GR Silver Mining Discovers New Silver Mineralization and 2021 Plans with CEO Marcio Fonseca
GR Silver Mining (TSXV: GRSL – OTC:GRSLF – FRA:GPE) recently discovered a new mineralized zone defined by drill results from the San Juan Area at its 100%-owned Plomosas silver project in Sinaloa, Mexico. GR Silver also recently reported 15,147 g/t silver concentrate grade after processing underground bulk sample from the San Juan area of the Plomosas Silver project. In this interview President and CEO Marcio Fonseca explains the significance of these recent advancements and shares how the company will proceed into 2021.
0:00 Introduction
0:32 New silver discovery and significance
2:59 Initial processing results
5:40 Upcoming resource and PEA
6:25 Current drill program
8:07 Fully-funded for 2021
Latest GR Silver Mining presentation
TRANSCRIPT:
Bill: Marcio, welcome back onto the program. Since we last spoke, there were two press releases. Let’s go over your first press release from November 23rd. This one delineates us some new mineralization. Tell us the story of how you found this mineralization and what’s the significance, please.
Marcio: Sure. Thank you. This new release is about the San Marcial project, where we have a 43-101 resource, 39 million ounces indicated and inferred. Most of the drill holes were shallow, and they didn’t really go through the whole footwall. As we completed the ground development, we were forced to build a road on the side of the resource, means outside of the resource area or the footwall. When we were excavating the road and cutting the rocks, we came across a lot of sulfide, disseminated sulfide, in an area that we thought would be waste. So, today we believe that we might have some mineralization there and open up a potential for more drilling and continue to increase resource at San Marcial.
Bill: So, would this be an example of the saying “luck favors the diligent” for you just discovering it as you’re building the road?
Marcio: Can be like that. Yeah, for sure.
Bill: And will this lead into a geological re-interpretation of what you already model here? Or is this just an expansion? Talk more about what this means for the model.
Marcio: It’s likely to lead into an additional model on top of the existing model on the resource area. Because just to recap, the resource model area is a breccia on the edge of two rocks, two volcanic rocks. And these results that we got in this news release are related just to the footwall rock, probably I would say 50 meters away from where the resource is, day-lighting on surface, so it shows that the system has potential to generate more ounces. That’s the importance.
Bill: And also, the previous producer would mine base metals. Did this lead you more into an interpretation that you could find predominantly more silver mineralization here in this system?
Marcio: Yeah, this San Marcial project has been more silver. We’ve had some discovers of gold as well with our drill holes. We had a drill hole in the past that was one meter, 200 grams per ton gold. And this project was sold to us as a lead-zinc property. And today we believe that it can be much more silver and potentially gold.
Bill: So, your next press release was December 7th. And this one dealt with bulk sample processing from the San Juan area. What did you do here? And what’s the significance for the project?
Marcio: Well, we took the opportunity to, while we were excavating a tunnel, continue the excavation to do underground develop of the expanded tunnel at the San Juan vein to extract 2,700 tons of mineralization in a polymetallic breach of silver and gold. And we realized that, why not take this bulk sample and ship that to the plant nearby, which is a plant that’s armed by a third party company. It’s a Mexican family. They are not operating the crush. I mean, the flotation cells are there, but not operating.
So, we entered into an agreement. We process the material there and pay them. And we are able to now understand that, although we have a polymetallic breccia, that means there’s lead and zinc, we can achieve a high grade concentrate, silver concentrate, just using flotation. Because their average grade of the material that we were mining ranged from 200 to 250, but we are able to have high recoveries and achieve a concentrate 27 tons with 15 kilos per ton of silver.
Bill: For non-technically trained retail investors that are listening, this means higher grade silver at lower costs. Would that be a good interpretation?
Marcio: Yes. And it’s a way to, at low cost, get data and move the product more into a development stage. This was one of the six veins. We still have the other five and we can replicate the same process to learn more and more about the ore. We don’t need to ship 2,700 tons to Canada. We can do the whole work in Mexico.
Bill: And can you incorporate this initial met work into an upcoming PEA?
Marcio: I think this is going to be two steps. The first step is, when you do the 43-101 for when we finish the 43-01 for Plomosas. That’s the Plomosas Super Project that has someone in the Plomosas mine area. We’ll need to have some assumptions about recoveries to define what’s a resource as per 43-101 guidelines. By that time, we have already some test work done in the San Juan. And we can use that. As we continue the work, as I said, we will continue to do the same work in both samples. We are likely to get more data. And this altogether, we are working for an external metallurgical engineer, reviewing this data. We are going to incorporate that in our combined PEA, altogether our two projects.
Bill: And when is the PEA? Just remind us, when should we expect that?
Marcio: It’s more likely end of the year 2021, beginning of the 2022. I think more important for general investors to understand that we are the first company to do a 43-101 resource with the Plomosas with all the drill holes that we are doing. You want to define a large inventory of ounces. It was a lead and zinc underground mine, but now we believe it’s a silver gold project. So, the idea is to increase the inventory of ounces and do a combined PEA. The project San Marcial that we have the 39 million ounces and it can expand, plus the Plomosas silver project and consolidate and show that this is a district, a silver gold district,
Bill: Toward do the increasing of those ounces, how is the current drill campaign going?
Marcio: That is going really well because we have five drill rigs at Plomosas, one underground and four on the surface, two at the Plomosas mine area and two at San Juan, we are drilling shallow holes, 150-200 meters long. A couple long holes, 500, expanding more the knowledge of the mineralization along the strike and checking some extensions of the zone that we discovered at the bottom of the Plomosas mine. So, it’s all about expansion. And so far, the rocks are looking very good. And most of the labs in Mexico are overloaded of samples. And that’s why there’s a lot of delay. But we are starting to get more and more samples and more results now.
Bill: And this is diamond drilling. Is that correct?
Marcio: Yes. More diamond drilling and all QA-QC in place.
Bill: And what is the cost per meter down in Mexico for you to drill?
Marcio: On average, it can be around $120 USD per metre, all included. Might be a bit lower because sometimes you have a shallow hole that can be more effective. And we can use local workers, as well, that can reduce the cost for the drilling company. So, we have two drilling companies working at onsite now. One on surface and one underground.
Bill: Just to recap for upcoming catalysts drill results, January, February, and hopefully a resource March? Would that be correct?
Marcio: You might have some drill results before Christmas, then you have the Christmas break. Early January, you have a couple of news releases. It might have some more metallurgical test work coming by end of January, mid-February. And the people want for sure that might be Q1 next year is the resource estimation 43-101 for the Plomosas.
Bill: And remind us again, the treasury, you’re fully funded for next year, right?
Marcio: Yes. Pretty much.
Bill: And warrant money, last time you mentioned that there’s a lot of warrants in the money. Has any of that come in?
Marcio: All the warrants that were in the money and due now in December, they were exercised. And I’ve seen some other options, people that have options and exercises, as well, because most of them were averaging 30 cents and they start today 65.
Bill: And Marcio, before you go, anything else investors should know for Q1 next year that we should be looking for?
Marcio: The company has been very diligent to operate at a low cost from day one and all the acquisitions were at low costs. The company has no debt, no big payments that will jeopardize the business. And we are very advanced in discussions about the acquisition of the Trinidad concession as well, between the San Marcial and Plomosas.
