Southern Silver Will Acquire 100% of High-Grade Silver Project

Southern Silver Exploration reported that it has executed an agreement with Electrum Global Holdings L.P. to purchase Electrum’s 60 percent indirect working interest in the Cerro Las Minitas Project in Durango. The US$15 million deal will increase Southern Silver’s working interest in the project from 40 percent to 100 percent.

Southern Silver noted that it has the option to pay all cash in lieu of shares. To secure payments, “it has agreed to pledge to Electrum the shares representing Electrum’s 60 percent indirect working interest in the Cerro Las Minitas project. Through the transaction, Southern Silver will acquire an additional 49.9 million oz of silver and 1.35 billion lb of combined lead and zinc to its account based on the current NI 43-101 estimate of the Cerro Las Minitas project. Additionally, Southern Silver explained that its market profile will be enhanced by having ownership of “one of the larger and highest-grade undeveloped silver projects in the world.”

“Upon completion of the transaction the benefits to Southern Silvers shareholders and investors will be significant. Sole ownership of the project inclusive of the significant resources developed to date allows us great latitude in developing the project for substantial resource growth. The transaction will also provide a 150 percent increase in attributable resources which will be highly accretive to Southern Silver shareholders,” said Lawrence Page, Southern Silver’s Chairman and Director.

As described by Southern Silver’s Vice President of Exploration Robert McDonald in an interview with Mexico Business News, “the Cerro Las Minitas project is the flagship project of Southern Silver Exploration. It is a large skarn-type deposit sitting in the heart of Durango’s Silver Belt in north-central Mexico. We acquired it in late 2010 and started exploring in early 2011. During the nine years we have been working on the property, we have identified four main deposits with a total resource of over 23.9 million tones: an indicated resource of 134 million oz of silver equivalent and an inferred resource of 138 million oz silver equivalent. The total contained metals are about 85 million oz of silver and 2.2 billion lb of combined lead and zinc.”

“Southern Silver believes that through further exploration, we can increase the current mineral resource from 272 million silver equivalent oz to up to 350 million silver equivalent oz and in that way increase the total value of the project. Through engineering and metallurgical test work, we will further de-risk the project and provide the opportunity to not only increase the value of the project but also increase the value that we get for every ounce that we have in the resource. This is part of an overall strategy to continue building value within the company,” said McDonald.