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Pulacayo (Silver-Zinc-Lead)

    Related Documents

    pdf Pulacayo Project Technical Report November 14, 2017 (pdf)
    pdf Pulacayo PUG (underground) detailed interval drill database (xls)
    pdf Pulacayo PUD (surface) detailed interval drill database (xls)
    pdf Pulacayo Drill Results (pdf)
    pdf Pulacayo Drill Maps and Cross Sections
    pdf Pulacayo Concentrate Assays 2013 Pilot Mining (1, 2, 3, 4)
    pdf Pulacayo Central Shaft Inspection Report (pdf)
    rar Pulacayo underground workings and Paca topo maps (dwg)
    pdf Tailing Metallurgical Report


    pdf Paca detailed interval drill database (xls)
    pdf Paca Drill Results (pdf)
    pdf Paca Open Pit Drill Maps and Cross Sections

    Overview

    The Project is located in Bolivia, 107 km northeast of Sumitomo Corporation’s San Cristobal silver mine, 185 km southwest of Coeur Mining, Inc.’s San Bartolome silver mine, and 139 km north of Pan American Silver Corp.’s San Vicente silver mine.

    In November 2017, Prophecy received an independent technical report with an effective date of October 20, 2017 titled “Updated Mineral Resource Estimate and Technical Report for the Pulacayo Project” (the “Report”). The Report was prepared by Mercator Geological Services Limited (“Mercator”) on the Company’s Pulacayo project (the “Project”) and has been filed under the Company’s profile on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com.

    The Report describes resources estimated following the guidelines of the CIM Definition Standards for Mineral Resources and Mineral Reserves.

    Two mineral resource estimates were disclosed according to the requirements of National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) – one for the Pulacayo deposit and the second for the Paca deposit.

    Pulacayo Deposit

    Results of the mineral resource estimate prepared by Mercator for the Pulacayo deposit are presented below in Table 1. The Report filed on SEDAR documents the resource estimate.

    The Report outlined 2.08 million tonnes at a weighted average grade of Ag 455 g/t, Pb 2.18%, Zn 3.19% (Ag Eq. 594 g/t) in the indicated category and 0.48 million tonnes at a weighted average grade of Ag 406 g/t, Pb 2.08%, Zn 3.93% (Ag Eq. 572 g/t) in the inferred category. The contained metal content estimated by the Company, of the indicated category resources is 30.4 million ounces of silver, 100.0 million pounds of lead, 146.3 million pounds of zinc. The contained metal content estimated by the Company, of the inferred category resource is 6.3 million ounces of silver, 22.0 million pounds of lead, and 41.6 million pounds of zinc (more resource details in the table below).

    Table 1. Pulacayo Indicated and Inferred Mineral Resource Statement Details

    Pulacayo Mineral Resource Statement – Effective October 20, 2017
    Ag Eq. Cut-Off (g/t) Category Tonnes* Ag (g/t) Pb (%) Zn (%) Ag Eq. (g/t)
    400 Indicated 2,080,000 455 2.18 3.19 594
    Inferred 480,000 406 2.08 3.93 572


    Notes:
    (1) Mineral resources are estimated in conformance with the CIM Standards referenced in NI 43-101.
    (2) Raw silver assays were capped at 1,700 g/t, raw lead assays were capped at 15% and raw zinc assays were capped at 15%.
    (3) Silver equivalent Ag Eq. (g/t) = Ag (g/t)*89.2% + (Pb% *(US$0.94/ lb. Pb /14.583 Troy oz./lb./US$16.50 per Troy oz. Ag)*10,000*91.9%) + (Zn% *(US$1.00/lb. Zn/14.583 Troy oz./lb./US$16.50 per Troy oz. Ag)*10,000*82.9%).
    (4) Metal prices used in the silver equivalent calculation are US$16.50/Troy oz. Ag, US$0.94/lb Pb and US$1.00/lb. Zn. Metal recoveries used in the silver equivalent equation reflect historic metallurgical results disclosed by Apogee Silver Ltd. (Porter et al., 2013).
    (5) Metal grades were interpolated within wire-framed, three-dimensional silver domain solids using Geovia-Surpac Ver. 6.6.1 software and inverse distance squared interpolation methods. Block size is 10m(X) by 10m(Z) by 2m(Y). Historic mine void space was removed from the model prior to reporting of resources.
    (6) Block density factors reflect three-dimensional modeling of drill core density determinations.
    (7) Mineral resources are considered to have reasonable expectation for economic development using underground mining methods based on the deposit history, resource amount and metal grades, current metal pricing and comparison to broadly comparable deposits elsewhere.
    (8) Rounding of figures may result in apparent differences between tonnes, grade and contained ounces.
    (9) Mineral resources that are not mineral reserves do not have demonstrated economic viability.
    (10) * Tonnes are rounded to nearest 10,000.

    The contained metals estimated by the Company based on in the October 20, 2017 resource estimate by Mercator are presented in Table 2.

    Table 2: Contained Metals Based on October 20, 2017 Pulacayo Deposit** Mineral Resource Estimate

    Metal Indicated Resource Inferred Resource
    Silver 30.4 million oz. 6.3 million oz.
    Lead 100.0 million lbs. 22.0 million lbs.
    Zinc 146.3 million lbs. 41.6 million lbs.

    **Based on the resource estimate Ag Eq. cut-off value of 400 g/t and 100% recovery; figures are rounded to the nearest 100,000th increment

    Between 2006 and 2012, a total of 69,739 metres of diamond drilling (226 surface and 42 underground drill holes) was conducted at Pulacayo, results of which support the mineral resource estimate reported in this news release. The Pulacayo site is currently permitted for production at a milling rate of 560 tonnes per day and no known legal, political, environmental, or other risks that would materially affect potential future development have been identified by Prophecy at the effective date of the current (October 20, 2017) mineral resource estimate.

    Approximately 85% of the resource tonnage identified at the 400 g/t Ag Eq. cut-off value occurs within 150 meters vertical distance from the main San Leon tunnel, which may facilitate future mineral extraction.

    Historic Pulacayo production was predominantly from the Tajo vein system which extends over a strike length of more than 2.5 km and to a depth of at least 1,000 meters. Prior resource drilling only covered approximately 20% of the Tajo vein system strike length. With new drilling, Prophecy feels that there is potential to discover additional resources along the Tajo structure.

    The Company’s research has shown that relatively few silver underground deposits have been defined at resource cut-off values of 400 g/t Ag Eq. or more.

    Paca Deposit

    The Paca deposit is located in Bolivia approximately 7 km north of the Pulacayo deposit.

    Results of the mineral resource estimate prepared by Mercator for the Paca deposit are presented below in Table 3. The Report described previously and filed on SEDAR documents the resource estimate.

    The Report outlined 2.54 million tonnes at a weighted average grade of Ag 256 g/t, Pb 1.03%, Zn 1.10% (Ag Eq. 342 g/t) in the inferred category. The contained metal content estimated by the Company, of the inferred category resources is 20.9 million ounces of silver, 57.7 million pounds of lead, 61.6 million pounds of zinc. (more resource details in the table below).

    Table 3. Paca Inferred Mineral Resource Statement Details

    Paca Mineral Resource Statement – Effective October 20, 2017
    Ag Eq. Cut-Off (g/t) Category Tonnes* Ag (g/t) Pb (%) Zn (%) Ag Eq. (g/t)
    200 Inferred 2,540,000 256 1.03 1.10 342


    Notes:
    (1) Mineral resources are estimated in conformance with the CIM Standards referenced in NI 43-101.
    (2) Raw silver assays were capped at 1,050 g/t, raw lead assays were capped at 5% and raw zinc assays were capped at 5%.
    (3) Silver equivalent Ag Eq. (g/t) = Ag (g/t) + (Pb% *(US$0.94/ lb. Pb /14.583 Troy oz./lb./US$16.50 per Troy oz. Ag)*10,000) + (Zn% *(US$1.00/lb. Zn/14.583 Troy oz./lb./US$16.50 per Troy oz. Ag)*10,000). 100 % metal recoveries are assumed based on lack of comprehensive metallurgical results.
    (4) Metal prices used in the silver equivalent calculation are US$16.50/Troy oz. Ag, US$0.94/lb Pb and US$1.00/lb Zn and reflect those used for the Pulacayo deposit mineral resource estimate reported above.
    (5) Metal grades were interpolated within wire-framed, three-dimensional solids using Geovia-Surpac Ver. 6.7 software and inverse distance squared interpolation methods. Block size is 5m (X) by 5m (Z) by 2.5m (Y). Historic mine void space was removed from the model prior to reporting resources.
    (6) A block density factor of 2.26g/cm³ was used and reflects the average of 799 density measurements.
    (7) Mineral resources are considered to have reasonable expectation for economic development using combined underground and open pit methods based on the deposit history, resource amount and metal grades, current metal pricing and comparison to broadly comparable deposits elsewhere.
    (8) Mineral resources that are not mineral reserves do not have demonstrated economic viability.
    (9) *Tonnes are rounded to nearest 10,000.

    The contained metals estimated by the Company based on the October 20, 2017 resource estimate by Mercator are presented in Table 4.

    Table 4. Contained Metals Based On October 20, 2017 Paca Deposit** Mineral Resource Estimate

    Metal Inferred Resource
    Silver 20.9 million oz.
    Lead 57.7 million lbs.
    Zinc 61.6 million lbs.

    **Based on the resource estimate Ag Eq. cut-off value of 200 g/t and 100% recovery; figures are rounded to the nearest 100,000th increment

    The resource estimate is based on results of 97 diamond drill holes and 1 reverse circulation drill hole totaling 18,160 meters completed between 2002 and 2007.

    The geology of the Paca deposit includes a core zone of feeder-style mineralization associated predominantly with brecciated andesite, plus additional zones of shallowly dipping mantos-style mineralization that are hosted by the surrounding volcano-sedimentary sequence. The Paca deposit remains open at depth and along strike.

    The Paca mineralization starts from surface and the deposit may be amenable to open-pit mining and this will be evaluated further in the future.

    The Company’s research has shown that relatively few silver open pit deposits have been defined at resource cut-off values of 200 g/t Ag Eq. or more.

    Project update

    The Company’s Bolivian subsidiary, ASC Bolivia LDC Sucursal Bolivia, has invested approximately US$28 million at Pulacayo and already acquired necessary environmental and social licenses to mine at Pulacayo. The Company is working with the Bolivian mining ministry and Corporacion Minera De Bolivia (COMIBOL) to obtain authorization which will allow Prophecy to mine at Pulacayo while transitioning from the current joint venture contract to a mining production contract.

     

    Qualified Persons and Update Date

    The technical contents of this news release have been prepared under the supervision of Christopher M. Kravits, CPG, LPG, General Mining Manager of Prophecy. Mr. Kravits is a Qualified Person as defined in NI 43-101. Mr. Kravits is a consultant to the Company and is not independent of the Company since most of his income is derived from the Company.

    Peter Webster, P. Geo., of Mercator Geological Services Limited is one of the Qualified Persons within the meaning of NI 43-101 responsible for preparation of Sections 3.0 to 8.0, 14.0 to 23.0 and 26 of the Report. He also reviewed all Report sections, contributed to the Report Summary and Report Sections 24.0 and 25.0, and responsible for the mineral resource estimate addressed in this news release. Michael P. Cullen, P. Geo., also of Mercator Geological Services Limited is the other Qualified Person within the meaning of NI 43-101 responsible for preparation of Sections 1.0 and 2.0, 9.0 through 13.0 of the Report. He also reviewed all Report sections and contributed to the Report Summary.

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