Less than a fortnight after completing its acquisition, Mitre Mining Corporation (ASX: MMC) has unveiled a major resource increase at the Cerro Bayo silver-gold project in southern Chile.
A review of existing drilling data has enabled Mitre to report a doubling of the Cerro Bayo resource to 50.2 million ounces at 311 grams per tonne silver-equivalent.
The review included a significant re-sample/re-logging campaign at the Delia vein and also utilised existing underground drive mapping and assay data.
Maiden drilling program underway
Mitre’s positive news on the resource front comes at the same time as it commences its maiden drilling program at Cerro Bayo targeting a further significant resource update in the second half of 2024.
“This is an outstanding start to our growth strategy at Cerro Bayo. It reflects the quality and value of the acquisition and the huge scope for ongoing increases in the inventory,” interim executive director Ray Shorrocks said.
“The underground grades are exceptional and the mineralisation remains open […] the more data we review, the more prospectivity we see.”
“With drilling now underway, we expect to generate a steady stream of assays as we look to extend the known boundaries of the mineralisation and continue creating value through resource growth.”
“Increases in the resource will be particularly valuable for Mitre shareholders given the processing plant and other infrastructure right next door.”
He added that the company is fortunate to have an onsite laboratory so assay turnaround times are approximately 48 hours.
Testing targets
Mitre’s focused drilling campaign is initially testing high priority brownfields targets within a 3km radius of the project’s processing plant.
First targets include Pegaso 7, Cristal and extensions of the known high-grade resources at Taitao, Coyita and Delia.
Pegaso 7 was drilled between 2005-2016 and Cristal was partially exploited by Coeur Mining mainly pre-2000, the latter during a period of substantially lower precious metals prices.
Mitre is also targeting the Cristal veins where historic slot cut mining was conducted (less than 10m deep) and underground adits exist.
The Cristal system comprises four known veins that extend on surface over 900m trending north-east to north-north-east.
Notably, a distinct broader gold rich halo zone has been identified in historic exploration around the Cristal system and Mitre is hoping this zone could potentially support a future bulk tonnage open pit target.
Drilling will also focus on resource extension drilling at the Coyita to Delia Sth areas of the Taitao resource.
Acquisition complete
In late February, Mitre wrapped up the Cerro Bayo acquisition initially announced on 1 December 2023 after completing all the conditions precedent.
The historic project is located in the Aysen region in Southern Chile and was in production for over 15 years, producing more than 45Moz of silver and 650,000oz of gold.
While the project has been on care and maintenance since October 2022, Mitre is confident Cerro Bayo’s existing joint ore reserves committee (2012)-inferred mineral resource estimate of 3.8 million tonnes at a grade of 206g/t silver equivalent for 24.7Moz contained can transform the company into a significant silver-gold exploration company.