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Southern Silver Closes First Tranche of Private Placement: Options Oro Project
By: Marketwired .
Jan. 31, 2013 05:34 PM
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 01/31/13 -- Southern Silver Exploration Corp. (TSX VENTURE:SSV)(FRANKFURT:SEG) ("Southern Silver") has closed the first tranche of its previously reported (NR-01-13; January 16, 2013) non-brokered private placement by issuing 8,002,000 units at a price of $0.05 per unit for gross proceeds of $400,100. Each unit consists of one common share and one share purchase warrant exercisable to purchase one additional common share for a period of three years at an exercise price of $0.10 per share.
Securities issued pursuant to this tranche of the private placement, including common shares, share purchase warrants and finder's warrants issued as finder's fees, carry a legend restricting trading of the securities until June 1, 2013. The private placement and finder's fees are subject to regulatory approval. Net proceeds from the Offering will be utilized for exploration and property maintenance expenses incurred at the Dragoon and Oro projects in the southwestern USA and will be added to general working capital.
The company also announces that it has entered into an option agreement dated Jan. 14, 2013, with Desert Star Resources Ltd. ("Desert Star") which can earn up to a 70-per-cent interest in Southern Silver's copper and gold project (the Oro project), located in southwestern New Mexico, United States.
In accordance with the terms of the option agreement, Desert Star paid to Southern Silver $75,000 upon execution of the agreement. The option agreement provides that Desert Star can earn an initial undivided 51-per-cent interest in the Oro project by making an additional cash payment of $150,000 by Aug. 1, 2013, and, over a period of 42 months after approval of the option agreement by the TSX Venture Exchange, incurring exploration expenditures totaling $3-million and issuing one million common shares of Desert Star to Southern Silver. Desert Star also has the option to earn an additional 19-per-cent undivided interest in the Oro project by incurring a further $3-million in exploration expenditures and completing a preliminary economic assessment, on or before the date that is 66 months after exchange approval. If exchange approval is not obtained by March 15, 2013, either party may terminate the option agreement, in which case Southern Silver will refund the $75,000 paid by Desert Star on execution of the option agreement.
About the Oro Property
The Oro project comprises a contiguous block of federal, state and private land totaling 17.2 square kilometres in the historic Eureka mining district in Grant County, New Mexico and is located approximately 40 kilometres southwest of the Silver City porphyry copper district. The property consists of 157 unpatented lode claims and a relatively large group of private mineral and surface patents and two parcels of New Mexico State Land which are critical to the further evaluation of the Oro property and which had previously hampered exploration due to fragmented land holdings in the district.
Mining primarily occurred in the Eureka District during the late 19th and early 20th centuries, but a small amount of production was reported into the 1950's. Production has been estimated at 2.9 million lbs Pb, 1.7 million lbs Zn, 500,000 lbs Cu, 450,000 ounces Ag, and 5,000 ounces Au. In addition to widespread precious- and base-metal mineralization, favorable features of the Oro property include: prospective carbonate host rocks, low- and high-angle faults, a possible 'cap rock', and multiple Laramide or Tertiary intrusions with well-zoned, prograde and retrograde alteration haloes.
Southern Silver has completed nine drill holes totaling a 3,202 metre diamond drill program on the project. Potential for bulk-tonnage intrusion-related gold, polymetallic replacement (CRD)/skarn deposits, and copper-gold porphyries remains high with drilling having encountered strongly altered intrusive and sedimentary rocks, with anomalous metals, reflecting the large size of this mineral system. Mapping and sampling peripheral to the main altered area at the property has identified the shallow Stock Pond disseminated gold target. Permits have been received for additional drill testing of up to 14 holes which will expedite future exploration on the property.
About Southern Silver Exploration Corp.
Southern Silver Exploration Corp. is a precious and base metal exploration and development company and a member of the Manex Resource Group; a private company comprised of an exceptional multi-disciplinary team of professionals with specific expertise in all areas of exploration, development, corporate finance and public company administration.
The company's growth strategy is to acquire, explore and develop either directly or through joint venture relationships high-quality mineral properties in progressive jurisdictions within North America.
Southern Silver's silver-lead-zinc Cerro Las Minitas project located in Durango, Mexico is currently under option to Freeport-McMoRan Exploration Corporation which can earn a 70% interest in the project by making staged purchase payments and funding exploration and development expenditures of $25 million on the project over a ten year period. Southern Silver is currently advancing the porphyry copper-molybdenum Dragoon project in Arizona and the gold-silver-copper Oro project in New Mexico.
Robert Macdonald (P.Geo) is a Qualified Person as defined by National Instrument 43-101 and has reviewed and approved the technical contents of this release.
On behalf of the Board of Directors
Lawrence Page, Q.C., President & Director, Southern Silver Exploration Corp.
For further information, please visit Southern Silver's website at www.southernsilverexploration.com.
This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. These statements are based on a number of assumptions, including, but not limited to, assumptions regarding general economic conditions, interest rates, commodity markets, regulatory and governmental approvals for the company's projects, and the availability of financing for the company's development projects on reasonable terms. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, the timing and receipt of government and regulatory approvals, and continued availability of capital and financing and general economic, market or business conditions. Southern Silver Exploration Corp. does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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