LOS REYES PROJECT
Sinaloa, Mexico
Key Facts
LOCATION: 43 kilometres south east of the mining centre of Cosala, Sinaloa
HISTORY: Los Reyes has an extensive mining history that stretches back into the 1700s.
SIZE: Contiguous claims totaling over 13,800 hectares
RESOURCE UPSIDE: Current resource open on strike and at depth – 8 to 10 new high-grade underexplored surface discoveries for drill testing – Currently completing phase 1 of a 15,000 metre drill program, initial results have discovered bonanza grade gold and silver mineralization
ACQUISITION: Completed the acquisition of the project from Vista Gold including buy-back of two separate 2% NSRs and the 49% back-in right on underground mining.
INFRASTRUCTURE: Direct access to roads, power, abundant water, and local labor force
LICENSING & PERMITTING: Successfully completed 30-year surface access rights agreement to ensure continued exploration, development and receipt of a mining and construction permit. Permit application submitted for new exploration drilling
IN PROXIMITY: Americas Gold and Silver (TSX: USA; NYSE: USAS) / Minera Alamos (TSXV: MAI) / First Majestic (NYSE: AG; TSX: FR) / McEwen Mining (TSE and NYSE: MUX) / Chesapeake (TSX: CKG)
“Los Reyes is an exceptional opportunity for exploration and development. The Company will continue to drill in order to expand existing resources as well as identify promising new targets.” —Company CEO, Dan Kunz
NI 43-101 TECHNICAL REPORT (APRIL 2020).
History
Gold and silver were discovered at Los Reyes by the Spanish in the late 1700s and mining occurred in the area for over 150 years up until the 1950s. The Guadalupe de los Reyes underground mine opened in the late 1800s and to date is the most significant source of gold production in the district. It is estimated to have produced 500-600,000 oz of gold and 40M oz of silver at reported grades of +10 g/t Au and +500 g/t Ag.
From the 1950s through the 1980s there was limited activity in the Los Reyes area other than mostly exploration reconnaissance studies. Modern drilling began at the Los Reyes area in the 1990s and was targeted at defining shallow and lower-grade gold-silver mineralization in areas surrounding the Los Reyes underground operations. Since that time, over 50,000 meters of RC and core drilling have been completed within the current project boundaries resulting in extensive area-wide resource data.
Why Los Reyes?
Los Reyes hosts well-advanced:
GOLD RESOURCES OF:
633kozs
Measured & Indicated
179kozs
Inferred
SILVER RESOURCES OF:
16,604kozs
Measured & Indicated
6,831kozs
Inferred
Established and operating in Sinaloa, Mexico with additional early stage gold/silver opportunities
Exploration Upside with Production Optionality
Los Reyes was on-track to become a heap leach mine in 1998...
When gold prices dropped the project was mothballed.
Current pit-constrained resource areas - open on strike and at depth
Additional mineralized zones - 8 to 10 new high-grade underexplored surface discoveries for drill testing
Untested new claim blocks added to project have yet to be explored
Direct access to roads, power, abundant water, and local labor force
Amenable to simple open pit heap leach mining
Tens of millions already spent in exploration & engineering studies, 8 open pit deposits delineated
Holds great upside potential for both resource expansion, along strike, down dip, at depth, and in new areas
Experienced management team very familiar with the region and open pit heap leach operations; local team already in place
Concession Boundary
Exceptional exploration upside with current and new targets
- 8 to 10 new high grade underexplored surface discoveries for drill testing
- Untested new claim blocks added to project yet to have any exploration
Consolidation opportunity and partnership
- Potential consolidation of assets and operations into mid-tier producer at a later date
- Option to acquire Vista Gold’s 2% NSRs (surface and underground) and a 49% back-in right
Mineral Resource
| Cutoff | Assurance Category | Tonnes | Average Au | Contained Au | Average Ag | Contained Ag |
|---|---|---|---|---|---|---|
| Grade (g/t) | Ounces | Grade (g/t) | Ounces | |||
| 0.22 g/t cutoff total | M+I | 19,752,000 | 1.00 | 633,034 | 26.1 | 16,604,032 |
| Inferred | 7,094,000 | 0.78 | 178,837 | 29.9 | 6,830,502 | 6,830,502 |
| 0.50 g/t cutoff total | M+I | 11,822,000 | 1.44 | 546,305 | 34.0 | 12,912,194 |
| Inferred | 3,956,000 | 1.13 | 143,605 | 42.9 | 5,456,291 | 5,456,291 |
| 0.70 g/t cutoff total | M+I | 8,697,000 | 1.74 | 487,526 | 38.8 | 10,839,541 |
| Inferred | 2,603,000 | 1.44 | 120,422 | 54.4 | 4,549,221 | 4,549,221 |
| 0.90 g/t cutoff total | M+I | 6,746,000 | 2.02 | 437,948 | 43.0 | 9,317,480 |
| Inferred | 1,859,000 | 1.71 | 101,910 | 64.2 | 3,838,727 | 3,838,727 |
| 1.0 g/t cutoff total | M+I | 5,914,000 | 2.17 | 412,696 | 45.2 | 8,595,092 |
| Inferred | 1,685,000 | 1.78 | 96,654 | 67.2 | 3,641,704 | 3,641,704 |
Resource Expansion
CLICK HERE – Los Reyes Project Drill Intercepts as of June 2021
CLICK HERE – Los Reyes Project Drill Intercepts as of July 2021
Historic Drill Intercepts
| Drillhole | From (m) | To (m) | Length (m) | Au (ppm) | Ag (ppm) |
|---|---|---|---|---|---|
| 12GL-04 | 73.00 | 78.00 | 5.00 | 14.4 | 156 |
| 12GV-02 | 239.90 | 245.15 | 5.25 | 12.3 | 745 |
| 12SM-08 | 87.40 | 91.40 | 4.00 | 12.7 | 348 |
| 12ZAP-06 | 7.00 | 12.40 | 5.40 | 12.5 | 75 |
| 15GDLR-011 | 98.80 | 104.00 | 5.20 | 10.1 | 104 |
| GL002 | 48.77 | 51.82 | 3.05 | 11.9 | 288 |
| GL005 | 39.62 | 42.67 | 3.05 | 13.7 | 926 |
| GL010 | 47.24 | 50.29 | 3.05 | 11.1 | 380 |
| GL011 | 16.76 | 19.81 | 3.05 | 11.4 | 149 |
| GL073 | 65.53 | 68.58 | 3.05 | 10.1 | 202 |
| GW022 | 82.30 | 88.39 | 6.09 | 14.1 | 144 |
| SM009 | 57.91 | 60.96 | 3.05 | 15.9 | 165 |
| Drillhole | From (m) | To (m) | Length (m) | Au (ppm) | Ag (ppm) |
|---|---|---|---|---|---|
| SM032 | 50.29 | 53.34 | 3.05 | 47.9 | 384 |
| TA003 | 21.34 | 24.38 | 3.04 | 11.7 | 80 |
| ZA007 | 30.48 | 38.10 | 7.62 | 10.1 | — |
| ZA016 | 62.48 | 67.06 | 4.58 | 11.4 | — |
| ZA062 | 25.91 | 32.00 | 6.09 | 10.8 | — |
| ZA068 | 47.24 | 50.29 | 3.05 | 10.7 | 51 |
| ZA082 | 83.51 | 86.87 | 3.36 | 15.5 | 35 |
| ZA093 | 54.86 | 57.91 | 3.05 | 12.4 | 87 |
| ZA127 | 3.05 | 6.10 | 3.05 | 13.6 | 65 |
| ZA148 | 35.05 | 41.15 | 6.10 | 32.2 | 80 |
| ZA178 | 38.10 | 41.15 | 3.05 | 12.7 | 43 |
| ZA196 | 51.82 | 54.86 | 3.04 | 14.3 | 42 |
| Cutoff | Assurance Category | Tonnes | Average Au | Contained Au | Average Ag | Contained Ag |
|---|---|---|---|---|---|---|
| Grade (g/t) | Ounces | Grade (g/t) | Ounces | |||
| 0.22 g/t cutoff total | M+I | 19,752,000 | 1.00 | 633,034 | 26.1 | 16,604,032 |
| Inferred | 7,094,000 | 0.78 | 178,837 | 29.9 | 6,830,502 | 6,830,502 |
| 0.50 g/t cutoff total | M+I | 11,822,000 | 1.44 | 546,305 | 34.0 | 12,912,194 |
| Inferred | 3,956,000 | 1.13 | 143,605 | 42.9 | 5,456,291 | 5,456,291 |
| 0.70 g/t cutoff total | M+I | 8,697,000 | 1.74 | 487,526 | 38.8 | 10,839,541 |
| Inferred | 2,603,000 | 1.44 | 120,422 | 54.4 | 4,549,221 | 4,549,221 |
| 0.90 g/t cutoff total | M+I | 6,746,000 | 2.02 | 437,948 | 43.0 | 9,317,480 |
| Inferred | 1,859,000 | 1.71 | 101,910 | 64.2 | 3,838,727 | 3,838,727 |
| 1.0 g/t cutoff total | M+I | 5,914,000 | 2.17 | 412,696 | 45.2 | 8,595,092 |
| Inferred | 1,685,000 | 1.78 | 96,654 | 67.2 | 3,641,704 | 3,641,704 |
Exploration Potential
STRATEGY IS TO FOLLOW THE DEFINED STRUCTURES AND DRILL ALONG STRIKE, DOWN-DIP, AND NEW TARGET AREAS IDENTIFIED THROUGH MAPPING AND TRENCHING
OUR CURRENT DRILL SUMMARY
The Path Forward
1Upgrade Resource
Upgrade 7.1 million tonnes of current Inferred resource to the Measured and Indicated category
- Approximately 2,000 metres of surface trenching – COMPLETED
- Approximately 3,000 metres of drilling in 15 to 20 shallow holes – ONGOING
2Expand Resource
Add new gold and silver ounces by drilling along strike and down dip adjacent to the existing pit-constrained resource areas
- Approximately 1,500 metres of surface trenching – COMPLETED
- Approximately 5,000 metres of drilling with some drill holes reaching 250 metres in depth – ONGOING
3Logistics
Define the potential to add new gold and silver ounces in unexplored areas where existing data and new mapping data confirm the target potential
- Approximately 3,500 metres of surface trenching – ONGOING
- Approximately 7,000 metres of drilling with some drill holes reaching 400 to 500 metres in depth – ONGOING
Mapping and Sampling
- A new detailed base geologic map is being prepared for the entire Los Reyes concession area
- Surface mapping of the various rock types, alterations, geologic structures and other physical features
- Log and analyze 13,000 metres of core contained in 89 drill holes in Prime’s core shack in Hermosillo
- New regional soil and rock chip sampling and assaying will be completed to acquire fresh data
Schedule and Logistics
- The program will work through the rainy season
- Mapping and core logging activity is ongoing
- The initial trench sampling is completed
- Currently this phase of exploration is expected to be active through Q2 2021
Metallurgical Test Work
- Past metallurgical tests show that both heap leach and milling/CIL recovery are viable options
- The drill and channel sample material sent to the assay lab will be analyzed for cyanide solubility using bottle roll and similar testing in order to build a stronger database of recovery data across the project
Sustainability
Our People
Our people are the foundation for everything we do and represent at Prime Mining. We strongly emphasize respect, safety, and environmentally responsible mining amongst all our employees.
We value, support all those working with our corporation whether in the field or office and treat all employees and contractors fairly and provide equal opportunity at all levels of the organization without bias.
We aim to maintain a productive and supportive work environment that is based on mutual respect, fairness, and integrity.
Our Environment
Prime Mining strives to ensure proper environmental compliance by committing our efforts to working closely with our partners on the ground and through diligence in our daily activities.
We prioritise on protecting the environment by minimizing the impact our exploration and operations may cause.
Focus is aimed at providing a safe and responsible culture amongst our employees and contractors as we continue to explore and assess all areas which minimize the environmental footprint.
We fully comply with all applicable environmental laws and regulations and are fully engaged with our local stakeholders through open and transparent communications.
Our Health and Safety
The health, safety and well-being of our employees, contractors and the people who live near our project is paramount for Prime Mining.
Our goal is to provide and operate a safe and healthy work environment, whether in our offices, or in the field. We strive to achieve zero accidents in the workplace.
As a top priority, the we have developed safety systems by incorporating proper practices and procedures at our local operations and by following strict safety and health standards and practices that meet or exceed industry standards and applicable government codes, standards and regulations in all jurisdictions in which we conduct business.
“Human health and safety comes first in our world of mineral exploration and mining. Now we extend that concern to our home, members of our communities and people around the globe.” – Daniel Kunz, Prime Mining CEO
Covid-19
In a response to the current pandemic environment, Prime has taken actions to minimize the risks of the Covid-19 virus, both to employees and people interacting with the Company’s programs and activities. Although there are no active or current cases of the virus reported at any of the Company’s workplaces in Canada, USA or Mexico, Prime is closely following government health protocols and is closely monitoring activities.
Our Community
Prime Mining is committed to responsible mineral exploration and creating a positive impact in the communities we live and work. We work positively on establishing strong and respectful relationships with the communities we operate to ensure that exploration work is conducted in a culturally and environmentally sensitive manner.
Prime delivers on this promise through regular dialogue, consultation and communications with all our stakeholders and by respecting cultures, customs and values of the people we interact and conduct business with.
We aim to support our local communities and their sustainability through measures such as development programs, locally sourcing goods and services, support for community initiatives and employing local people.
