Mithril Silver and Gold Limited

Engineering and Mining Journal (August 27, 1897)

Engineering and Mining Journal (Sept 4, 1897)

Engineering and Mining Journal (May 12, 1900)

Copalquin District

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Some geotechnical logging of exploration holes has been undertaken and historical workings are present. AMC notes that rock mass conditions indicate “good” to “very good” rock but can generally be categorised as “fair” until recommended geotechnical assessment work has been undertaken. AMC has recommended geotechnical work, which includes geotechnical logging of existing drill core on site, geotechnical diamond core drilling, structural modelling and structure confirmation drilling (to coincide with resource infill drilling) to be completed prior to further mining study work.

The Copalquin Project lies within the Sierra Madre Occidental physiographic province of north-western Mexico. The project is underlain by andesitic volcanics of the Cretaceous-Tertiary Lower Volcanic Series. A Tertiary granodiorite to monzonite pluton intrudes the andesite and much of the area is capped by Tertiary rhyolite ignimbrites of the Upper Volcanic Series. Mineralisation is thought to be contemporaneous with the eruption of the Upper Volcanic Series.

Semi-continuous low-angle breccia zones have formed within the andesite parallel to the granodiorite contact. These zones include the El Cometa breccia and the Los Reyes breccia. The geometry of these zones is similar to the nearby El Gallo silver deposit of McEwen Mining which is also formed in a series of breccias parallel to the contact between intrusive rocks and Lower Volcanic Series andesite.

A series of high angle normal faults strikes northwest and dips to the northeast including the Refugio, La Soledad and La Constancia structures which host veins mineralised with gold and silver. North-south striking, west dipping faults at San Manuel also host mineralized veins.

Both the low-angle breccias and the high-angle faults host extensive zones of mineralised quartz breccia. It is likely that the low angle zones developed as tectonic breccias during the intrusion of the granodiorite and were later mineralized by hydrothermal activity related to the eruption of the Upper Volcanic Series.

Large areas of argillic alteration occur across the concessions. The alteration forms haloes adjacent to the known structures and large zones where structures have not been identified. Argillic alteration is indicative of widespread penetration of hydrothermal fluids into the surrounding rocks and suggests a long-lived hydrothermal system was active at Copalquin.

The alteration from Refugio to Los Reyes is over 2,000 meters long and from 100 to 400 meters wide. It is expected that the widest zones are related to shallow-dipping portions of the Cometa-Los Reyes structures where the structure is nearer the outcrop surface. Similar alteration is present well to the west at El Platanal and well to the east at Constancia. It cannot be stressed enough that this strong, widespread argillic alteration forming a large-volume halo well out from the veins is the observable geologic characteristic that identifies Copalquin as a 

Copalquin is a significant district scale property widespread historic mining activity. 

The recent LiDAR survey has revealed 298 historic mines and surface workings throughout this impressive district.

 Exploration work in the district since July 2020 has defined a maiden JORC mineral resource estimate at the first of several target areas along two lines of historic workings as shown in 

.  The recent LiDAR has provided several more areas throughout the district that require initial exploration work.

Exploration drilling, mapping, rock chip sampling and soil sampling is ongoing throughout this large district with work advancing towards resource expansion at the first target area for a future development plus the exciting ongoing exploration work to continue to expand the resource footprint throughout this district.

AMC Consultants commenced and completed a mining concepts design study for the El Refugio-La Soledad maiden JORC mineral resource estimate in 1Q 2022. The study considered open pit potential and various underground mining techniques. The positioning of the underground mine development was also assessed.

The study work shows that there is some open pit potential requiring further drilling work to better define near surface high-grade material at El Cometa. The most likely scenario from the study indicates that the resource would be most effectively mined by underground methods.

For the underground mining, the preferred mining method recommended is mechanised Avoca bench (a variant of long hole open stope benching with rockfill) using a bottom-up extraction sequence as shown in the schematic on the right.

 – Schematic of modified Avoca mining method

 – Plan view of the conceptual mine plan using the maiden MRE for El Refugio-La Soledad

 – Mineral resource estimate El Refugio – La Soledad using a cut-off grade of 2.0 g/t AuEq*

*AuEq. = gold equivalent calculated using and gold:silver price ratio of 70:1. That is, 70 g/t silver = 1 g/t gold. The metal prices used to determine the 70:1 ratio are the cumulative average prices for 2021: gold USD1,798.34 and silver: USD25.32 (actual is 71:1) from 

The region has a rich mining history dating back more nearly 200 years across the gold silver trend with world class deposits.

discovered in the 1848, production ceased during the Mexican Revolution

by 1897 there were 10 head stamp batteries installed

the company Minera CIBOLA milled ore from the San Manuel and El Cometa mines in 1935

detailed sampling of some workings by Industrial Mineral Mexico S.A. de C.V. (IMMSA) in 1983

in 1995, Alta Pimeria and Kennecott outline 

a potential target of a million ounces of gold and 50 million ounces of silver

Bell Coast Capital Corp (BCCC) conducted a helicopter supported, 31-hole, 2,500 m diamond drill program from 6 to 8 drill pads in 1997. 

This first-pass drilling program returned excellent results

, but BCCC withdrew from the project due to difficulty in acquiring financing during a period of very low gold and silver prices

BCCC completed an extensive program of geochemical sampling and mapping, 

resulting in the discovery of three large anomalies

 – Mining concession area covering the Copalquin Mining District with Maiden MRE (November 2021) for the first target area. Shown on the map are drill and channel sampling highlights plus the new LiDAR identified areas of previously unknown historic mining activities (from 1850 - 1920)

Articles in the Engineering and Mining Journal 1897 and 1900 give some details about past developments and production of gold and silver from the Copalquin Mining District. 

 – Metallurgical recoveries for gold and silver using flotation and cyanidation for the El Refugio-La Soledad composite sample and process flow sheet.

 – Process flow sheet detail proposed for the El Refugio-La Soledad resource, typical of other properties in the Sierra Madre Trend with similar geology

Further metallurgical test work will allow the crushing, grinding, thickening, flotation and filtration equipment sizes to be determined.

 – Schematic long section of the Copalquin District middle mineralised trend shown in in Figure 2, which includes the maiden JORC resource at El Refugio/La Soledad

 – Summary of the flotation and the flotation product cyanide leaching recoveries giving the final gold and silver recoveries to solution.

Intensive cyanide leaching of the flotation concentrate and low-level cyanide leaching of the flotation tailings allows high recovery of silver to be achieved. Cyanide leaching of silver is slower under the typical conditions used for gold only leaching. Recovering a high proportion of the silver into a concentrate (by flotation or gravity) allows the concentrate to leached under intensive conditions resulting in higher silver recovery. The overall recovery to solution is 96.5% for gold and 91% for silver. Gold and silver would be extracted from solution using the widely used Merrill-Crowe zinc precipitation method and then smelted to produce metal gold-silver ingots.

The process flowsheet for El Refugio-La Soledad resource material being tested is as shown below in Figure 8 and Figure 9. This is a similar flowsheet used at similar deposits in the Sierra Madre Trend, Mexico including Coeur Mining’s Palmarejo and SilverCrest Metals’ Las Chispas (under construction).

A metallurgical test work program following the maiden mineral resource estimate (MRE) was completed by SGS Laboratories. (

) Building on Mithril’s excellent high-grade gold and silver maiden mineral resource estimate (

), the high recoveries of gold and silver from the flotation and leaching test work reinforce attractive project metrics for the district.

The sample used for the test work is a composite sample from El Refugio crushed drill core. The average grade of the composite is similar to the average grade of the maiden resource estimate. The calculated composite grade from the flotation test work is 4.52 g/t gold and 124 g/t silver.

Flotation test work has been completed using the same reagent scheme determined for the Palmarejo deposit (located in the Sierra Madre Trend and north of the Copalquin District) test work, due to the similarities in geology and mineralogy between Palmarejo and El Refugio at Copalquin.

The preferred conceptual exploration access – mine design was constructed, and sequence animated based on:

Twin mine area accesses from twin southern adits connected to a valley-to-valley exploration access developed in the footwall of the El Refugio orebody. A separate eastern adit exploration access is developed in the footwall of the Soledad orebodies with maximum access gradient reduced to 1:8,

Primary infrastructure developed off the exploration access, with primary infrastructure positioned within the footwall.

Mine access layout based on Avoca benching with rockfill.

Mine design to avoid ventilation raises to surface, provide a cost-efficient flow-through primary ventilation circuit as soon as possible and provide emergency secondary egress as soon as possible within the mine plan.

Figure 6 provides an isometric view of the mechanised Avoca bench with rockfill mine design and in Figure 7, a plan view is shown.

 – Isometric view of the conceptual mine plan for El Refugio-La Soledad

 – The Copalquin gold-silver district is located in Durango State, Mexico within the Sierra Madre Gold-Silver Trend both home to numerous projects and mines with many large North American mining companies active in the region

Mithril Silver and Gold is currently progressing a fully funded drill program in the Copalquin District following its successful maiden JORC resource estimate delivered in November 2021 after only 15 months of drilling and with an all-in discovery cost of USD14.30 per ounce gold equivalent.*

Maiden JORC Mineral Resource Estimate summary:

2,416,000 tonnes @ 4.80 g/t gold, 141 g/t silver (6.81g/t AuEq*) for 373,000 oz gold plus 10,953,000 oz silver (Total 529,000 oz AuEq*) using a cut-off grade of 2.0 g/t AuEq*

28.6% of the resource tonnage is classified as indicated

 70km2 (10km E-W by 7km N-S) and includes dozens of historic mines and workings.

 Durango State, Mexico, 4 hour drive north of the city of Culiacan and 8 hour drive SSW from the city of Chihuahua via highway 24.

The town of El Durazno is located approximately 20km east of the District. The Copalquin airstrip is serviced several times daily from Tamazula (15 minutes) and Culiacan (30 minutes).

 – Schematic long section of the Copalquin District south line of historic workingsSchematic long section of the Copalquin District south line of historic workings

In early March 2022, the Company released details on the recently completed conceptual mining study by AMC Consulting. (

) This study and the recently reported high metallurgical recoveries (

) are seen as positive steps towards development in the district for production of gold and silver from high-grade resources defined at the El Refugio–La Soledad.