Outcrop Silver & Gold Corp. is reporting its deepest high-grade mineralization to date at its Santa Ana project in Colombia.
New drilling results have revealed the deepest high-grade mineralization yet at Outcrop Silver & Gold Corp.’s (OCG:TSX.V; OCGSF:OTCQX; MRG1:DB) Las Maras target on its 100%-owned Santa Ana project in Colombia.
The results extend the shoot to a depth of 370 meters, possibly expanding all resource areas by 50% with relatively low-risk, deeper drilling offsetting shallower high-grade mineralization.
Outcrop plans to establish a maiden resource estimate for the project by the end of the year. Gwen Preston of The Maven Letter wrote, “they are far from done,” providing impressive results.
“We remain impressed by the pace and extent of the vein discoveries at Santa Ana,” Research Capital Corp.’s Stuart McDougall wrote.
“Potential is one thing,” she wrote of the company. “Potential in the hands of a team that has demonstrated the ability to turn that into quality (ounces) is another. Outcrop certainly represents the latter . . . I think Outcrop has demonstrated a solid grasp of how mineralization is developed at Santa Ana. I think that understanding bodes well for further discovery to add to what will be a strong initial resource.”
Outcrop this week announced the results of nine core holes designed to test Las Maras’ continuity at depth. The deposit’s Las Peñas vein has an average estimated true width of 1.6 meters with a weighted average of 1,161 grams per tonne silver equivalent (g/t Ag eq).
Hole DH294 intersected 2.14 meters true width of 2,032 g/t Ag eq. DH292 intersected 4.4 meters true width of 563 g/t Ag eq, including 0.4 meters of 5,109 g/t Ag eq and 0.37 meters of 846 g/t Ag eq. A third hole, DH300, intersected 3.82 meters true width of 537 g/t Ag eq.
Twenty-three holes have been drilled at Las Maras so far, and 13 produced high-grade assays. Two holes have assays pending, the results could come in the next several weeks.
“All I can say is Santa Ana just keeps on delivering,” Outcrop Chief Executive Officer Joseph Hebert told Streetwise Reports.
The company had initially made the decision to drill shallow on the trend because it might be cheaper and quicker to get to the project’s estimated 50-million-ounce (Moz) Ag eq resource. Now, Outcrop can look at exploring deeper.
“We could get a substantial increase in the resource,” Hebert said. “That’d be relatively low-risk drilling, you know, right under known mineralization.”
The resource estimate remains the focus now, but Outcrop said the results of 2022’s drilling will also lead it to dig deeper at the site in early 2023.
The company has sunk more than 280 core holes and assayed more than 47,000 meters of drilling at Santa Ana, which is in the northern Tolima Department, about 190 kilometers from the capital of Bogota. It’s comprised of five or more regional scale parallel vein systems across a trend 12 kilometers wide and 30 kilometers long.
Santa Ana mined back to at least 1585, was once the largest colonial silver mine in Colombia. It now covers 36,000 hectares. Spanish Royal Archives reports said the area had 14 mines producing an average of 4,000 g/t Ag over an average of 1.4 meters, with some mines finding as much as 17,000 g/t Ag.
This summer, Outcrop released its thickest and highest-grade intercept from Las Maras to date: 1,651 g/t Ag eq over 8.97 meters at hole DH274, including 15,941 g/t Ag eq over 0.66 meters.
The company’s intercept record for Santa Ana has been broken by successive results in June, July, and August. The results keep pointing Outcrop toward better holes, which is no accident, Hebert said. Drilling provides “high-quality knowledge” and makes exploration more efficient.
Outcrop is filling in the spaces between the holes. It’s finding not just single veins but packages of veins that “create better thicknesses and better grades,” he said.
The project has gotten the attention of analysts. In August, Research Capital Corp.’s Stuart McDougall reiterated his Speculative Buy rating with a target of CA$0.75 per share on the strength of drilling results and the 50 Moz Ag eq estimated resource.
“We remain impressed by the pace and extent of the vein discoveries at Santa Ana,” McDougall wrote.
A Changing Colombia
Another issue Outcrop has faced is the recent election of Colombia’s first leftist president, Gustavo Petro. Petro campaigned on enacting a 10% profit tax on gold miners and generally discouraging mining.
However, the tax no longer applies to gold, and Petro has made it clear he is not against all mining, just fossil fuel extraction.
“So, while I couldn’t invest in a company exploring for coal in Colombia, I will invest in ones exploring for copper or silver,” Preston wrote in The Maven Letter. “There is no reason to think explorers working silver or copper projects will face political impediments, especially companies like Outcrop that have been operating (in Colombia) for several years already.”
Ownership, Coverage, and Share Structure
Mining financier Eric Sprott owns about 17% of Outcrop, management and directors own about 15%, and the rest is held by high-net-worth investors and retail, the company said.
The company is followed by Research Capital Corp.’s Stuart McDougall wrote and Gwen Preston of The Maven Letter. Click “See More Live Data” in the data box above to read more.
Outcrop has a market cap of CA$54.16 million with 132.1 million shares outstanding and 81 million free-floating. It trades in a 52-week range of CA$0.36 and CA$0.10.
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1) Steve Sobek wrote this article for Streetwise Reports LLC. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
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