La Negra Silver Project

PROJECT HIGHLIGHTS

  • The La Negra silver discovery was made in the fall of 2014 and is one of several new prospects recently identified within a 25 x 15 km mineralized corridor, referred to as the 'Promontorio Mineral Belt'
  • La Negra is optioned to Pan American Silver Corp., which includes the Promontorio Silver Resource, located 7 kilometres south of La Negra, also part of the Promontorio Mineral Belt
  • Pan American Silver can earn 75% interest by spending US$16M on expenditures and payments within a four-year period with Kootenay retaining a 25% carried to production interest
  • To date, 41 drill holes have been completed with most returning high grade, wide spread silver mineralization from surface to a vertical depth of over 300 metres; click the following link to view the comprehensive results of all the drill holes completed to date: La Negra Drill Results
  • The initial 25 drill holes in the discovery program averaged 107 g/t silver in the breccia, with continuous mineralization with widths of up to 200 metres and averaged 150g/t silver in the breccia using a 75 g/t cutoff.
  • Drill hole LN 21 has been the best hole to date with 156 g/t silver over 200 metres including the bottom 50 metres with 420 g/t and 6 metres of 1337 g/t silver.
  • Potential for an attractive open pit scenario is supported by a prominent hill top formed by mineralization and good silver grades. Mineralization is hosted in a diatreme breccia, which also indicates a depth potential of several hundreds of metres.
  • Ongoing ground exploration within a 2-3 kilometre radius of the La Negra Breccia has identified two high priority mineralized trends with clear underlying geologic controls. These have been named the 'La Negra silver trend' and 'Vania'. Additional areas of silver and gold mineralization identified apart from these trends are currently being evaluated.
  • La Negra has been compared to Pan American's Alamo Dorado Mine located 190 kilometres to the south. Alamo Dorado's mineral zone formed a prominent hill that is now a low strip open pit. - La Negra mineral zone also forms a prominent hill; lending itself to the potential of a low strip open pit mining situation.
  • 3,400 metre diamond drilling program, consisting of approximately 18 drill holes is currently underway by Pan American Silver.

OVERVIEW

The La Negra silver discovery is situated only 7 kilometres north of the Promontorio Silver Resource within the Promontorio Mineral Belt, in the state of Sonora, Mexico. The Promontorio Mineral Belt is currently under option to Pan American Silver whereby it can earn a 75% interest in the project by spending US$16 million on expenditures and payments with Kootenay retaining a 25% carried to production interest. To date, Kootenay has completed two successful drill programs totaling 41 drill holes on the La Negra silver discovery with most drill holes returning significant and consistent intervals of high grade, widespread silver mineralization extending from surface to depth of 300 metres. Pan American Silver is currently conducting a 3,400 metre diamond drilling program, consisting of approximately 18 drill holes. The program will further test the La Negra Breccia as well as two additional targets identified to date.

WORK PREFORMED

Ongoing exploration by Kootenay’s technical team in 2014, resulted in the discovery of La Negra Breccia. Initial exploration on the La Negra prospect included airborne geophysics, petrographic analysis, trenching and surface sampling. These programs validated extensive silver mineralization over a large surface area measuring approximately 100 to 200 metres in width by 500 metres in length. To follow up the initial exploration programs, Kootenay completed a Phase I drill program on La Negra, which returned significant and consistent intervals of high grade, widespread silver mineralization extending from surface to depth, confirming a substantial new silver discovery. In 2015, Kootenay carried out a Phase II drill program that further confirmed the continuity of silver grades and the consistency of silver mineralization to depth within the core of the diatreme breccia. These results further reinforced La Negra's future as a potential low-cost, open pittable silver resource, which ultimately led to Pan America Silver's interest in the project. Click the following link to view La Negra Drill Results.

METALLURGICAL INFORMATION

To date, results from preliminary metallurgical testing of La Negra show potential for high silver recoveries by both leach extraction and flotation methods. Silver extraction in seven bottle roll tests (leach tests) ranged from 71 to 90%. Silver extraction in three rougher flotation tests ranged from 85 to 98%. Importantly, silver extraction by leaching was not influenced by sulphide sulphur content, and a sample of material from 100 to 200 metres below surface had 89% extraction in a bottle roll test. High silver recoveries by leaching, including in sulphide material, indicate potential for silver to be recovered on site in a dore, substantially reducing costs and discounts associated with a sulphide concentrate produced by flotation.

Metallurgical test work was completed by Kappes Cassiday and Associates of Reno, Nevada, under the direction of Hans Smit, P.Geo, a Qualified Person as defined by NI 43-101. Seven samples were created for testing comprised of material from 9 or 10 sub-samples of drill core rejects from across the area drilled and grouped by specific vertical depth and grade ranges. Bottle roll leach tests were conducted on a 1,000 gram portion of each sample that was ring and puck pulverized to a target size of 80% passing 0.075 millimetres. Tests were run for a total of 96 hours, but in most tests the majority of the silver was recovered in the first 2 to 4 hours. Cyanide and lime inputs were not optimized.