The Clayton Silver Mine has a multi-decade history of production. Although a substantial amount of high grade ore was mined from the property until operations were suspended in 1986, the project has significant untapped potential:
The Company will commence work programs this year and extending over the next several years to assess the resource potential within the structures related to the previously mined sections and to expand the search to determine the potential for other mineralized zones in adjacent structures. This will entail detailed geophysical work and multiple drill programs. The Issuer has concluded that very little geophysics was done on the property historically and, as well, exploration drilling was limited.
The Company plans to commence the first program during the second half of 2022 with geophysical work to pinpoint drill locations for immediate follow-up drilling within the known mineralized systems identified and referred to as the South and North Ore Bodies in the old mine workings.
Mine Stockpile Exploitation Potential
In May 2022, the Company signed an agreement with Sulphide Remediation Inc. (“SRI”) (https://www.sulphide-remediation.com/), an affiliate of ABH Engineering Inc. of Surrey, B.C., a firm specializing in mineral processing (https://www.abhengineeringinc.com/). SRI utilizes precision ore sorting technology to high-grade mine stockpiles of unprocessed rock to enhance the grade of material delivered to a toll mill. Dual Energy X-Ray Transmission technologies differentiate between rocks based on small fluctuations in density profiles and are effective at removing sulphides and concentrating valuable metals. The sorted rock can be treated at existing mills/smelters where valuable metals will be extracted and sulphides will be safely handled. SRI has some of the world's leading experts in crushing, screening and ore sorting. Pursuant to the agreement with the Company, SRI has taken samples from the Clayton stockpile with no upfront cost to the Company. The samples have been shipped to a laboratory in Sydney, Australia for analysis and process testing. The testing program will inform SRI as to the best ore sorting process for the Company’s stockpile.
Results pending from testing the ore sorting process on the Clayton stockpile material are expected to confirm suitability of the material for the ore sorting process. With positive results, SRI will at its cost construct and deliver an optimal ore sorting system to the Clayton Mine site. The system will be capable of processing from 3,000 tonnes to 4,000 tonnes per day. SRI will manage all aspects of the stockpile processing program. After deducting operating expenses from the revenue received for the processed stockpile material from the toll mill or smelter, the net profits will be shared 50:50 between the Company and SRI. The goal is to generate cash flow for the Company in 2023.
An assessment of the potential of the mine stockpile was undertaken in 2014/15. Representatives of the Company collected samples from 16 locations on the stockpile situated immediately adjacent to the old Clayton Mine workings and extending to the south. An aggregate of over 3,000 kilograms of sample material was collected. Test locations were selected to ensure representative samples. The Company's management was on site during sampling to ensure random sample selection.
Results from analysis of the mine stockpile samples confirmed the presence of a suite of metals. Panning of material from the stockpile has confirmed the presence of free, relatively coarse gold, while analysis of the samples documents the presence of gold in each sample. In particular, assays confirmed gold values up to 2.84 gm/t (Sample 11369) with a simple average of 0.80 gm/t for the 16 locations comprising the suite of samples.
Statistical averages of the 16 locations of the mine stockpile sampling program:
. Au – 0.80 gms/t
. Ag – 24.31 gms/t
· Pb – 0.44%
· Zn – 0.27%
CLAYTON SILVER PROJECT
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