Vancouver, BC – 25 June, 2018 – Aftermath Silver Ltd. (AAG.H – NEX) (“Aftermath” or the “Company”) is pleased to announce it has entered into a definitive agreement (the “Agreement”) with Apogee Opportunities Inc. (“Apogee”) to purchase their holding in the Cachinal De La Sierra Silver-Gold Project (“Cachinal” or the “Project”) through the purchase of Apogee’s shares in the Chilean holding company Minera Cachinal S.A., representing 80% ownership.
Cachinal, is a low sulphidation epithermal deposit which currently hosts 18.4M Indicated and 3M Inferred ounces of Silver. Shallow drilling has defined the current mineral resources principally to a depth of 150 m below surface and provides sufficient evidence to interpret the presence of high grade shoots within the vein system extending below the potential base of an open pit. This will be the focus of the Company’s efforts to significantly expand the silver-gold mineralisation. Cachinal is the only asset held by Minera Cachinal S.A.
Material Terms of the Acquisition
The Company will pay Apogee $1,500,000 cash and assume certain debts for its 80% interest in Minera Cachinal. The remaining 20% is held by SSR Mining, formerly Silver Standard Resources.
The closing of the Acquisition is subject to a number of conditions precedent which are normal for transactions such as this, including necessary shareholder approvals to the Acquisition, and exchange approvals.
Overview of the Cachinal Silver-Gold Project
The 2018 Mineral Resource Estimate, Cachinal Ag-Au Deposit (see notes below for details)
|Resource Classification||Quantity (Mt)||Grade||Contained Metal|
|Silver (g/t)||Gold (g/t)||Zinc (%)||Silver (Moz)||Gold (Koz)||Zinc (Mlbs)|
The Cachinal Silver-Gold Project is located in Chile’s Antofagasta Region (Region II), 175 km southeast of Antofagasta. The project is located about 40 km east of the Pan American Highway, in a nearly flat plain at an elevation of around 2,700 m above sea level. The project includes 16 claim blocks for a total area of 4,867 hectares, in two non-contiguous areas. The Mineral Resource is located within one claim block, located centrally on the northern of the two claim groups.
Cachinal is located within the Paleocene Precious Metal Belt, to the west of, and parallel to the prolific northern Chilean porphyry copper belt. Cachinal lies about 16 km north of Austral Gold’s El Guanaco mine. Other Paleocene Belt significant low and high sulphidation epithermal gold-silver and silver-gold deposits include Yamana’s El Peňón mines, and former producers San Cristobal and Vaquillas mines.
Silver was first produced in the district in 1875; production continued uninterrupted until 1930. Since then independent miners intermittently mined the area when silver prices were relatively high between 1985 and 1987, and again in the early 1990’s. Extensive historic workings at Cachinal reportedly extend to a depth of 320 m, although most of the workings only went to a depth of 120 – 150 m, generally within the oxidized zone.
Silver-gold-zinc mineralization at Cachinal occurs in a cluster of sub-parallel, low-sulphidation epithermal quartz veins and brecciated quartz veins. Veins form as open space fracture and fault fillings. They range in thickness from a few centimetres to two metres, reaching up to twenty metres locally at the intersection of two structures. The main veins trend north-northwest and north-west with a secondary set trending east-northeast to east-west, best developed at the southern end of the deposit. The Mineral Resource estimate (see the Table above) includes a total of eleven veins.
The oxidation level bottoms at about 120 – 150 m below surface; however, the down dip extent of the mineralized structures remains unknown.
Between 2005 and 2007 the then owners, Valencia Ventures completed the following:
- 219 inclined reverse circulation boreholes for over 31,000 m
- 27 diamond core boreholes, for over 6,000 m
- 43 trenches, 2076 linear metres;
- 129 line kilometers of ground electromagnetic surveys (VLF-EM)
- 955 line kilometers for ground magnetic surveys
- 1,109 soil geochemical samples (200 – 400 m lines and 50–100 stations)
- Five metallurgical composites for metallurgical test work
Subsequent to 2007 and the Mineral Resource estimate, Valencia Ventures completed the following, deemed by the independent qualified persons (“QPs”) as not material to the Mineral Resource:
- Infill drilling including seventeen diamond core and forty three reverse circulation holes
- Five geotechnical core boreholes for open pit slope stability assessment
Details of the Mineral Resource Estimate Technical Report
In conjunction with the acquisition of Cachinal, the Company commissioned SRK Consulting (Canada) Inc. to update the National Instrument 43-101 Technical Report on the project, which restates and makes current the 2008 Mineral Resource Estimate for Cachinal. The 2018 Technical Report will be made available on SEDAR (www.SEDAR.com) along with other filling documents.
Notes on Mineral Resource Estimate:
- The Mineral Resource update has been prepared by independent qualified persons Glen Cole P.Geo and Jean-Francois Couture P.Geo, of SRK Consultants (Canada) Ltd, and has an effective date of April 30, 2008, readdressed June 2018.
- Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. All figures have been rounded to reflect the relative accuracy of the estimates.
- Cachinal mineral resources were classified according to the CIM Definition Standards for Mineral Resources and Mineral Reserves (December 2005)
- The Silver equivalent (AgEq) grades are calculated using a gold to silver ratio of 50:1, using metal price assumptions of US$12.50 per ounce of silver, US$650 per ounce of gold and metallurgical recoveries of eighty-five percent for silver and gold. Zinc does not contribute to revenues.
- Open Pit shell constrained Mineral Resources are reported at a cut-off of 40 g/t AgEq to a vertical depth of 150 m below surface.
- Underground constrained Mineral Resources are reported at a cut-off of 150 g/t AgEq below a depth of 150 m.
- Based on drilling and other technical data as of January 25, 2008.
- QA-QC details can be found in the Technical Report, which will be filed on SEDAR within 45 days.
A finder’s fee in favour of Elysium Mining Ltd, is payable upon completion of the transaction. The finder’s fee is subject to TSX Venture Exchange rules and limitation ranges and will be paid in cash and shares for a total value of $107,000.
The Company also announces an equity financing of not less than C$5 million (the “Financing”) to fund transaction costs of the Acquisition, exploration expenditures on the Project and working capital. The terms of the Financing will be determined in the context of the market and will be announced at a later date. Completion of the Financing is subject to acceptance by the TSX Venture Exchange.
Return to Tier 2 Venture Exchange Listing
Upon receiving all necessary approvals for the Acquisition and private placement the Company will make application to graduate to a Tier 2 TSX Venture Exchange listing.
Resignation and Appointment of President and Chief Executive Officer
The Company would also like to announce the resignation of Douglas Ramshaw as President and CEO, Mr. Ramshaw will continue as a Director of the Company until a replacement has been found. Sean Hurd, a Director of the Company, has been appointed President and CEO.
Mr. Hurd, President and CEO commented “Cachinal is the first step towards relaunching the Company with a focus of growth through the discovery and acquisition of quality projects in stable jurisdictions. The low acquisition cost per ounce is a function of the relatively low silver price at present and the company will be well positioned to take advantage of an appreciation in the price of silver. We look forward to fully developing Cachinal’s geological potential at depth potential and will continue to seek out advanced projects.”
Glen Cole, P.Geo., Principal Resources Geologist at SRK Consulting (Canada) Inc. (“SRK”), an independent Qualified Person as defined by NI 43-101, has approved the scientific and technical disclosure in this news release.
ON BEHALF OF THE BOARD OF DIRECTORS
Forward Looking Statements
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
Certain statements within this news release, other than statements of historical fact relating to Aftermath Silver, are to be considered forward-looking statements with respect to the Company’s intentions for the Cachinal Project in Chile. Forward-looking statements include statements that are predictive in nature, are reliant on future events or conditions, or include words such as “expects”, “potential”, “anticipates”, “plans”, “believes”, “considers”, “significant”, “intends”, “targets”, “estimates”, “seeks”, attempts”, “assumes”, and other similar expressions.
The forward-looking statements are based on a number of assumptions which, while considered reasonable by Aftermath Silver Ltd, are, by their nature, subject to inherent risks and uncertainties and are not guarantees of future performance. Factors that could cause actual results to differ materially from those in forward-looking statements include: the interpretation of previous and current results, the accuracy of exploration results, the accuracy of Mineral Resource Estimates, the anticipated results of future exploration, the forgoing ability to finance further exploration, delays in the completion of exploration, the future prices of silver and gold, and other metals, and general economic, market and/or business conditions. There can be no assurances that such statements and assumptions will prove accurate and, therefore, readers of this news release are advised to rely on their own evaluation of the information contained within. In addition to the assumptions herein, these assumptions include the assumptions described in Aftermath Silver Ltd’s Management’s Discussion and Analysis for the three months ended August 31st, 2017.
Although Aftermath Silver Ltd. has attempted to identify important risks, uncertainties and other factors that could cause actual performance, achievements, actions, events, results or conditions to differ materially from those expressed in or implied by the forward-looking statements, there may be other risks, uncertainties and other factors that cause future performance to differ from what is anticipated, estimated or intended. Unless otherwise indicated, forward-looking statements contained herein are as of the date hereof and Aftermath Silver Ltd. does not assume any obligation to update any forward-looking statements after the date on which such statements were made, except as required by applicable law.