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Gatos Silver Reports New Intercepts of High-Grade Mineralization at Cerro Los Gatos

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Gatos Silver Reports New Intercepts of High-Grade Mineralization at Cerro Los Gatos

 

 

 

 

 

Gatos Silver, Inc. (NYSE:GATO) (TSX: GATO) provided an update on the drilling and exploration programs in the Los Gatos district in Mexico. The update includes new intercepts of high-grade mineralization in the South-East Deeps zone of its 70%-owned Cerro Los Gatos mine.

 

“These latest results from the SE Deeps resource conversion drilling program continue to highlight the opportunity to extend the CLG mine life,” said Dale Andres, CEO of Gatos Silver. “We have six of seven surface drill rigs continuing on SE Deeps conversion drilling during the first quarter. We remain very encouraged by the continuity and grade of mineralization extending beyond our current mineral reserve, and we are looking forward to incorporating these results into an updated mineral reserve and mineral resource estimate which we expect to complete in the third quarter of 2024.”

 

Q4 2023 Highlights

  • Resource definition drilling in the SE Deeps zone of CLG intercepted additional high-grade mineralization below the existing mineral reserve (see Table 1 for complete intercept details)
    • 3.0m (2.8m ETW) at 528 g/t Ag, 1.26% Pb and 1.41% Cu (SE-557)
    • 2.0m (1.6m ETW) at 291 g/t Ag, 4.27% Zn, 12.20% Pb, 0.40 g/t Au and 0.55% Cu (SE-558)
    • 5.1m (4.0m ETW) at 103 g/t Ag, 16.49% Zn, 7.01% Pb, 0.14 g/t Au and 0.21% Cu (SE-559)
    • 4.0m (3.3m ETW) at 243 g/t Ag, 9.74% Zn, 6.01% Pb, 0.39 g/t Au and 0.28% Cu (SE-560)
    • 3.0m (2.5m ETW) at 179 g/t Ag, 5.84% Zn, 4.49% Pb, 1.10 g/t Au and 0.65% Cu (SE-562)
    • 10.7m (8.9m ETW) at 133 g/t Ag, 8.34% Zn, 3.21% Pb, 0.11 g/t Au and 0.16% Cu (SE-563)
    • 1.6m (1.3m ETW) at 201 g/t Ag, 15.45% Zn, 4.32% Pb, 0.25 g/t Au and 0.73% Cu (SE-572)
  • Greenfields exploration work in the LGD continues to advance in preparation for increased drilling expected to start in Q2 2024
    • We completed one hole at Portigueño and one hole at Cascabel with positive indicator minerals and favourable structures present
    • We completed detailed mapping and rock geochemistry at the Esperanza, San Agustin, Portigueño, Cieneguita and San Luis areas to support drill target generation

 

CLG South-East Deeps Resource Definition Drilling

 

The SE Deeps mineralization extends approximately 1km laterally and 400m vertically, which adjoins the existing SE mineral reserve and remains open along strike.

 

During 2022 and Q1 2023 we completed drilling at approximately 100m to 200m spacing for the purpose of establishing the larger scale strike and dip of the SE Deeps zone. Since Q2 2023 we have focused on infilling the higher-grade areas of the zone to 50m spacing. That drilling has progressed well and we remain on track to complete the expected 50m spacing of key areas by the end of Q1 2024. As expected, this tighter drill spacing is showing that variability within the zone exists, with higher grade in some areas and lower grade in other areas. On average, base metals including copper, represent a higher proportion of the in-situ value than in the Central and North-West zones. Drill results continue to demonstrate excellent potential for a multi-year mine life extension.

 

Figure 1: Long section of CLG1 showing SE resource definition drilling intercepts (drilled width) received since our press release dated October 23, 2023. See Table 1 for complete intercept details including true width estimates.2

 

 1 The 2023 Mineral Reserve and 2023 Mineral Resource is disclosed in the Technical Report Summary dated October 20, 2023 (the “Los Gatos Technical Report”) which is filed with the SEC and available on the Company’s website (https://gatossilver.com). A corresponding technical report has also been filed on SEDAR+.

2 See press releases dated July 18, 2023 and October 23, 2023 for further information relating to the other previously reported SE Deeps drill intercepts received since the 2023 resource database cutoff date of March 31, 2023.

 

Figure 2: Cross-section through centre of SE Deeps at drillhole SE-558 showing intercepts (drilled width)

 

 

 

Los Gatos District Exploration Update: Current Near-mine Focus Plus District Scale Potential

 

The LGD is comprised of a large land package covering over 103,000 hectares with an established pipeline of prospects and more than 50 targets identified to date. We are advancing with detailed mapping and drill testing of the highest priority known targets. We are also advancing with district mapping and geophysics to identify additional targets.

 

During the fourth quarter of 2023 we progressed with mapping at five prospective areas: Esperanza, San Agustin, Portigueño, Cieneguita and San Luis.

 

Two drillholes were completed during the quarter, PO-01 at Portigueño and CA-SE-01 at Cascabel.

 

The Portigueño area is located approximately 2km southeast of CLG. Detailed mapping during 2023 showed that this area of the basin is more complex than previously thought. Drillhole PO-01, located approximately 1km south-east of the SE Deeps zone, was completed during the quarter. This drillhole identified significant fault structures and veining, however none strongly mineralized. The geological model for the area has been updated with the new structural information and follow up drilling is now underway.

 

The Cascabel fault forms the north-eastern edge of a geological graben feature approximately 1.5km south-east of the CLG mine. This fault has an exposed strike of more than 4km and previous drilling and mapping has shown this to be a prospective host structure for CLG style mineralization. Drillhole CA-SE-01 was completed during the quarter exploring below a 2022 intercept with anomalous geochemistry. While the drillhole logging did not show strong polymetallic mineralization, it did show strong structure and alteration at both the Presón fault in the middle of the graben and the Cascabel fault at the margin. The area is considered prospective for mineralization and the information from this drillhole is being used to prioritize the future drilling on this large structure.

 

The San Luis area, approximately 5km northwest of CLG along the Los Gatos fault, continues to be an important target area for our greenfields exploration crew. A large width of quartz-calcite veining exists in the area with indications of multiple pulses of fluid flow, similar to what is observed in the South-East zone at CLG. Mapping and historic core relogging has taken place and the structural modelling is underway in preparation for drilling during 2024.

 

A second stage of a magneto-telluric geophysical survey was completed over the area surrounding CLG and data review is now underway which will help to inform drilling in 2024.

 

Figure 3: Plan view of the area surrounding CLG with select near-mine prospects and high priority drill targets

 

 

Figure 4: Plan view of the Los Gatos district with select prospects and high priority drill targets

 

 

Table 1: Resource Definition Drilling Results1

 

DHID   From To Drill Width Estimated
True Width
Ag Zn Pb Au Cu
    m m m m g/t % % g/t %
GA-SE-552   687.7 689.2 1.5 1.2 71 5.98 2.33 0.55 0.30
GA-SE-552 and 693.8 706.3 12.6 10.0 52 5.07 3.11 0.22 0.09
GA-SE-552 including 695.3 698.8 3.5 3.0 126 8.95 4.55 0.21 0.24
                     
GA-SE-553         NSV          
                     
GA-SE-DV-554 820.3 827.0 6.7 5.5 47 7.04 2.23 0.09 0.40
GA-SE-DV-554 and 843.0 850.0 7.0 5.6 9 2.75 0.68 0.05 0.11
                     
GA-SE-DV-555 764.5 768.0 3.5 3.2 50 5.45 4.94 2.13 0.10
GA-SE-DV-555 and 772.0 781.0 9.0 8.2 35 1.57 0.38 0.05 0.40
                     
GA-SE-557   734.0 741.0 7.0 5.5 245 2.01 1.94 0.30 0.67
GA-SE-557 including 738.0 741.0 3.0 2.8 528 0.32 1.26 0.06 1.41
                     
GA-SE-558   805.1 809.0 3.9 3.1 88 11.67 3.73 0.15 0.23
GA-SE-558 and 818.3 819.8 1.5 1.2 70 2.66 1.68 0.03 0.30
GA-SE-558 and 822.8 827.8 5.0 4.0 151 2.81 6.13 0.18 0.43
GA-SE-558 including 824.3 826.3 2.0 1.6 291 4.27 12.20 0.40 0.55
                     
GA-SE-559   867.0 872.1 5.1 4.0 103 16.49 7.01 0.14 0.21
GA-SE-559 and 905.7 908.7 3.0 2.4 52 9.75 3.20 0.22 0.13
                     
GA-SE-560   712.5 714.3 1.8 1.3 58 3.21 2.22 0.05 0.09
GA-SE-560 and 719.2 723.2 4.0 3.3 243 9.74 6.01 0.39 0.28
                     
GA-SE-DV-561 796.0 806.0 10.0 8.5 36 7.38 1.96 0.11 0.27
GA-SE-DV-561 and 839.5 848.5 9.0 7.7 43 7.41 2.23 0.17 0.26
                     
GA-SE-562   677.8 680.8 3.0 2.5 31 3.11 0.93 0.16 0.08
GA-SE-562 and 705.0 708.0 3.0 2.5 179 5.84 4.49 1.10 0.65
GA-SE-562 and 715.0 717.0 2.0 1.7 20 5.80 2.25 0.40 0.02
                     
GA-SE-DV-563 776.0 786.7 10.7 8.9 133 8.34 3.21 0.11 0.16
GA-SE-DV-563 and 797.0 798.5 1.5 1.2 54 2.83 4.13 0.07 0.11
                     
GA-SE-564   824.1 829.1 5.0 4.0 65 6.07 3.69 0.06 0.18
GA-SE-564 including 825.6 827.1 1.5 1.3 174 16.30 11.25 0.09 0.38
GA-SE-564 and 866.9 870.4 3.5 2.9 40 4.62 3.35 0.31 0.13
                     
GA-SE-565   671.5 675.0 3.5 3.0 19 5.70 1.34 1.01 0.07
GA-SE-565 and 678.0 691.1 13.1 11.1 35 2.19 0.90 0.11 0.68
                     
GA-SE-566   807.0 811.0 4.0 3.2 39 4.92 1.10 0.09 0.10
GA-SE-566 and 814.5 819.5 5.0 4.0 85 6.92 2.36 0.22 0.26
GA-SE-566 including 814.5 816.0 1.5 1.2 183 10.70 5.48 0.48 0.31
                     
GA-SE-DV-567 760.0 764.0 4.0 3.4 53 4.39 1.97 0.10 0.18
GA-SE-DV-567 and 776.5 780.0 3.5 3.0 126 4.59 13.84 0.08 0.17
                     
GA-SE-570   677.0 681.0 4.0 3.3 36 5.38 1.51 0.11 0.07
GA-SE-570 and 687.0 694.0 7.0 6.0 52 0.97 0.87 0.14 0.43
GA-SE-570 including 688.6 692.2 3.6 3.1 78 1.23 0.95 0.02 0.64
GA-SE-570 and 710.5 714.5 4.0 3.4 134 2.18 0.60 0.13 0.89
                     
GA-SE-DV-571 825.0 828.0 3.0 2.4 22 0.56 0.39 0.37 0.38
                     
GA-SE-DV-572 780.9 786.2 5.3 4.8 96 7.82 2.36 0.24 0.35
GA-SE-DV-572 including 784.6 786.2 1.6 1.3 201 15.45 4.32 0.25 0.73
                     
GA-SE-573   728.5 732.0 3.5 3.0 91 1.89 0.56 0.29 0.67

1 Received since our press release dated October 23, 2023. Results from drillhole GA-SE-556 was reported previously (see the Company’s press release dated October 23, 2023), drillhole GA-SE-DV-568 is pending assay results and drillhole GA-SE-569 was abandoned due to drilling difficulties.

 

Table 2: Greenfield Exploration Drilling Results

 

DHID   From To Drill Width Estimated True
Width
Ag Zn Pb Au Cu
    m m m m ppm % % ppm %
                     
DDH-PO-01   NSV
CA-SE-01   NSV

Table 3: Drillhole Locations

 

Drillhole Target Easting Northing Elevation Azimuth Dip Hole Depth
GA-SE-552 Conversion 369,600 3,047,513 1,592 215.0 -60 754
GA-SE-553 Conversion 369,337 3,047,828 1,619 209.0 -54 760
GA-SE-DV-554 Conversion 369,887 3,047,454 1,620 213.5 -57 897
GA-SE-DV-555 Conversion 369,822 3,047,534 1,596 214.4 -52 849
GA-SE-557 Conversion 369,434 3,047,712 1,629 210.0 -60 765
GA-SE-558 Conversion 369,698 3,047,598 1,580 213.0 -58 864
GA-SE-559 Conversion 369,993 3,047,364 1,594 220.1 -62 935
GA-SE-560 Conversion 369,583 3,047,578 1,604 214.0 -58 750
GA-SE-DV-561 Conversion 369,887 3,047,454 1,620 213.5 -57 881
GA-SE-562 Conversion 369,660 3,047,493 1,577 212.0 -62 735
GA-SE-DV-563 Conversion 369,698 3,047,598 1,580 213.0 -58 825
GA-SE-564 Conversion 369,992 3,047,364 1,594 219.9 -58 918
GA-SE-565 Conversion 369,741 3,047,485 1,579 216.0 -50 717
GA-SE-566 Conversion 369,592 3,047,671 1,602 212.3 -57 834
GA-SE-DV-567 Conversion 369,698 3,047,598 1,580 213.0 -58 803
GA-SE-570 Conversion 369,741 3,047,485 1,579 217.0 -53 738
GA-SE-DV-571 Conversion 369,992 3,047,364 1,594 219.9 -58 848
GA-SE-DV-572 Conversion 369,592 3,047,671 1,602 212.3 -57 813
GA-SE-573 Conversion 369,822 3,047,435 1,603 219.0 -45 736
DDH-PO-01 Greenfields 370,534 3,046,824 1,573 236.0 -45 1,145
CA-SE-01 Greenfields 368,669 3,044,506 1,750 35.0 -48 849
               

 

About Gatos Silver

 

Gatos Silver is a silver dominant exploration, development and production company that discovered a new silver and zinc-rich mineral district in southern Chihuahua State, Mexico. As a 70% owner of the Los Gatos Joint Venture, the Company is primarily focused on operating the Cerro Los Gatos mine and on growth and development of the Los Gatos district. The LGJV consists of approximately 103,000 hectares of mineral rights, representing a highly prospective and under-explored district with numerous silver-zinc-lead epithermal mineralized zones identified as priority targets.

 

Quality Assurance/Quality Control

 

The half core samples from the LGJV’s surface exploration drillholes are shipped directly in sealed bags to the ALS Limited (“ALS”) preparation facilities in Chihuahua City, Mexico. After sample preparation in Chihuahua, sample pulps are shipped to ALS in North Vancouver, Canada for analysis. The remaining half core is retained on site. Samples sent for analysis are sawn half-core NQ or HQ in diameter and normally 2m in length but varied based on geological contacts. Samples are prepared using a method whereby the entire sample is crushed, and a subset is pulverized. Samples are analyzed for base metals and silver using inductively coupled plasma methods. Gold and overlimit silver are assayed using fire assay techniques. Sample batches include intermittent blanks, duplicates, and certified standards. The results of the assaying of the QA/QC material included in each batch are tracked to ensure the integrity of the assay data. ALS is a third-party independent laboratory.

 

Qualified Person

 

Scientific and technical disclosure in this press release was approved by Anthony (Tony) Scott, P.Geo., Senior Vice President of Corporate Development and Technical Services of Gatos Silver who is a “Qualified Person” as defined in S-K 1300 and NI 43-101.

 

Posted January 29, 2024

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