The Technical Report was prepared in accordance with National Instrument 43-101 ("N.I. 43101") Standards of Disclosure for Mineral Projects by
- 6.2 million ounces ("Moz") silver classified as inferred ("inf") at Peñasco Quemado with an average grade of 168.6 grams per tonne ("g/t") silver.
- Conservative base-case estimate uses 85 g/t silver cut-off grade.
- Relatively low strip ratio of 2.25:1 for Peñasco Quemado resource.
- Future resource growth potential remains at Peñasco Quemado.
"We're thrilled to have filed an updated 43-101 Technical Report for our Peñasco
Peñasco Quemado Project Mineral Resource Estimate.
The 2023 MRE objective was to upgrade the historic Peñasco Quemado resource estimate to current standards under the
In addition to its defined silver resources at PQ mineralized zone, a separate pit was generated for the PQ South zone; however, this does not meet the requirement for being potentially economic, as it generated a negative net present value. Thus, a pit-constrained mineral resource could only be reported for the PQ mineralized zone. This leaves Lodestar with a significant opportunity to expand and build upon the established resources at the Peñasco Quemado property: Further drilling in and around this area may be able to enlarge the existing PQ mineral resource, and this would assist in potentially bridging the gap between the two detached mineralized zones and increasing the resource potential beyond the extent of the current pit shell.
Micon's QPs have conducted an independent review of the exploration potential of the Peñasco
Pitshell | Resource Category | Zone | Stripping | Tonnage (Mt) | Average | Metal Content | |
Ratio | Ag (g/t) | Ag (Million oz) | |||||
Inpit | Inferred | PQ | 2.25 | 1.1 | 168.6 | 6.2 | |
Notes:
- The effective date for the Peñasco
Quemado Project mineral resource estimate isMarch 21, 2023 . - The mineral resources are reported based on open-pit mining method scenarios.
- The pit was constrained based on a bench slope of 30° for the overlying alluvium and 45° for the remaining lithologies.
- The mineralized wireframes (PQ zone) within which the resources are contained were modelled on a cut-off silver grade of 25 g/t.
- Grade capping was applied to reduce the influence of outlier samples, and a cap of 460 g/t silver was applied for the PQ zone.
- The economic parameters used to define mineral resources are a metal price of
USD25 per troy ounce of silver, a mining cost ofUSD2 /t, a processing cost ofUSD40 /t and a G&A cost ofUSD5 /t, for a total ofUSD47 /t mined and processed. The silver recovery was estimated at 69%. - The resource is estimated for silver only, as manganese is not recoverable into a salable product for Peñasco
Quemado Project . - The entire mineral resource has been categorized in the Inferred category.
- The mineral resources presented here were estimated using the
Canadian Institute of Mining , Metallurgy and Petroleum (CIM), Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by theCIM Standing Committee on Reserve Definitions and adopted byCIM Council onMay 10, 2014 . - 0. Mineral resources which are not mineral reserves do not have demonstrated economic viability. Therefore, the QP believes that, at this time, the mineral resource estimate is not materially affected by environmental, permitting, legal, title, socio-political, marketing, or other relevant issues. However, as the Peñasco
Quemado Project advances, further required studies in these areas or other socio-political factors may affect the resource estimate. - 1. The mineral resource estimate has been prepared without reference to surface rights or the potential presence of overlying infrastructure.
- Figures may not total due to rounding.
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Figure 1: 3D Perspective of the Peñasco Quemado Project Drill Hole Locations and the Two Mineralized Envelopes
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Figure 2: 3D Perspective of the PQ Mineralized Zone
Data Validation
The 2023 MRE considered drilling information up to and including the most recently completed program in 2019, as well as geological information from previous work programs completed at the property. A total of 138 drill holes have been completed on the property. Drilling data supporting the 2023 MRE includes information from historic drilling data from 97 holes, a total of 1548 samples for 1,956m at PQ main zone, and 57 samples for 84.5 m at the PQ south zone contribute to the MRE. Nominal drill hole spacing is approximately 50 x 100 m within the inferred portions of the 2023 MRE. Verification of drilling exploration data used for the 2023 MRE was performed by
Sensitivity Analysis
Micon's QPs have performed a resource sensitivity analysis for the PQ zone, based on a silver price range from
Pitshell | Cut-off Grade | Stripping | Resource | Tonnage (Mt) | Average Grade | Metal Content | |
USD/oz | Ag (g/t) | Ratio | Ag (g/t) | Ag (Million oz) | |||
Inpit | 15 | 141 | 2.96 | Inferred | 0.6 | 217.6 | 4 |
20 | 106 | 2.35 | 0.9 | 189.2 | 5.2 | ||
25* | 85 | 2.25 | 1.1 | 168.6 | 6.2 | ||
30 | 71 | 2.07 | 1.3 | 155.3 | 6.7 |
*Peñasco Quemado 2023 base case Mineral Resource Estimate.
The updates made to the resource calculations can be attributed to several key factors. Firstly, an updated block model was implemented to replace the original polygonal method, which was deemed less accurate. Secondly, the reclassification of the resources was largely due to the historical nature of the drilling, necessitating a re-evaluation of the data. Finally, changes in the CIM Standards and Definitions since the previous mineral resource estimate was disclosed also significantly influenced the updated calculations.
Cut-Off Grade and Reasonable Prospects for Eventual Economic Extraction
The base-case COG (85 g/t silver) was determined using the following assumptions:
- Silver price of
US$25.0 per troy ounce; - Processing costs of
US$40 per short ton; - General and administrative costs of
US$5 per short ton; - Mining costs of
US$2.0 per short ton; and - Silver recovery of 69%
Metal recoveries are based on preliminary results from the 2012 Metallurgical Test Program completed by Silvermex and is consistent with recoveries for comparative operations. Silver price was calculated by averaging the price from the last 12 months up to
About the Peñasco Quemado Property
The Peñasco
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Figure 5 Location and claims outline of the Peñasco Quemado property
The Peñasco Quemado property is extensively covered by a cap of alluvium and valley fill which varies from 0 to 40 m thick. The alluvium and fill overlie the Pit (Volcaniclastic) Conglomerate (formerly named the Red Conglomerate) and the Upper conglomerate, which is up to 200 m thick, as evidenced by drill hole intersections. The Pit (Volcaniclastic) Conglomerate is in a high-angle fault contact with a volcanic sequence that includes andesite tuffs, andesite breccia and andesite flows. The entire upper lithological column unconformably overlying a basement of gneissic granite. Between the two units, there exists a complex unit that has been described by the geologists of Silvermex/
Qualified Person
The scientific and technical data contained in this news release was reviewed and approved by
The mineral resource estimate was produced in conformance with the
This news release has also been reviewed and approved by
Update to Lodestar Leadership
Effective immediately,
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Forward-Looking Statements
The information set forth in this news release contains forward-looking statements that are based on assumptions as of the date of this news release. These statements reflect management's current estimates, beliefs, intentions, and expectations. They are not guarantees of future performance. Lodestar cautions that all forward-looking statements are inherently uncertain, and that actual performance may be affected by a number of material factors, many of which are beyond Lodestar's control. Such factors include, among other things: risks and uncertainties relating to Lodestar's limited operating history and the need to comply with environmental and governmental regulations. Accordingly, actual and future events, conditions and results may differ materially from the estimates.
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