Pinnacle reports high-grade gold-silver on surface and underground at El Potrero Project, Mexico

Pinnacle Silver and Gold Corp. [TSXV: PINN, OTC: NRGOF, FSE: P9J] reported that systematic sampling of the historic underground workings at the Pinos Cuates Mine on the El Potrero property in Durango, Mexico has resulted in the definition of a lens of high-grade gold and silver mineralization, with individual samples returning up to 37.3 g/t gold and 346 g/t silver.

Highlights: Systematic channel sampling of the underground workings at the historic Pinos Cuates Mine has returned composite channel assays of up to 19.4 g/t Au and 266 g/t Ag over 4.1 metres, including 37.3 g/t Au and 346 g/t Ag over 0.6 metres and 31.2 g/t Au and 395 g/t Ag over 0.5 metres.

Underground mapping in the Pinos Cuates mine is outlining a wide, robust vein breccia system with exposed vein widths locally exceeding 10.46 metres and 8.5 metres on the upper and lower levels, respectively.  Ultimate widths are not yet known as the outer contacts were not always exposed and will have to be determined by future diamond drilling.

Surface mapping has traced the Dos de Mayo vein system for 1.6 km along strike. Sampling of outcrop exposures was highlighted by a vein in an old pit between the Pinos Cuates and Dos de Mayo Mines, where there are no underground workings, that returned 13.2 g/t gold and 2,280 g/t silver and 5.2 g/t Au and 745 g/t Ag from grab samples.  Visible gold and the more typical ‘ginguro’ mineralization were observed.

Of the two levels in the mine, the upper level returned the highest grades and most consistent mineralization.  T he entire 40-metre length of the upper level adit is variably mineralized, with three composite channels over a strike length of 6 metres returning 19.4 g/t Au and 266 g/t Ag over 4.1 m etres, 13.15 g/t Au and 78 g/t Ag over 1.0 metre, and 11.4 g/t Au and 131 g/t Ag over 2.5 metres.

This high-grade mineralization is ‘shouldered’ along strike to the northwest and southeast by 4.7 g/t Au and 80 g/t Ag over 4.0 metres and 3.9 g/t Au and 51 g/t Ag over 1.0 metre, respectively.  Additional composite channels to the southeast yielded 7.8 g/t Au and 220 g/t Ag over 1.3 metres and 5.0 g/t Au and 272 g/t Ag over 2.0 metres. It should be noted that channel sampling of the full width of the vein exposure was locally restricted by accessibility.

Sampling on the lower level was highlighted by 3.3 g/t Au and 36 g/t Ag over 4.0 metres down-dip of the high-grade section on the upper level and 7.13 g/t Au and 130 g/t Ag over 0.5 metres along strike to the southeast.

Concurrent with the underground program, surface mapping and prospecting along the main Dos de Mayo vein system, resulted in the discovery of an old pit with vein material containing visible gold and ginguro (grey-black bands of electrum and silver sulphides) that assayed 13.2 g/t Au and 2,280 g/t Ag and 5.2 g/t Au and 745 g/t Ag in two grab samples. Follow up trenching and channel sampling will be conducted here.

Situated roughly halfway between the Pinos Cuates and Dos de Mayo mines, this discovery underscores the potential to connect the mineralization between the historic workings (200 metres).

“We are extremely pleased that we are seeing consistent high-grade gold-silver mineralization this early in the sampling program,” stated Robert Archer, Pinnacle’s President & CEO. “Furthermore, the discovery of high-grade gold and silver at surface between the historic mines exemplifies the potential to expand the mineralized zones beyond the historic mines. Mapping of the underground workings and surface exposures has been accompanying the sampling such that we are also getting a better understanding of the geological controls on the mineralization. The occurrence of high-grade pockets of mineralization is consistent with low-sulphidation epithermal vein deposits, where the highest grades tend to occur in ‘clavos’ or ‘shoots’. These results are an important first step towards defining targets for a drill program later in the year.”

Underground Program: Of the three historic mines on the Potrero Property, the Pinos Cuates mine lies roughly halfway between the larger Dos de Mayo mine to the southeast and the Dura mine to the and consists of two levels, approximately 25 metres apart, with a raise connecting the two.

The lower level of the Pinos Cuates mine has a measured length of 96.78 metres with an exposed true vein width ranging from 2.46 to 8.50 metres at its widest point.  The vein is actually exposed for only about 45 metres of this length and the remainder follows a felsic porphyry dike. The Upper Level has a measured length of 40.35 metres with an exposed true vein width ranging from 1.42 to 10.46 metres at its widest point. On both levels the width of the vein could be wider as the outer contacts with the wall rock are not always exposed.

On the upper level of the mine, a total of 94 channel samples were taken in 16 composite channels along the length of the adit.  On the lower level, 79 samples were taken, forming 16 composite channels over the full length of the level.

On the upper level, gold and silver mineralization extends from one end of the adit to the other (40.35 metres. Future drilling will provide a better sense of the widths of the vein and the continuity of gold-silver mineralization within it.

On the lower level, gold and silver assays were highlighted by 7.13 g/t Au and 130 g/t Ag over 0.5 metres and 3.3 g/t Au and 36 g/t Ag over 4.0 metres , while almost all samples were gold and silver bearing to some degree. This latter channel is down-dip from the high grades in the upper level, suggesting that they are probably connected. However, diamond drilling and/or mine development would be needed to confirm this.

Surface mapping has now extended the vein system along strike to the northwest and southeast for approximately 1,600 metres.  Samples were taken from any veins that were found, with a total of 85 being assayed to date. This was highlighted by the discovery of an old pit with vein material containing visible gold and ginguro that returned assays of 13.2 g/t Au and 2,280 g/t Ag and 5.2 g/t Au and 745 g/t Ag in two grab samples.

To the southwest of the Pinos Cuates mine, two other veins, La Estrella and El Capulín, have been mapped and sampled on surface and in small underground workings. Seven samples have been taken at El Capulín and assays are pending.

At La Estrella, approximately 500 metres southwest of Pinos Cuates, the vein has been mapped on surface over a strike length of 100 metres and varies from 0.95 to 6.0 metres in width. Seven samples were taken, of which 4 were inside a 40 metre adit and 3 on the surface.  Vein material returned assays of 0.151 to 1.180 g/t Au and 16 to 40 g/t Ag.

Access roads to the project and up to the mine portals have been cleared, the plant has been completely cleaned up, and an inspection has been scheduled for mid-June to assess the approximate cost and schedule to get it ready for production again.

The Potrero Project lies within the Topia District of the Sierra Madre gold-silver belt. The Dos de Mayo low-sulphidation epithermal gold-silver system demonstrates a strong northwest-southeast strike that parallels the regional trend of the Sierra Madre and is on strike with the 4,000 tonne per day Ciénega Mine, 35 km southeast.

Geological mapping on surface and underground has identified a quartz-feldspar-biotite porphyry dike along one or both contacts of the vein.

El Potrero is located in the prolific Sierra Madre Occidental of western Mexico and lies within 35 km of four operating mines, including the 4,000 tonnes per day (tpd) Ciénega Mine (Fresnillo), the 1,000 tpd Tahuehueto Mine (Luca Mining) and the 250 tpd Topia Mine (Guanajuato Silver).

A 100 tpd plant on site can be refurbished/rebuilt and historic underground mine workings rehabilitated at relatively low cost in order to achieve near-term production once permits are in place. The property is road accessible with a power line within 3 km. Surface rights covering the plant and mine area are privately owned (no community issues).

Pinnacle will earn an initial 50% interest upon commencing production. The goal would then be to generate sufficient cash flow with which to further develop the project and increase the company’s ownership to 100% subject to a 2% NSR.