GR Silver Mining (GRSL) - High-Grade Silver Gold in Mexico

GR Silver Mining Ltd. is a junior exploration and development company focused on the advancement of its Mexican assets. The Plomosas project of the company consists of the Plomosas and San Marcial properties. The Plomosas property is an 8,515-hectare land package consisting of various mining concessions with numerous drilled areas as well as the past-producing Grupo México S.A de C.V. underground mine. The San Marcial property of the company is a 1,250-hectare project, located 98 km southeast of the city of Mazatlan. The property has a current NI 43-101 compliant mineral resource estimate of 36 million ounces of silver equivalent (AgEq) in the indicated category and 11 million ounces of AgEq in the inferred category.

Interview with Eric Zaunscherb, CEO & Chair of GR Silver Mining (TSX-V: GRSL)

Company Overview

GR Silver Mining Ltd. is currently underway with two underground exploration drilling programs at both its Plomosas and San Marcial properties. The company announced in early April of 2022 that it has been able to extend the underground high-grade silver mineralisation at its San Marcial property. The assay results of three underground drill holes at the property have shown highlights such as the interception of 0.4 m of mineralisation at a grade of 1,213 g/t of silver, within a 7.4 m interval of 201 g/t silver.

The company also published results from its infill drilling program conducted at the Plomosas property in May 2022. The results of the infill drilling program have shown highlights such as the interception of 6.5 m of mineralisation at a grade of 1,458 g/t silver which includes an interval of 0.9 m at a grade of 3,266 g/t silver. 

The company plans to publish an updated mineral resource for both properties by the end of the first quarter (Q1) of 2023.

Projects

The asset portfolio of GR Silver Mining Ltd. consists of the Plomosas, San Marcia and La Trinidad projects in the Rosario Mining District in Mexico.  The Plomosas project of the company is an 8,515-hectare land position in the Rosario Mining District, Sinaloa. The project’s mineralisation is similar to that of the San Dimas mining district, which has historically produced 11 million ounces of gold and 600 million ounces of silver along the western edge of the Sierra Madre Occidental.

The Plomosas project includes the past-producing Plomosas mine, which hosts silver, gold, zinc and lead. The Plomosas mine has a record of historical drilling at both the surface of the mine as well as underground, with the data having the potential to be used for resource definition and future exploration of the project.

The Plomosas mine lies within 5 km of the company’s San Marcial project, and together create a 9,764-hectare land position, which covers most of the silver, gold, lead and zinc mineralized zones in the eastern section of the Rosario Mining District.

The San Marcial project of the company is a 1,250-hectare land package, located 98 km southeast of the city of Mazatlan in the state of Sinaloa. The project has shown silver and high-grade gold mineralisation in the past, with it possessing a NI 43-101 mineral resource estimate (MRE). The MRE of the project was completed in June 2020 and contains 36 million ounces of silver equivalent in the indicated category and 11 million ounces of silver equivalent in the inferred category. The project’s mineralisation is open along strike as well as down-dip and has the potential for future expansion.

The company acquired the La Trinidad project in April 2021, through the acquisition of Marlin Gold Mining Ltd., which owned 100% of Oro Gold de Mexico, S.A. de C.V a Mexican company, that owned the La Trinidad gold mine and 12 highly prospective concessions located adjacent to GR Silver’s portfolio of properties and possessing a land position of 107,392.5 hectares. The La Trinidad project is located 90 km South-East of the city of Mazatlan and is accessible through paved roads as well as a gravel road section. The project was owned and operated by a subsidiary of Eldorado Gold Corp. between 1996 and 1998, and hosts infrastructure such as a high voltage power line, offices, shops, 80-man camp, infirmary, warehouses, foundations for a processing plant, leach pads and various other infrastructure which may serve useful in the future for further development.

The company further owns 73,400-hectares of land which consists of various other projects of the company, which the company believes have the potential to provide for strategic alliances and new business opportunities in the future.

Mining in Mexico

The Mexican government announced in May of 2022, that it would be implementing a ban on any new open-pit mines in Mexico. The announcement has caused concern for the international investment community, regarding the investability of the Mexican Mining sector. The Environmental Ministry of Mexico, SEMARNAT, announced that it pledged to block any new open-pit mining operations in the country in an attempt to protect communities and ecosystems from environmental damage.

The announcement only adds to the already challenging mining environment with the President of Mexico, Manuel López Obrador, imposing a freeze on the issue of new mining concessions in February 2022. The challenging mining environment has seen various mining companies experience a drop in their share price. Eric Zaunscherb, the CEO and Chair of the Board of GR Silver Mining Ltd. states that even through the recent challenges of the Mexican mining environment, the share price of GR Silver Mining Ltd. has remained constant, he states:

“I would say that actually, our stock has gone up relative to the other Mexican stocks with the peer group…flat is good. In this case, it is and part of the reason is that we have money, we're moving forward, we have a good story to tell them, and we have an obvious re-rating to come.”

The company is positive with regards to its future in the Mexican mining space, due to its operations being envisioned as underground operations, and as such will not be impacted by the new ban imposed by SEMARNAT. Zaunscherb explains:

“…we are an underground exploration programme in two places, two underground exploration programmes on the same project and so that insulates us from any concerns about open-pit. It's a brownfield site, it was mined at Plomosas from 1986 to 2000 and so, you've got infrastructure there, you've got power lines, you've got people. And from that perspective, we're in a good place and so we feel comfortable.”

Private placement offering and finances

Gr Silver Mining Ltd announced at the end of March 2022, that it had concluded with a best-efforts private placement offering. The private placement offering consisted of the issuing of 27,236,755 special warrants of the company at a price of USD$ 0.27 per Special Warrant for the aggregate gross proceeds of approximately USD$ 7,35 million.  

The issued special warrants are automatically exercisable into one unit of the company, which consists of one common share of the company and one-half of one common share purchase warrant. The purchase warrants will be exercisable for 36 months after the date of issue at a price of USD$ 0.37 per share.

The company further announced in the middle of April 2022, that it had negotiated debt settlement with arm’s length creditors. The settlement entails the settlement of aggregate debt of USD$ 33,542.87, through the issue of 136,910 common shares at a deemed price of $0.245 per share. The issued common shares will have a hold period of four months and a day from the date of issuance.

Drilling program

GR Silver Mining Ltd. plans to conduct additional exploration drilling at both the San Marcial and Plomosas project. Zaunscherb explains the company’s intent to implement its raised funds as follows:

“…we're looking at roughly 4000 m at the San Marcial, 4500 m at Plomosas, that's by the end of this year. And then we'd have the two resource updates. And so the two resource updates are going to then drive the next step. So one logical step would be an integrated PEA looking at both operations together, they're 5 km apart. The mineralogy is a bit different but metallurgy is slightly different but we need to look at that.”

The company published assay results from the 2021 underground exploration drilling program that it had conducted at the San Marcial project at the start of April 2022. The 2021 underground exploration drilling confirmed the presence of wide and high-grade mineralisation at the project, which the company believes warrants additional exploration at the project in 2022. The highlights of the drill results include a mineralisation intercept of 0.4 m at a grade of 1,413 g/t of silver within a 7.4 m intercept at a grade of 201 g/t silver as well as a 1.1 m intercept of mineralisation at a grade of 5.32 g/t of gold.

GR Silver Mining also published at the end of April 2022 the results of its exploration drilling initiatives at its Plomosas project in Sinaloa State, Mexico. The phase 1 drilling program has shown wide, high-grade predominantly silver-rich mineralisation in the upper levels, up to 160 m below the surface, of the historical Plomosas Mine. The highlights of the phase 1 drill program include a mineralisation intercept of 24.2 m at 1,094 g/t silver including 0.6 m at 7,178 g/t. The drilling was carried out such that the drill holes were closely spaced, with an average length of 50 to 100 m in between drill holes.

The exploration drilling at the Plomosas project has also shown the presence of a polymetallic Breccia mineralisation system, with the possibility existing for more Breccias to be found. The company also published further results from its exploration drilling at the Plomosas project, with highlights including 6.5 m at 1,458 g/t silver, which includes 0.9 m at 3,118 g/t of silver.

Asset portfolio plans

GR Silver Mining Ltd. is underway with a surface and underground exploration drilling program at the San Marcial Project, with three drill rigs currently on site. The 2022 exploration drilling program is aimed at identifying additional mineralisation extensions to the South-East of the current NI 43-101 mineral resource estimate.

The company further plans to publish an updated mineral resource estimate of both the San Marcial as well as the Plomosas projects by  Q1 2023. The updated mineral resource estimates will be implemented towards the creation of either two respective preliminary economic assessments (PEAs), or due to the close proximity of both projects one PEA. 

To find out more, go to the GR Silver Mining website