VANCOUVER, April 29, 2014 /PRNewswire/ - Sierra Metals Inc. (TSX:SMT)(BVL:SMT) ("Sierra Metals" or the "Company") is pleased to announce that development is proceeding in the thick Azucarera stockwork breccia at the Promontorio Mine of the Cusi Property. Access to Azucarera on Level 8 from the ramp is complete and development on Level 10A is complete with cross cuts. Development ore from both levels is being shipped to the Company's Malpaso Mill.
Drilling of the El Gallo vein system, located 150 meters northwest of Azucarera, is returning high grades of silver over significant widths.
Press Release Highlights:
"The development of the Azucarera body is a major step forward in the growth of production from the Promontorio Mine and is an example of the type of large, high-grade silver orebodies that can be found on the Cusi property", stated Daniel Tellechea, President & CEO of Sierra Metals. "We are developing multiple working faces in this mine, not only at Azucarera but also at El Gallo and El Gallo Back veins. The large volume of silver-mineralized rock in Azucarera will have a major impact on our mill throughput over the next few months and we are already seeing this effect in the increased silver head-grade being processed at the Malpaso Mill."
The Azucarera body is a silver-mineralized stockwork breccia zone formed at the intersection of the NW-dipping Promontorio Main Vein A with the SE-dipping Alphabet Veins (A, B, K, J, etc.). The zone is characterized by multiple, crisscrossing quartz veins, veinlets and stringers hosted in the Cusi Rhyodacite, which range in width from 0.5 mm to 30 cm. The rhyodacite in the Azucarera body between the stockwork veins is intensely silicified and contains fine-grained, disseminated pyrite and argentite. Layers of argentite and traces of galena are common along selvages of the multiple quartz veins. Figure 1 is a perspective view of the Azucarera body.
The Company's geologists have extensively sampled the body along drifts and crosscuts to determine its extent and grade, the results of which are shown in Table 1:
Table 1: Sampling Results from Various Levels of the Azucarera Body, Promontorio Mine
|Au g/t||Ag g/t||Pb %||Mn %||# of Samples|| Area
Drill results demonstrate that the Azucarera body extends to elevation 1810 meters and its extent to depth is unknown. Because the intersections of the Alphabet Veins with the main Promontorio Vein (Vein A) create Azucarera, the fact that the K vein is projected to intersect Vein A at 1,680 meters elevation indicates that this high-grade body could extend at least 200 meters below Level 7. In addition, the El Gallo veins are projected to intersect Vein A at an even greater depth, potentially resulting in an even greater vertical extent to the Azucarera body.
Azucarera will not be mined above Level 7 in order to maintain stability of the surface above the body.
The areal extents of the body on levels below Level 10A cannot be determined from drill intercepts and their extents will be determined once each lower level is accessed and developed.
El Gallo Vein System
These NE-trending veins, El Gallo, El Gallo Back and Alto del Gallo, are parallel to the Promontorio Main Vein (A) and the Alphabet Veins (Figure 2). El Gallo Back vein is a splay from El Gallo vein while Alto del Gallo is a parallel vein. They are about 150 meters northwest of the Main Vein and dip steeply to the southeast, similar to the Alphabet Veins. Like them, they are inferred to intersect the Main Vein and form a stockwork breccia similar to Azucarera but at a much greater depth. This possible relationship will be tested by drilling once underground workings are in a suitable position for a drill station sited for holes to penetrate this possible stockwork zone.
The Company has been drilling the El Gallo Veins from an underground drill station on Level 6. As a result, the drill holes cut several veins before intersecting El Gallo and El Gallo Back. Table 2 shows the results from two of the underground holes.
Table 2: Drill Intersections from Underground Drill Holes
|Hole #*||To-From, m|| Core
| Est. True
|Au g/t||Ag g/t||Pb %||Mn %||Vein Name|
|and||85.3-90.2||4.9||4.5||0.05||104||0.04||0.37||Alto del Gallo|
|M204||83.95-84.75||0.8||0.7||0.05||181||0.09||0.21||Alto del Gallo|
|* All holes have prefix DC14; M = underground hole|
The Company is developing El Gallo Vein with drifts along it on Level 6. The total drift length is 79 meters and development rock is shipped to Malpaso Mill for processing. The NE development drift had an average grade of 182 g/t silver and the SW development drift averaged 106 g/t. The southwest drift has encountered the San Nicolas structure and drifting has stopped in that direction.
The Company plans to develop these veins by constructing a ramp to Level 9 and drifting across the several Alphabet Veins and the Gallo veins to Gallo Back vein then stoping the veins to Level 6. Access to Gallo Back vein on Level 9 is planned to be completed by the end of 2014.
The Cusi property has an historical production of 100-200 million ounces of silver between 1680 and 1940. Production was interrupted multiple times by Indian raids, wars, revolution, depression, etc. Historical operators needed grades of 1,000 g/t silver or more to be economic and many areas were left un-mined. There are multiple high-grade silver veins open to depth.
An updated NI 43-101 compliant resource by Gustavson Associates, LLC of Lakewood, Colorado, was recently completed (see press release dated March 27, 2014), which reported a 70% increase in silver ounces, a 40% increase in silver grade, and a 20% increase in tonnes in the Indicated category. Also, there was a 37% increase in silver ounces and a 66% increase in tonnes in the Inferred category.
The Company's objective for the Cusi property in 2014 is to advance underground development from five mines, the Santa Eduwiges, Promontorio, La Gloria, Minerva and Candelaria mines to allow mining and development both laterally and at depth. This will bring the total of producing mines at the Cusi project to five. Management believes that Cusi is only starting to reveal its full silver potential.
Method of Analysis
Samples were prepared at the Company's lab facility at its Malpaso lab and analyzed by atomic absorption for Cu, Zn, Pb, Bi, Co, Mn, Sb, Cd and Fe. Gold and silver are analyzed by fire assay method. The Malpaso laboratory follows the quality control methodology recommended by CANMET of Canada, such as assaying of blanks, duplicate samples, and check assays by commercial laboratories such as Chemex.
The technical content of this news release has been approved by Thomas L. Robyn, Ph.D., CPG, RPG, and a Qualified Person as defined in NI 43-101.
About Sierra Metals
Sierra Metals Inc. is a Canadian mining company focused on precious and base metals from its Yauricocha Mine in Peru, its Bolivar Mine and Cusi Mine in Mexico. In addition, Sierra Metals is exploring several precious and base metal targets in Peru and Mexico. Projects in Peru include Adrico (gold), Victoria (copper-silver) and Ipillo (polymetallic) at the Yauricocha Property in the province of Yauyos and the San Miguelito gold properties in Northern Peru. Projects in Mexico include Bacerac (silver) in the state of Sonora and La Verde (gold) at the Batopilas Property in the state of Chihuahua.
The Company's shares trade on the Bolsa de Valores de Lima and the Toronto Stock Exchange under the symbol "SMT".
Except for statements of historical fact contained herein, the information in this press release may constitute "forward-looking information" within the meaning of Canadian securities law. Other than statements of historical fact, all statements are "forward-looking statements", which involve various known and unknown risk and uncertainties and other factors, including market conditions that may affect the Company's ability to execute its current business plan. Actual results might differ materially from results suggested in any forward-looking statements. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements unless and until required by securities laws applicable to the Company. Additional information identifying risks and uncertainties is contained in filings by the Company with the Canadian securities regulators, which filings are available at www.sedar.com.
SOURCE Sierra Metals Inc.