Silver One raising $5.0 million for Nevada exploration

Silver One Resources Inc. [SVE-TSXV, SLVRF-OTC, BRK1-FSE] has arranged to raise $5.0 million from a non-brokered private financing comprised of 17.8 million units priced at 28 cents each.

Under the terms of the offering, each unit will consist of one common share and one-half of one common share purchase warrant, each of which will entitle the holder to purchase one common share at an exercise price of 40 cents, for three years from the date of issue.

On Tuesday, Silver One shares eased 1.6% or $0.005 to 30.5 cents. The shares trade in a 52-week range of 42 cents and 16.5 cents.

Silver One’s key asset is a 100% interest in the past-producing Candelaria silver mine project in Nevada, which it acquired from SSR Mining Inc. [SSRM-TSX, NASDAQ, SSR-ASX]. In a recent press release, the company said work at the Candelaria project is on schedule, continuing with metallurgical investigations to optimize silver and gold recoveries. A preliminary economic assessment study (PEA) is scheduled to be completed by the end of this year.

The Candelaria Mining District, located in west central Nevada, is historically the richest silver mining region in the Silver State and is estimated to have produced 22 million ounces of the precious metal between the late 1880s and 1954.

Candelaria was a former producer with Kinross Gold Corp. (K-TSX, KGC-NYSE) operating the open-pit mine up until 1997. Historically it produced over 60 million ounces of silver. Operations were shut down due to a major drop in the price of silver to under US$5.00 an ounce. The project was later sold to SSR Mining.

A technical report prepared for Silver Standard Resources Inc. (now SSR Mining Inc.), when it was preparing to buy the mine from Kinross in 2001, estimated that the Candelaria property contains a measured and indicated resource of 44.1 million ounces of silver. On top of that is an inferred resource of 82.3 million ounces.

According to the report, the Candelaria resource includes the remaining down-dip mineral resources for both the Mount Diablo and Northern Belle deposits, as well as remaining resources in two leach pads and two low grade stockpiles.

However, at the time of the report, there were no estimated mineable reserves at the Candelaria project.

The company has said potential reprocessing of silver from the historic leach pads at Candelaria provides an opportunity for possible near-term production. It said additional opportunities lie in unmined historic resources as well as in previously identified high-grade silver intercepts down-dip, which can potentially increase the substantive silver mineralization along strike from the two past producing open pits.

Financier Eric Sprott owns 37.8 million shares of Silver One, representing 14.1% of the outstanding shares on a non-diluted basis.

Silver One recently commissioned a ground geophysical survey on its Pheonix silver project in Arizona.