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South American Silver Corp Plans Path to Indium Dominance
By Claire O'Connor and James West
MidasLetter.com
Thursday, March 18, 2010
South American Silver Corp. (TSX: SAC) is a socially responsible mining company focused on the development of the world class Malku Khota Silver-Indium deposit in Bolivia. With a resource of 145 M oz of silver indicated and 178 M oz inferred, and 845,000 kg of indium indicated and 968,000 kg inferred, South American Silver Corp. has developed a very unique and highly fruitful property in the Department of Potosi, Bolivia.
SASC considers Malku Khota their flagship property. Located 100 km east of Oruro and 85 km south of Cochabamba, Executive VP Richard Doran and Executive VP of Exploration Felipe Malbran explain passionately why they’re focused in this particular area and the lengths they’ve gone to, to not only expand the resource but to enhance the well-being of the community.
The Malku Khota Project
“We had been working on a little project, Atocha, to the north prior to this…we followed the mineralized trend for 60km and we took the best piece. That’s what Malku Khota is.”
Translating as “Lake of the Condor”, SASC has been drilling at the 100% owned Malku Khota property for just over 3 years and has succeeded in creating a huge resource and completing a Preliminary Economic Assessment last year indicating low capital and operating costs.. This is due to the fact that the company is using an acid chloride leaching system as opposed to the more traditional milling. The intricate leaching system was aided in design by Dr. David Dreisinger, a well known professor at the University of British Columbia.
Tests have been carried out using the acid chloride leach on 10 mesh material in bottle rolls. The average recovery of silver was 80% and of indium was 70%. Further tests are underway to optimize extraction and reagent usage.
A preliminary economic assessment was carried out last year on Malku Khota and this included a base case with pre-tax undiscounted net preset value of US$1.233 billion and an internal rate of return of 50.7%. What contributes potently to these impressive figures is the indium resource in Malku Khota, and what the rest of the world would pay to get their hands on it!
Indium, And What It Means
Indium is used for ITO coating for LCD and plasma displays, for PhotoVoltaics and for semiconductors. It is in extremely high demand in Asian countries. Malku Khota’s annual indium production can range from 20 – 60 tonnes a year. The world consumption of indium is approximately 600 tonnes a year. The bottom line here is that SASC is on their way to becoming 10% - 15% of the world’s indium suppliers. When indium sells for approx $550 per kg, that’s saying something.
Executive VP Richard Doran is wholly aware of the comfortable little indium laced spot he’s sitting in. “We’re going to have to be very careful how we sell it, it sells for about $550 per kg. It’s a pretty valuable constituent…”
Community Relations
Another unique aspect of South American Silver Corp. is its huge concern for and understanding of the importance of local community relations in Bolivia. Surrounding the Malku Khota property are 11 indigenous communities. They barely acknowledge money and instead rely primarily on a bartering system.
“If we work with the community, and the community is happy because we are giving them work and helping them, then they give us the support to continue working in Bolivia.” Executive VP of Exploration Felipe Malbran explains.
To maintain and develop an understanding with these communities, SASC has actually hired an NGO (Non-Governmental Organization) to develop a means of ongoing communication so that community issues are addressed as they develop the project.
These community relations managers speak both indigenous languages, Aymara and Quechua, and strive to always include community leaders from project inception. SASC maintains weekly contact with each community to maintain a transparent and open relationship.
Press Releases and New Discoveries
Their highly commendable community relations ethics aside, South American Silver Corp is still making waves where it matters most in the mining industry. In a press release issued February 25th 2010 we learn about a new discovery at the Malku Khota property.
According to the press release:
“South American Silver Corp. has discovered a potentially significant new high-grade silver-gold-indium vein system at Malku Khota that may join the highly mineralized Wara Wara and Sucre zones. The importance of this new discovery is that the area between these two zones was previously classified as unmineralized material due to a lack of drilling in the area and is now shown to include a well-mineralized silver-gold-indium vein system. The vein system consists of many subparallel veins, the largest of which that has been drilled to date, is the Sucre vein. The most recent drill hole, WWD040, includes a significant 26-metre-wide interval of high-grade silver mineralization in the Sucre vein which averaged 125.2 grams per tonne (g/t) silver and 14.8 g/t indium. The vein intercept starts at 218 metres downhole and is approximately true width. This vein extends to the surface where it can be seen in outcrop.”
South American Silver Corp Stands Strong
Standing behind these impressive new discoveries is a strong and experienced management team and board. Ralph Fitch reigns as President and CEO. Fitch has over 40 years experience in minerals exploration, created General Minerals Corp, was former Chief Geologist with Chevron Corporation’s minerals division and is a graduate of the University of London.
Felipe Malbran and Richard Doran who spoke exclusively about the Malku Khota property have extensive experience with General Minerals and Chevron Resources, respectively.
Combine this powerful management team with their unique indium and silver resources, their impressively compassionate attitude to the community in which they’re exploring and their relatively undervalued share price ($0.38 March 16th), and you get something quite special.
Follow South American Silver Corps. Progress at www.soamsilver.com.
SOURCE: http://www.midasletter.com/news/10031801_South-american-silver-plans-indium-dominance.php
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