*Gold converted to silver at a 75:1 ratio **Gold converted to silver at a 55:1 ratio ***Gold converted to silver at a 65:1 ratio ****Gold converted to silver at a 50:1 ratio
Production Costs - Cash costs per oz. silver in H1 2011 were negative US$ (4.97) and US$ ($2.14) in 2010 after deducting gold credits.During the transition period of 2007 to Q2 2008, costs rose to $20.00+ per oz. but have declined sharply since then. The goal is to continue to reduce cash costs.
Reserves & Resources (As of Dec. 31, 2010)
Reserves Proven & Probable
Description
Tonnes
Ag g/t
Au g/t
Ag oz
Au oz
Proven
141,000
189
2.50
856,000
11,300
Probable
100,000
158
2.20
508,000
7,100
Total Proven & Probable
241000
176
2.37
1,364,000
18,400
Resources Indicated
Description
Tonnes
Ag g/t
Au g/t
Ag oz
Au oz
Total Indicated
1,443,000
163
2.18
7,554,000
101,100
Resources Inferred
Description
Tonnes
Ag g/t
Au g/t
Ag oz
Au oz
Total Inferred
1,475,000
155
2.11
7,345,000
100,000
Notes:
2. Reserves cutoff at Guanajuato is 102 g/t Ag
3. Mining mining width is 1.5 meters
4. Dilution is 15% after it has been diluted to a minimum mining width if required
5. Resources cutoff for the Guanajuato and Guanacevi projects is 100 Ag eq
6. Resources Silver equivalent is 50:1 for Silver to Gold
7. Reserve Silver equivalent is 62:1 for Silver to Gold which is the three year trailing average ratio as required in reserve estimation
Grade - Silver grade is 185 grams/tonne and gold is 2.44 grams/tonne which equates to 10+ oz. per ton silver equivalents. Historic grades were reported to be 300+ grams/tonne silver plus 3.0+
grams/tonne gold.
Width - Widths range from 1 - 30 metres wide and average 2 -- 3 metres.
Infrastructure - Approximately 5 kilometers from the city of Guanajuato with good road access, power and water plus trained work force on site.
Land Package - 2,372 hectares (5,861 Acres)
Silver was originally discovered by Spanish explorers at La Luz in 1548, and subsequently at Guanajuato in 1552. Guanajuato is considered to be one of the top three historic silver mining districts in Mexico, having produced an estimated 1 to 1.2 billion oz silver and 5 to 6 million oz gold. At their peak during the 1700's, the silver mines of Guanajuato and La Luz were thought to be the largest and richest silver mines in the world.
Industrias Penoles SA de CV ("Penoles"), one of Mexico's largest industrial and mining conglomerates, developed the Bolanitos and Las Torres mines and plants in the La Luz and Guanajuato districts respectively in the 1970's.
When the price of silver bottomed after 2000, Penoles leased many of its smaller silver mining operations to local mining companies.
The Veta Madre and La Luz veins are classic, low sulfidation epithermal vein systems. Mineralization consists of disseminations and fracture-fillings of pyrite, pyrargygrite, polybasite and electrum in quartz-calcite veins ranging from 1 to 30 metres thick but averaging 2 to 3 m wide. Multiple historic ore zones (now stopes) formed steep-plunging shoots 100 to 500 m long that were mined down to depths of 200 to 600 m. More than 30 shafts were driven historically into the two vein systems on the Bolanitos and Cebada properties, of which five are still active.
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