalupana, La Mecha and Cigarrero).
In August of 201 6 Santacruz collected 41 chip samples across the width of the Panuco NW, Panuco Central
and Tres Cruces veins. No other explor ation activities have been conducted by Santacruz and the Company
has not performed drilling on the Panuco deposit.
Between Janu ary 24, 2018 and March 26, 2019 Santacruz completed 43 diamond drill holes totaling
13,665.60 m . The work was designed to test for mineralizatio n in proximity to and below the lowest known
levels of the Armados, Garcia and Navidad underg round workings. Significant mineralized intersections were
encountered at the Veta Grande vein to the northwest and below the Garcia mine workings. At th is location,
assay results range from no significant intersections in VG18 -009 to 280.10 g/t Ag over 1. 59 m in drill hole
VG19-014A. Drilling within the Armados mine from the general ramp below Level -4 resulted in several
significant intersections of the Armados vein that range between 129.67 g/t Ag to 235.69 g/t Ag over widths
that range between 1.00 m to 3.76 m. Intersections into the Navidad vein intersected grades ranging between
trace Ag up to 668.64 g/t Ag over 1.95 m in NA18-006. The Phase 1 drill program was successful at identifying
additional mineralizatio n below the known workings in each mine area t ested. Intersections are reported in
approximated true thickness.
The Veta Grande Project is located near the so utheastern boundary of the Sierra Madre Occidental
physiographic province in north -central Mexico, within the State of Zacatecas and cons titutes a portion o f the
Zacatecas Mining District and Mexican Silver Belt. The Zacatecas Mining District is comprised of th ree
Mesozoic formations that were subsequently covered by Paleocene volcanic rocks and Quaternary cover.
The project concession boun daries contain a number of northwest -southeast striking, southwest dipping, low -
sulphidation epithermal silver (+gold+lead+zinc) vein systems including Veta Grande, La Cantera and Panuco,
among others. In surface outcrop, the veins can be traced over a distanc e of 2.4-3.0 km. Veins range from
less than 1 m to over 30 m in thickness and consist of quartz, cha lcedony, calcite and pyrite, often showing
banded, colloform, crustiform, vuggy and/or brecciated textures. The dominant sulfide minerals include
sphalerite and galena along with argenti te and native silver, and they occur as disseminations, bands, or
zones of massive sulfide. Weak to moderate pervasive silicification and narrow zones (1-5 m) of weak argillic
and propylitic alteration immediately sur round the veins. Locally, the veins are generally hosted within mafic to
intermediate intrusives, intermediate volcanosedimentary rocks, and clastic sediments. These units were
subsequently cut by younger diorite to quartz-diorite dykes.
Mineral Resource
The Panuco deposit is the only mineral resource estimate calculated and reported for the Veta Grande project.
The mineral resource in the Technical R eport has an effective date of July 12, 2019 and has been changed
since the previous technical report (with e ffective date of January 31, 2017) due to improvements in the
geometric modelling process applied to develop the geometry of the veins and the consequent changes to the
sample selections and compositing for the estimation.
The wireframe models representing t he mineralized solids were filled using rotated block models with blocks
measuring 20 m along strike and dip, and 1 m across strike. Sub-cells were used to fill the models to represent
accurate volumes . A different rotation was applied to the block model for each vein to provide a best -fit for
each partic ular vein st rike and dip. Average bulk dens ity of 2. 74 was app lied to the vein portions of blocks
while a value of 2.68 was assigned to the waste portions. Grades for gold, silver, lead and zin c were
interpolated into blocks containing some pe rcentage of veins by Ordinary Kriging (OK), in the case of the
Panuco Central vein, and Inverse Distance Squared, in the case of Panuco NW and Tres Cru ces vein. Each
vein was estimated separately using onl y composites from the corresponding vein. Due to the sparsity of drill
hole data both drill hole and surface trench composites were used for estimation. A comparison was made
between the vein composites and the estimated blocks. The results show reaso nable agreement wit h no
significant bias. T he relatively sparse data for all three veins has led to classifying all estim ated block s as
Inferred.
An economic assessment or similar study has n ot been completed fo r the Panuco deposit and an economic
cut-off value has not been estimated. The authors of the Technical Report are of the opinion that based on
the mineralization c haracteristics, grade, location an d other factors, the Panuco deposit has similarities to the
Veta Gran de vein system, which is located five km south of t he Panuco deposit. Mining operations are
currently conducted at a cut-off value of 100 g/t Ag at the Veta Grande.
Applying a nominal cut-off v alue of 100.0 g/t AgEq for the Panuco deposit, the inferred mineral resource
estimate is 3,954,729 tonnes grading 136.00 g/t Ag, 0.14 g/t Au, 0.012% Pb and 0.110% Zn or 153.20 g/t
AgEq. This represents 19,472,901 ounces of AgEq as shown in the table below.
Resource classed as Inferred within all mineralized Veins
Cut Off
AgEq (g/t)
Tonnes >
Cut-off t (m)
Ag (g/t) Au (g/t) Pb (%) Zn (%) AgEq (g/t) AgEq (Ozs)
70 5,633,142 117.66 0.13 0.010 0.088 133.0 24,079,401
75 5,405,259 119.98 0.13 0.010 0.090 135.5 23,548,065
80 5,142,065 122.60 0.14 0.011 0.094 138.5 22,892,412
90 4,477,091 129.62 0.14 0.011 0.102 146.4 21,069,521
100 3,954,729 136.00 0.14 0.012 0.110 153.2 19,472,901
115 3,196,451 145.94 0.15 0.012 0.118 163.9 16,847,056
125 2,512,119 156.72 0.15 0.013 0.126 175.8 14,199,767
140 1,921,356 169.60 0.16 0.014 0.126 189.3 11,696,524
150 1,505,278 181.28 0.17 0.014 0.124 201.5 9,753,081
175 915,428 207.87 0.18 0.014 0.108 228.2 6,715,702
Recoveries are based on actual recoveries from the Veta Grande mineral processing facility which is currently
processing material from the nearby Veta Grande vein system.
The metal prices used in the silver equivalent estimate are listed below.
Gold price $1,350/oz Recovery - 52.2 % Factor = Au *Rec*Price/31.1035 = 22.66
Silver price $16.00/oz Recovery - 62.1 % Factor = Ag *Rec*Price/31.1035 = 0.32
Lead price $0.90/lb Recovery - 87.9 % Factor = Pb% * 22.046223 * Rec * Price = 17.44
Zinc price $1.10/lb Recovery - 78.6 % Factor = Zn% * 22.046223 * Rec * Price = 19.06
GMV = (Au *Rec*Price/31.1035) + (Pb% * 22.0462 * Rec * Price) + (Ag * Rec * Price/3 1.1035) + (Zn% *
22.0462 * Rec * Price)
AgEq = GMV / Ag Factor = GMV / 0.32
Data Verification and Site Visit
During a site visit between July 9-10, 2019, Van Phu Bui, P. Geo of ARC Geoscience Group (“ARC”) reviewed
drill collar locations and minerali zed drill core intersections for the 2018/2019 Phase 1 drill program completed
at the Garcia, Armados and Navidad mine areas. ARC collected five q uarter-core samples to verify the
presence of mineralization. The five verification samples returned analytica l results that includ e silver
concentrations ranging between 10.20 g/t Ag to 575.30 g/t Ag. ARC performed a 10% quality control check on
collar locations, mineralized drill co re sample intervals, and geological descriptions. No material discrepancies
were identified and ARC ha s no reason to doubt the authen ticity a nd qu ality of the information. During the
same site visit, ARC confirmed that no addit ional work has been performed on the Panuco deposit since the
initial surface sampling program completed by Santacruz in 2016 and ARC’s site visit on August 16-19, 2016.
Sampling and Laboratory
For the Pamuco deposit, h alf-core samples and chip samples from surface trenches were sub mitted to ALS
Chemex in Zacatecas, Mexico, and were assayed at ALS Chemex in Vancouver, Canada. ALS Chemex, now
ALS Mineral, is an ISO accredited and certified laboratory service. All samples were pr epared by crushing
70% to <2 mm (CRU -31). The fines are r ifle split and further pulverized 85% to <75 microns (PUL -31). Pulps
were then analyzed by 33 element four acid ICP -AES (0.25 g by ME -ICP61) and fire assay with an AA finish
for gold (50g by Au-AA24). Samples with gold results above 10 g/t using Au -AA24 were rerun using fire assay
with a gravimetric finish (50g by Au -GRA22). Samples with silver above 100 g/t using ME -ICP61 were rerun
using fir e assay with gravimetric finish (30g by Ag -GRA21). Over -limit for copper, lead and zinc using ME -
ICP61 were rerun by an aqua regia digestion with an ICP-AES finish (ME-OG62).
For the Phase 1 drill pr ogram, drill core was logged, photographed and cut in half with a diamond saw. Half -
core samples were sent to SGS Minerals Services in Durango, Mexico (17025 accredited), for preparation and
analysis. Drill core samples were analyzed for 33 eleme nts by four -acid digestion of a 0.5 -gram sample
followed by a n ICP-AES (inductively coupled plasma atomic emission spectroscopy) finish. Over -limit for Pb,
Zn and Cu were further analyzed by sodium peroxide fusion of a 0.5 -gram sample followed by ICP-AES finish.
Au and Ag was also analyzed by fire assay of a 30 -gram sample followed by AAS (atomic absorption
spectroscopy) finish for Au and gravimetric finish for Ag. As part of the comp any's quality assurance/quality
control (QA/QC) program, independently cer tified control sa mples (standard and blank pulp samples) were
inserted in each analytical batch. Field duplicate samples were also submitted for analysis. The control and
duplicate sample results were then checked to ensure proper QA/QC.
Qualified Persons
All scientific or technical information included in this press release has been reviewed and approved by the
two authors of the Technical Report, namely Van Phu Bui, P.Geo. of ARC Geoscience Group and Michael F.
O’Brien, P. Geo of Rockridge Partnership & Associates , each of w hom is a qualified pers on and is
independent of the Company within the meaning of such terms in NI 43-101.
About Santacruz Silver Mining Ltd.
Santacruz is a Mexican focused silver com pany with two producing silver projects, Veta G rande and Rosario.
The Veta Grande Project includes two exploration properties, the Minillas property and Z acatecas properties.
The Company also owns 50% of PCG Mining, S.A. de C.V, a holding compa ny that owns 100% of Carrizal
Mining S.A. de C.V. Carrizal Mining is a priv ate Mexican mining company, the principal asset of which is a
20% working interest in the Company’s Veta Grande Project. Carrizal Mining also has the right to operate the
Zimapan Mine until December 31, 2019 under a mining lease agreement.
The Company i s managed by a technical tea m of pr ofessionals with proven tra ck records in developing,
operating and disc overing silver mi nes in Mexico. Our corporate objective is to become a mid -tier silver
producer.
‘signed’
Arturo Préstamo Elizondo,
President and CEO
For further information please contact:
Arturo Prestamo
Santacruz Silver Mining Ltd.
Email: [email protected]
Telephone: (011) (52) 81 8378 5707
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.
Forward looking information
Certain statements contained in t his news release constit ute "forward -looking information" a s such term is
used in applicable Canadian securities l aws, including s tatements relatin g to the Silva Acquis ition and the
inferred mineral resource for the Panuco deposit. Forward-looking information is based on plans, expectations
and estimates of management at the d ate the infor mation is provided and is subj ect t o certain factors and
assumptions. In making the forward -looking sta tements included in this ne ws release, the Company has
applied several material assumptions, including that the Company's financial condition and development plans
do not change as a re sult of unforeseen events, that the Company will receive all requir ed r egulatory
approvals to complete the Silva Acquisition and that future metal prices and the demand and market outlook
for metals will remain stable or improve. Material assumptions relating to the inferred mineral resource are
contained in the Technical Re port. Forward-looking inf ormation is s ubject to a variety of risk s and
uncertainties and other factors that could cause plans, estimates and actual resul ts to vary materially from
those projected in such forward -looking information. Factors that coul d cause the forward-looking information
in this news release to change or to be inaccurate include, but are not limited to, the risk that any of the
assumptions referred to above prove not to be valid or reliable ; delays and/ or cessation in planned work;
changes in the Company's financ ial condition and development plans; risks associa ted with the interpretation
of data (including in respect of the third party mineralized material) regarding the geology, grade and c ontinuity
of mineral deposits; the uncertai nty of the geology, grade and continuity of mineral deposits and the risk of
unexpected variations in mineral resources, grade and/or recovery rates ; market conditions and volatility and
global economic conditions; risks related to gold, silver, base metal and other commodity price flu ctuations;
risks relating to environmental regulation and liability; the possibility that results will not be consistent with the
Company's expe ctations, as well as the other risks and uncertainties applicable to mineral explo ration and
development activit ies and to th e Company as set forth in the Company 's continuous disclosur e filings filed
under the Company's profile at www.sedar.com. There can be no assurance that any forward -looking
information will prove to be acc urate, as act ual r esults and future ev ents could d iffer materially from t hose
anticipated in such statements. Accordingly, the reader should not place any undue reliance on forward -
looking information or statements. The Compan y un dertakes no obligation to update forwar d-looking
information or statements, other than as required by applicable law.
Rosario Project
The decisions to commence production at the Rosario Mine, Cinco Estrellas Property and Membrillo Prospect
were not based on a feasibility study of mineral reserves demonstrating economic and technical viability, but
rather on a more preliminary estimate of inferred m ineral resources. Accordi ngly, ther e i s in creased
uncertainty and economic and technical risks of failure a ssociated with this produ ction decision. Pr oduction
and economic var iables may v ary considerably, due t o the absence of a complete and detailed site analysis
according to and in accordance with NI 43-101.
Veta Grande Project
The decision to commence produc tion at Veta Grande Project was not based on a feasibility study on mineral
reserves demo nstrating econ omic and technical viability. Accordingly, th ere is increased uncertai nty and
economic and techn ical risks of failure associated with this production de cision. Production and e conomic
variables may vary considerably due to the absence of a complete and detailed site analysis according to and
in accordance with NI 43-101.