First Majestic discovers gold-silver veins at Ermitaño in Mexico

First Majestic Silver (TSX: AG; NYSE: AG) says it has found a new gold and silver mineralized system that its calling Navidad next to its Ermitaño mine in Mexico.

Drill result highlights posted on Tuesday include 4.78 metres grading 8.15 grams gold per tonne and 427 grams silver from 1,104.35 metres depth in hole EW-24-364. Hole EW-24-370 returned 4.4 metres at 10.13 grams gold and 86 grams silver from 1,162.8 metres downhole; and 5.8 metres at 5.65 grams gold and 46 grams silver from 961.6 metres depth.

Crews discovered the Navidad system during exploration to test the west side of the Ermitaño deposit at the 1,000-sq.-km Santa Elena site in Sonora state, the company said in a release. Six of seven drill holes intersected mineralization in a set of quartz veins with silver sulphides. The area is about 500 metres southwest and 750 metres below Ermitaño.

“While early stage, the discovery holds potential to extend the life of the Santa Elena complex, which we currently model at six years,” BMO Capital Markerts mining analyst Kevin O’Halloran wrote in a note on Tuesday. “The proximity to Ermitaño means eventual development could take advantage of existing mine infrastructure, although the intercepts are substantially below the current development.”

The full extent and geometry of Navidad’s gold and silver vein system, which is open in all directions, isn’t fully known, First Majestic said. Four drill rigs are exploring the extent and grade of Navidad’s mineralization this year.

More exploration

First Majestic president and CEO Keith Neumeyer says Navidad’s location near Ermitaño’s infrastructure is important and encouraging for the prospects of continued exploration.

“This is the most promising discovery at the Santa Elena property since Ermitaño was discovered in 2016,” First Majestic CEO Keith Neumeyer said in the release. “Navidad has the potential to significantly increase Santa Elena’s estimated mineral resources and, ultimately, extend the life of mine.”

The Navidad vein system has an apparent strike to the northeast and dips at a moderate to low angle to the northwest, the company said. The intersections outline a strike length of 750 metres and a dip continuity of 225 metres, the minimum distances between drill holes, it said. The Navidad vein ranges from 1.8 metres to 5 metres in thickness while adjacent veins ranges from 1.5 metres to 6 metres.

First Majestic also owns and operates, in Durango state, the San Dimas silver-gold mine as part of the assets it bought from Primero Mining for $320 million in 2018. It has held the La Encantada silver mine in northern Mexico’s Coahuila state since 2006. Its projects include the Jerritt Canyon gold site in northeastern Nevada. The company started its First Mint plant in Nevada last year to expand bullion sales.

Shares in First Majestic Silver slipped less than 1% by mid-Tuesday in Toronto to C$8.22 apiece, valuing the company at C$2.4 billion ($1.7bn). They’ve traded in a 52-week range of C$7.83 to C$10.72.