Southern Silver options Nazas project, Mexico

Southern Silver Exploration Corp. [TSXV: SSV; OTCQX: SSVFF] entered into a letter agreement with La Cuesta International SA de CV to acquire the Nazas exploration project in Durango, Mexico.

The letter agreement provides Southern Silver the option to earn a 100% interest in the Nazas project by making preproduction cash payments totalling US$130,000 over three years with a preproduction payment of US$25,000 payable every six months thereafter; and completing a minimum aggregate 8,000 metres of drilling on the project over four years.

The company will also pay US$25,000 in reimbursement of concession rights taxes. The project is subject to a net smelter return royalty of 2% on the current claims, a 1% net smelter return on any new claims acquired within an area of influence and a 0.5% net smelter return on any third party owned lands acquired within the area of influence. The net smelter return royalty will be reduced by half upon cumulative preproduction payments and net smelter return royalty payments totalling US$10 million.

The Nazas silver-gold-lead-zinc property comprises five claims totalling 2,189 hectares and is located on the eastern flank of the Sierra Madre Occidental Mountain range in north-central Durango state, Mexico. The Nazas property is accessible by road from the city of Durango, located approximately 160 km to the south.

The property sits within the heart of Mexico’s Faja de Plata (belt of silver) and is located just 15 km east of Endeavor Silver’s Pitarilla deposit, one of the largest unexploited silver resources in Mexico. The property features similar host stratigraphy and mineralizing systems to Pitarilla with a high potential to host significant epithermal vein, porphyry and replacement-styled mineral deposits.

Modern exploration of the Nazas project started in the mid-1990s by the vendor which staked it and adjacent ground, including the Pitarilla property, on behalf of Silver Standard Resources Inc. (now SSR Mining Inc.). SSR Mining sold the Pitarilla project to Endeavor Silver in January 2022, and ceased exploration operations in Mexico, returning the Nazas property to the vendors.

The property was extensively explored from the early 2000s through to the mid-2010s resulting in a comprehensive database that includes: Property-wide geological mapping; several thousand rock and soil samples collected; channel sampling; property-wide clay alteration studies; magnetic, induced polarization, gravimetric and magnetotelluric geophysical surveys over select target areas; and results from 18 drill holes totalling 4,070 metres (12 reverse circulation and six diamond drill holes).

Seven different targets are identified on the property, which will be the focus of future exploration on the property.

Multiple epithermal vein occurrences occur throughout the property and are characterized by fine quartz stockworks localized along crosscutting northwest-southeast- and northeast-southwest-trending structures often enveloped within broad gold-enriched halos, up to 60 metres wide, of oxidized hematite-goethite-bearing rock.

Drilling by Silver Standard at the Yerbabuena and Santa Rita targets returned strongly anomalous gold-silver mineralization (greater than 0.1 g/t gold and greater than one g/t silver) over tens of metres in multiple drill holes. Mineralization remains open both laterally and at depth for further testing.

Deeper stratigraphy and associated base-metal-enriched mineralization are exposed at the Yescas prospect, reflecting the potential for both porphyry and replacement-styled mineralization. Three quartz-feldspar intrusive phases have been identified on the property and are similar to those associated with the Pitarilla deposit.

Coming work on the Nazas project will focus on validation of the historic surface and drill data and further compilation and interpretation of what is a substantive database toward establishing drill targets for testing in third quarter 2025.

Southern Silver has entered a consulting agreement whereby La Cuesta International will provide technical advisory services with respect to the Nazas project, as well as the company’s other Mexican projects. Southern Silver will issue 100,000 common shares in the capital of the company in consideration of such services. The consulting agreement is subject to TSX Venture Exchange acceptance.

Southern Silver’s emphasis is the 100%-owned Cerro Las Minitas silver-lead-zinc project located in Mexico’s Faja de Plata.

Its property portfolio also includes the Oro porphyry copper-gold project and the Hermanas gold-silver vein project, where permitting applications for conducting a drill program are under way, both located in southern New Mexico, United States.