Resource World Magazine

d e c e m b e r / j a n u a r y 2 0 1 6 www.resourceworld.com 49 SANTAcruZ SIlver expanding Mexican operations santacruz silver mining Ltd. [SCZ-TSXV; SZSMF-OTCQX], which owns and operates the Rosario silver-gold-zinc-lead mine in San Luis Potosi, Mexico, has signed a long term agreement with Minera Contracuña I SA de CV and Vetalinda Compania Minera SA de CV whereby Santacruz has the right to explore, mine and operate Contracuña's Veta Grande and Minillas silver-gold-zinc- lead properties in Zacatecas, central Mexico. The deal will provide Santacruz access to additional ore to feed the Rosario milling facility that will take advantage of unused capacity and realize immediate increased cash flow. The Rosario and Contracuña properties, about 180 km apart, will enable Santacruz to streamline operating and manage- ment functions. The 500-tonne-per-day (tpd) fully permitted Rosario mill will be upgraded, including the installation of two additional flotation cells and additional pipe systems to produce both lead and zinc concentrates (currently producing a single bulk concentrate). The Contracuña properties are known to host extensive vein systems averaging 4-4.5 metres in width with average head grades of 170 g/t silver, 1.5% lead, 2% zinc and 0.4 g/t gold including some min- eralized stockwork zones associated with the structures. Preliminary reconnaissance sampling by Santacruz over different areas of the Contracuna properties returned silver assays averaging 180 g/t plus signifi- cant lead, zinc and gold credits. The Contracuña Mine is a silver pro- ducer. The property includes 34 mining concessions encompassing 1,108.65 hectares and cover areas in groups of claims within the VGMD (Veta Grande Silver-gold Mining District), including seven mining claims cov- ering parts of the Veta Grande vein area. Under the agreement, there is an initial term of 15 years with an additional 15-year term extension at the company's option at the end of the original term. Santacruz has made an initial cash payment of US $200,000 with an additional payment of US $300,000 to be paid upon registra- tion of the agreement with the Deputy of Mines, expected in 2016. Santacruz will operate the properties on a 60:40 net profits interest basis (NPI); Santacruz 60% and Contracuña 40%. If the price of silver is over US $22/oz, the NPI changes to 55:45. Arturo Prestamo, President and CEO of Santacruz, said, "This agreement allows us to immediately leverage on the extra mill- ing capacity at our Rosario Mine which will help us realize economies of scale. We note that mineralization previously processed from the Contracuña proper- ties reacted favourably on a metallurgical basis." Prestamo added, "The agreement will allow us to operate the Contracuña mill at 500 tpd capacity after a nominal capital expenditure upgrade." Santacruz also has the advanced-stage Gavilanes Project with over 34 million oz silver equivalent indicated and inferred as well as the San Felipe Project which has a positive PEA. The company produced 231,332 silver equivalent payable ounces in Q3 2015. n fraser river gold panning champion Left, Yukon Dan, and Carole Borthwick, right, present Mark Boppre with an amethyst and mining scene trophy for winning the Iron Person 2015 Fraser River Gold Panning Championship. Mark recovered all nine flakes of gold in his pan in 13 minutes. The event was held at the Anderson Creek Campground near Boston Bar in the Fraser River canyon, southwest British Columbia. Resource World magazine was one of the sponsors. Photo submitted. mINING

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