Gatos Silver, Inc. (NYSE/TSX: GATO) (“Gatos Silver” or the
“Company”) today provided a quarterly update on the drilling and
exploration programs in the Los Gatos district (“LGD”), including
the extension of the South-East Deeps zone at its 70%-owned Cerro
Los Gatos (“CLG”) mine. The Company also announced a corporate
update regarding the timeline for filing outstanding financial
statements.
Highlights
-
Exploration drilling success continues to demonstrate significant
mine life extension potential through resource conversion and
expansion at CLG.
-
Drilling at CLG has expanded the known extents of the South-East
Deeps zone laterally and at depth
-
Mineralization in the South-East Deeps has now been intersected 415
meters below the bottom of the 2022 mineral reserve reflected in
the Los Gatos Technical Report1. The known strike length over which
significant intercepts have been returned is now more than 950
meters. This amounts to an extension of approximately 410 meters
laterally and 85 meters vertically since October and the zone
remains open laterally and at depth.
-
Drilling highlights from the fourth quarter of 2022 include hole
SE-487 that intercepted 7.2 meters (estimated 5.8 meters true
width) at 191 g/t silver, 2.93% zinc, 2.38% lead and 0.68 g/t gold
and hole SE-498 that intercepted 3.0 meters (estimated 2.0 meters
true width) at 771 g/t silver with lower grade base metals. See
Table 1 for complete intercept details.
-
Resource conversion and extension drilling at CLG in the
North-West, Central and South-East zones has returned strong
results with particularly high base metal values
-
Drilling in all zones intercepted significant mineralization. The
Central zone returned particularly positive results within and
below the 2022 mineral resource area.
-
Drilling highlights from the fourth quarter of 2022 include hole
CZ-485A that intercepted 5.0 meters (estimated 4.5 meters true
width) at 88 g/t silver, 9.99% zinc, 4.35% lead and 0.52 g/t gold
and hole SE-499 that returned 3.0 meters (estimated 2.5 meters true
width) at 158 g/t silver, 3.66% zinc, 8.97% lead, 0.43 g/t gold and
0.86% copper. See Table 2 for complete intercept details.
-
Greenfields exploration work in the LGD has started to identify new
high priority zones
-
Detailed mapping between CLG and Cascabel has identified a
previously unrecognized structure, Mamba, close to the existing
mine development.
-
Greenfields exploration activities continued across parts of the
large, highly prospective property with a focus on detailed
mapping, geophysical interpretation and select drilling.
Dale Andres, CEO of Gatos Silver said:
“We continue to be very encouraged by the
results of our ongoing resource drilling and exploration programs
within the Cerro Los Gatos mine and in the Los Gatos district as we
work towards realizing our district-scale upside. At CLG, the
discovery of the South-East Deeps zone in 2022 was significant, and
further drilling continues to demonstrate the scale and potential
of this mineralized zone. We believe that this zone has the
potential to provide years of mine life extension.
Additionally, we have made solid progress on
resource conversion drilling of high-grade inferred material
located adjacent to existing mine infrastructure. The results of
our ongoing resource expansion and resource conversion drilling
will be reflected in an updated mineral reserve and mineral
resource that is expected to be announced in the third quarter of
2023. Beyond the CLG deposit, we see significant potential for new
discoveries on our extensive land position and we are actively
working on the identification, prioritization and follow-up on the
highest quality opportunities.”
CLG South-East Deeps
Drilling
As previously announced in our News Release
dated October 3, 2022, drilling in the area beneath the main
South-East zone discovered both silver-copper and silver-lead-zinc
mineralization extending significantly below the bottom of the 2022
mineral reserve, an area that is referred to as the South-East
Deeps.
Prior to the discovery of the South-East Deeps,
mineralization at CLG had been recognized between the elevations of
~1,050 masl and ~1,500 masl. Following the latest drilling,
mineralization has now been intercepted down to an elevation of
~735 masl, with a total vertical extent of mineralization in the
South-East zone now more than 650 meters and extending
approximately 415 meters below the bottom of the 2022 mineral
reserve.
Figure 1: Long section showing South-East Deeps drilling
intercepts (drilled width). See Table 1 for full details including
true width estimates.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/64dec8fc-6ec9-4d44-b6f7-4876449c524b
Since the October 3, 2022 announcement, drilling
in the South-East Deeps zone has continued and additional assays
have been received from drilling that was largely focused on
step-out holes towards the NW and SE as well as at depth to
continue defining the extents of the mineralized area.
Based on this latest drilling, the newly
identified mineralized zone now extends more than 950 meters
laterally and 400 meters vertically and continues to remain open
both laterally and at depth. Drilling intercepts to date have
identified a higher-grade core which is where drilling will focus
over the coming months before testing the extents of the zone
laterally.
The South-East Deeps discovery and recent drill
results continue to demonstrate excellent potential for a
multi-year mine life extension, taking advantage of existing
surface and underground mine infrastructure for future mine
development at depth in this zone.
Figure 2: Cross-section through South-East Deeps at
drillhole SE-498 showing intercepts (drilled width). See Table 1
for full details including true width estimates.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/a74b64ae-2f7f-4eeb-af33-186c829471c3
CLG Resource Definition
Drilling
Surface drilling at CLG continued in the fourth
quarter of 2022 to improve confidence in areas of higher-grade
inferred resources in the North-West, Central and South-East zones
of the deposit. In addition to the surface drilling results
described below, underground drilling in these zones continues
targeting both resource conversion and resource expansion which
will also be used in the mineral reserve and mineral resource
update planned for the third quarter of 2023.
Drilling results from all three zones confirmed
the presence of additional above reserve cut-off grade material.
The intercepts in the Central and South-East zones have returned
particularly high base metal results. Completed and future drilling
in these areas, which are adjacent to the 2022 mineral reserve, is
targeting to increase the resource confidence to include this
material in the mine plan update for the third quarter of 2023 and
is anticipated to require only minimal additional mine
development.
Figure 3: Long section of CLG showing select drilling
intercepts (drilled width) from resource conversion drilling. See
Table 2 for full details including true width
estimates.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/83e31856-dfae-475d-abfd-3dd3232ac8b5
Los Gatos District Exploration
Update
In addition to the encouraging resource
extension opportunities at CLG, the LGD, also held by the Los Gatos
Joint Venture (“LGJV”), comprises a large land package covering
over 103,000 ha. The Company considers the district to be very
prospective for hosting additional Ag-Zn-Pb-Au-Cu deposits. The
LGJV has an established pipeline of prospects with over 45 targets
identified to date. Work is advancing on detailed mapping and drill
testing of the highest priority known targets, as well as on
district mapping and geophysics to identify additional targets.
The district exploration strategy is focused on
the exposed section of andesite running from the far north-west
boundary of the property down to Esther and CLG deposits located in
the centre of the property, as well as the large basin located
south and east of CLG which is underlain by andesite and expected
to contain other district scale fault structures that are conducive
to large deposits. Priority areas of interest on the exposed
andesite include the targets identified in the area from CLG to
Esther, the Amapola / Wall-e / Rodeo area, and at El Lince.
During the fourth quarter of 2022, detailed
mapping and surface sampling within the CLG to Esther area has
provided new information on a system of structures and veins known
as the Mamba fault, located within 1 km of the CLG operations.
Surface sampling showed elements consistent with those expected at
the top of a mineralized system (As, Sb, Hg and Mn). In November
2022, a shallow drill hole (MAM-01), was completed with the
objective of confirming the continuity and dip of the structure to
inform follow-up drilling which would target the potential
mineralized horizon deeper in the system. As expected, the initial
drillhole results did not contain significant values for Ag, Zn and
Pb but were encouraging with a wide alteration zone and the
elements consistent with the top of a mineralized epithermal
structure. A deeper follow-up drillhole is planned for Q1 2023 to
test the target.
Figure 4: Plan view of Mamba relative to
the CLG infrastructure and Esther.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/38cc1bce-c055-4c42-aa75-f80e1e2157a0
New detailed mapping in the area of Amapola /
Wall-e / Rodeo has identified numerous new vein and fault
structures. One of the newly identified structures, the Alma vein,
has a zone of veinlets between 1-2 meters over a length of 2 km
with outcrops showing replacement textures that are indicative of
boiling in an epithermal system as well as visible mineralization
including sphalerite, galena and pyrite. At Wall-e, hole WA-06 was
drilled to 780 meters to target approximately 200 meters underneath
the previously disclosed drillhole WA-05. The drillhole intercepted
the structure however the host lithology was insufficiently
fractured for meaningful mineralized volume. Final assays have not
been returned but are not expected to be significant. Further
drilling in this area is planned in 2023.
Additionally, the LGJV has acquired extensive
magnetic and radiometric data for the property. This data along
with the historic IP information available was reinterpreted during
the fourth quarter of 2022 and the results are being used to plan
future studies that will aim to identify major structures within
the basin to the north-east of CLG.
Drilling Results Tables
Table 1: South-East Deeps Drilling
Results
Drillhole |
|
From |
To |
DrillWidth |
EstimatedTrue Width |
Ag |
Zn |
Pb |
Au |
Cu2 |
|
|
m |
m |
m |
m |
g/t |
% |
% |
g/t |
% |
GA-SE-476 |
|
783.0 |
789.0 |
6.0 |
4.2 |
34 |
3.63 |
1.21 |
0.11 |
0.10 |
|
|
|
|
|
|
|
|
|
|
|
GA-SE-481 |
|
919.5 |
927.5 |
8.0 |
5.7 |
47 |
5.34 |
1.78 |
0.13 |
0.42 |
|
|
|
|
|
|
|
|
|
|
|
GA-SE-486 |
NSV |
|
|
GA-SE-487 |
|
667.2 |
681.4 |
14.2 |
11.3 |
118 |
2.52 |
1.91 |
0.43 |
0.12 |
including |
672.7 |
679.9 |
7.2 |
5.8 |
191 |
2.93 |
2.38 |
0.68 |
0.20 |
|
|
|
|
|
|
|
|
|
|
|
GA-SE-DV-488 |
|
779.0 |
781.0 |
2.0 |
1.6 |
131 |
0.83 |
4.35 |
0.20 |
0.12 |
|
|
|
|
|
|
|
|
|
|
|
GA-SE-498 |
|
825.0 |
828.0 |
3.0 |
2.0 |
771 |
0.67 |
0.15 |
0.04 |
0.16 |
and |
838.0 |
841.0 |
3.0 |
2.0 |
53 |
3.13 |
3.10 |
0.39 |
0.47 |
and |
860.0 |
867.5 |
7.5 |
5.0 |
43 |
3.69 |
2.62 |
0.05 |
0.70 |
including |
864.0 |
866.0 |
2.0 |
1.3 |
91 |
5.38 |
5.88 |
0.06 |
1.15 |
|
|
|
|
|
|
|
|
|
|
|
Table 2: Resource Definition Drilling
Results
Drillhole |
|
From |
To |
DrillWidth |
EstimatedTrue Width |
Ag |
Zn |
Pb |
Au |
Cu2 |
|
|
m |
m |
m |
m |
g/t |
% |
% |
g/t |
% |
GA-NW-480 |
|
409.5 |
411.0 |
1.5 |
1.5 |
93 |
5.56 |
6.10 |
0.25 |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
GA-CZ-482 |
NSV |
|
|
GA-CZ-483 |
|
508.0 |
512.0 |
4.0 |
3.2 |
52 |
9.52 |
2.84 |
0.26 |
0.58 |
|
|
|
|
|
|
|
|
|
|
GA-NW-DV-484-1A |
|
562.5 |
564.5 |
2.0 |
1.7 |
55 |
2.84 |
0.75 |
0.07 |
0.06 |
|
|
|
|
|
|
|
|
|
|
GA-CZ-485A |
|
551.0 |
556.0 |
5.0 |
4.5 |
88 |
9.99 |
4.35 |
0.52 |
0.07 |
|
|
|
|
|
|
|
|
|
|
GA-CZ-489 |
|
549.0 |
552.5 |
3.5 |
2.9 |
57 |
7.13 |
2.73 |
0.21 |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
GA-NW-490 |
|
421.0 |
425.0 |
4.0 |
3.8 |
30 |
2.84 |
1.25 |
0.07 |
0.10 |
and |
437.0 |
441.0 |
4.0 |
3.8 |
27 |
6.14 |
1.36 |
0.07 |
0.10 |
|
|
|
|
|
|
|
|
|
|
|
GA-NW-492 |
|
443.0 |
445.0 |
2.0 |
1.8 |
180 |
2.59 |
2.29 |
0.03 |
0.12 |
and |
524.1 |
526.1 |
2.0 |
1.0 |
26 |
5.60 |
1.28 |
0.11 |
0.09 |
|
|
|
|
|
|
|
|
|
|
|
GA-CZ-493 |
|
339.0 |
345.0 |
6.0 |
5.3 |
99 |
5.87 |
3.41 |
0.15 |
0.40 |
|
|
|
|
|
|
|
|
|
|
|
GA-CZ-495 |
|
318.0 |
321.5 |
3.5 |
3.1 |
113 |
2.69 |
1.45 |
0.29 |
0.51 |
|
|
|
|
|
|
|
|
|
|
|
GA-SE-499 |
|
598.0 |
609.5 |
11.5 |
9.6 |
90 |
1.74 |
2.65 |
0.14 |
0.29 |
including |
606.5 |
609.5 |
3.0 |
2.5 |
158 |
3.66 |
8.97 |
0.43 |
0.86 |
|
|
|
|
|
|
|
|
|
|
|
GA-CZ-502 |
|
436.0 |
439.6 |
3.6 |
3.1 |
205 |
3.71 |
1.80 |
0.34 |
0.18 |
|
|
|
|
|
|
|
|
|
|
|
GA-SE-503 |
|
680.0 |
682.0 |
2.0 |
1.4 |
190 |
4.22 |
7.55 |
0.61 |
0.32 |
|
|
|
|
|
|
|
|
|
|
|
Table 3: Drillhole
Locations
Drillhole |
Target |
Easting |
Northing |
Elevation |
Azimuth |
Dip |
Hole Depth |
GA-CZ-482 |
Resource |
368,944 |
3,047,653 |
1,622 |
212 |
-65 |
550 |
GA-CZ-483 |
Resource |
368,865 |
3,047,690 |
1,622 |
209 |
-63 |
535 |
GA-CZ-485A |
Resource |
368,842 |
3,047,813 |
1,629 |
208 |
-52 |
572 |
GA-CZ-489 |
Resource |
368,867 |
3,047,774 |
1,629 |
210 |
-67 |
583 |
GA-CZ-493 |
Resource |
369,169 |
3,047,382 |
1,572 |
212 |
-62 |
360 |
GA-CZ-495 |
Resource |
369,170 |
3,047,325 |
1,571 |
213 |
-63 |
332 |
GA-CZ-502 |
Resource |
368,968 |
3,047,596 |
1,608 |
214 |
-66 |
463 |
GA-NW-480 |
Resource |
368,413 |
3,047,878 |
1,591 |
215 |
-56 |
603 |
GA-NW-490 |
Resource |
368,484 |
3,047,823 |
1,590 |
215 |
-53 |
579 |
GA-NW-492 |
Resource |
368,442 |
3,047,864 |
1,590 |
212 |
-50 |
564 |
GA-NW-DV-484-1A |
Resource |
368,413 |
3,047,878 |
1,591 |
215 |
-56 |
584 |
GA-SE-476 |
Resource |
369,517 |
3,047,555 |
1,615 |
203 |
-67 |
819 |
GA-SE-499 |
Resource |
369,516 |
3,047,555 |
1,615 |
215 |
-47 |
635 |
GA-SE-503 |
Resource |
369,581 |
3,047,577 |
1,604 |
214 |
-45 |
704 |
GA-SE-481 |
South-East Deeps |
370,084 |
3,047,286 |
1,574 |
222 |
-61 |
992 |
GA-SE-486 |
South-East Deeps |
369,337 |
3,047,829 |
1,619 |
222 |
-62 |
824 |
GA-SE-487 |
South-East Deeps |
369,516 |
3,047,555 |
1,615 |
214 |
-54 |
704 |
GA-SE-498 |
South-East Deeps |
369,492 |
3,047,711 |
1,615 |
213 |
-64 |
879 |
GA-SE-DV-488 |
South-East Deeps |
369,337 |
3,047,829 |
1,619 |
221 |
-63 |
870 |
|
|
|
|
|
|
|
|
Corporate Update
On January 23, 2022, the Toronto Stock Exchange
approved the Company’s request to extend the timeline to file its
annual financial statements for the year ending December 31, 2021,
as well as its interim financial statements for the periods March
31, 2022, June 30, 2022, and September 30, 2022, to March 31,
2023.
The foregoing is consistent with the Company’s
previous disclosure that it expects all delayed filings, including
the audit of the financial statements required to be included in
its annual report on Form 10-K for the year ended December 31,
2021, and the reviews of its quarterly reports on Forms 10-Q for
the quarters ended March 31, 2022, June 30, 2022 and September 30,
2022, to be completed before the end of the first quarter of 2023.
The Company expects to hold its annual shareholders’ meeting once
such public reports have been filed.
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 103,087 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 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. 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 Limited 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.
Qualification Regarding Exploration and
Drilling Results
Any statements herein regarding ranges of
potential tonnage and grade or quality of any exploration target
are conceptual in nature; except as specified in the Los Gatos
Technical Report there has been insufficient exploration of the
relevant properties to estimate a mineral resource; it is uncertain
whether further exploration will result in the estimation of a
mineral resource; any exploration target therefore does not
represent, and should not be construed to be, an estimate of a
mineral resource or mineral reserve (mineral resource and mineral
reserve estimates are stated exclusively in the Los Gatos Technical
Report).
Forward-Looking Statements
This press release contains statements that
constitute “forward looking information” and “forward-looking
statements” within the meaning of U.S. and Canadian securities
laws. All statements other than statements of historical facts
contained in this press release, including statements regarding
mine life extension potential, resource conversion and expansion,
prospects for potential development, new high priority zones, and
economic potential of drilling results. Forward-looking statements
are based on management’s beliefs and assumptions and on
information currently available to management. Such statements are
subject to risks and uncertainties, and actual results may differ
materially from those expressed or implied in the forward-looking
statements, and such other risks and uncertainties described in our
filings with the U.S. Securities and Exchange Commission and
Canadian securities commissions. Gatos Silver expressly disclaims
any obligation or undertaking to update the forward-looking
statements contained in this press release to reflect any change in
its expectations or any change in events, conditions, or
circumstances on which such statements are based unless required to
do so by applicable law. No assurance can be given that such future
results will be achieved. Forward-looking statements speak only as
of the date of this press release.
Investors and Media Contact
Tiffany OsburnDirector, Financial Reporting and Corporate
Communicationsinvestors@gatossilver.com(720) 726-9662
1 The “Los Gatos Technical Report” means the
Technical Report titled “Mineral Resource and Reserve Update, Los
Gatos Joint Venture, Chihuahua, Mexico,” prepared by Golder
Associates, dated November 10, 2022 with an effective date of
July 1, 2022, which was prepared in accordance with the
requirements of NI 43-101 and the SEC Mining Modernization Rules.2
Copper recovered in the process plant currently reports to the lead
concentrate in quantities that are not payable. CLG is preparing
metallurgical test work to analyze the economics of the potential
installation of a copper separation circuit.
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