Las Chispas - You're only given a little spark of madness. You mustn't lose it.

Silver Crest have been releasing some interesting results from Las Chispas, we've been getting a steady stream of results from the 1st phase of drilling and underground sampling programs, which has propelled them to current market cap of ~90M and they have raised $10M recently (link) to fund future exploration programs.

For comparison - Regulus Resources, with Anta Kori (just containing 3.4Moz Au, 3 billion pounds of copper) have a market cap of 'only' $68M. So is Las Chispas any good?

The very short answer - no, not really

Summary.

Everything that Silver Crest are telling us about Las Chispas is that:

• Gold and silver found in a number of narrow (~1m wide) veins.
• dilution will be an issue.
• High grade (read economic) zones exist but are found as very small, discrete shoots.
• hard to define significant resources
• have the old workings sterilized large portions of the veins?
• may be impossible (or at least very expensive) to remove residual blocks.

Exploration upside

• Mapping, drilling and sampling has identified multiple high-grade, narrow gold-silver veins.
• They have only been partially explored/exploited
• There is an unexplored area to the NW of the Las Chispas Mine (series of shafts and dumps). I haven't found any info on this area in any of the reports/presentations or press releases.

I was going to say something clever about drill-holes LC16-05 and 08, as the grade and thickness of the Las Chispas vein appear to be getting thicker where the splay vein (unnamed vein) joins to eh main vein, but then I realized that that is where the majority of the historic workings are located. So it probably was good, but no is only useful for bats.

Question - Why appear to be assaying the entire length of each drill-hole, Why? Is it because the mineralization is hard to see and they HAVE to assay everything? This could be a major issue when they come to mining (or taking a 100,000 tonne bulk sample).

You can download the 3D model here (link) and I've also included a Google Earth file with the property boundary, veins, faults and the surface workings with the 3D model as well.

Note: to view the 3D model you'll have to download the latest Leapfrog Viewer - 4.7 from here (link)

Problem 1 - Narrow veins

Here are some photos of the Las Chispas veins. 

Varela Vein - narrow

Las Chispas Vein - narrow

William Tell vein - narrow. Can you mine the stock-work zone?

Why is this a problem:

You need a lot of drilling to define significant resources, and if I was looking to invest in a silver exploration company, I want to see that there is a potential to define >50Moz of AgEq resources.

For mining, thin veins means that there will be a lot of dilution, you can do a quick check to see how robust the grades are over a proper mining width - 1.25m for selective mining and 2.5m for mechanized mining.

I've also included my excel file as well so you can play around with the numbers.

You can see that when we apply these mining widths (and assuming that the country rock is unmineralized) that a large number of the reported samples fall below 300 g/t AgEq that is a convenient cut-off grade for small scale underground mining (or bulk sampling).

Problem 2 - small ore shoots

Here is a long section of the Las Chispas Vein.

Red lines - areas where samples grades >400 g/t AgEq. Note the first number is the strike length (the length of the line)

here's another from William Tell.

Add caption

We've been told that Silver Crest have the taken in excess of 5,000 samples from Las Chispas, that basically means that they are sampling everything. We are also told that they have results from 2055 samples, but only 301 (15%) gave assays of >150 g/t AgEq. That means on the sections, the ONLY areas of reasonable assays are those area underlined by a red line.

Challenge - join the red lines together to form the ore-shoots!

Here is an annotated version of the Las Chispas Section

dark grey = areas mined historically

I've made it a bit easier to see where the historic mining was on the Las Chispas vein. It appears they mined some very small, erratic ore-shoots. Was this because:

• The economic gold-silver mineralization is restricted to small, erratic shoots
• They were focused on mining the highest grade areas (i.e. the high grade core)

Look where the 'good' samples that Silver Crest have taken have come from.

dark grey = mined areas, red bars = areas of good samples

It looks like all of the decent samples came from within (remnant blocks) or immediately adjacent to those historic stopes. Basically where there isn't a red line means that samples contained less than 150 g/t AgEq!

What is the problem with this? Well, it makes it hard to define nice big resource blocks. You can see the issue, to define a large amount of resources you need lots of thin veins (at Curraghinalt has at least 16 separate veins) to have a large resource.

Problem 3 - Is the mineralization is hard to see?

When I read the technical report I was stunned to see that Silver Crest submitted 4332 samples from the phase 1 drill program. They only drilled 6558.1m in 22 holes. That means that each sample assayed 1.5m of core, so it looks like they are sampling the entire drill-hole. For vein deposits this is overkill, why are they doing this? could it be:

1. They are going to use the assay data to map out alteration and mineralization zonation?
2. Checking to see if there is bulk tonnage disseminated halo around the veins
• Normally you sample the entire length of 1 drill-hole see what you get and if there is no evidence for a disseminated halo you assay 5-10m either side of veins, faults, structures etc. 
3. It is damn hard to see where the mineralization is - i.e. no obvious mineralized structures

Fortunately, we have a few photos of the gold-silver zones

this assayed 4.6 g/t Au and 621 g/t Ag

I can't see an obvious vein, do you? I'm guessing it is the lighter grey rocks.

A bit more veining, but nothing you would say is impressive -  this ran 2.4 g/t Au and 311 g/t Ag

wow, a 1 cm whopper

You can see that there is a bit of veining, but nothing that jumps out and rapes your eyeballs and screams this vein is going to give you a silver enema.

Now the silver lining

It is early days, the first phase of drilling got decent results on the 2 main veins, may have found a a decent grade block on the extension of the William Tell veins and also discovered a few more veins, splays with some decent gold and silver grades.

I also check the area on Google Earth to see what 'culture' you can see at surface.


There are a load of dumps and shafts to the NW of the Las Chispas and William Tell vein systems. When I check the technical report and all the info on the website I can't find anything mentioned about this area, but it hints that there are other vein systems that are still waiting for the Silver Crest geologists to get to them.

The results from Las Chispas have been interesting, but we are still early in its story, but I haven't seen anything that screams "big mineralized system with big potential". My feels for SC's market cap is that people are buying into the management team and hope that they can deliver another success.