THE SHAFTER SILVER MINE: A NEW ERA OF SILVER MINING IN TRANS PECOS TEXAS

The Shafter Silver Mine, located 20 miles north of Presidio, Texas and adjacent to the Chinati Mountain Volcanic Field, is geologically similar to carbonate replacement deposits in northern Mexico. The Shafter orebody is an epithermal Ag-Pb-Zn system that occurs as manto-type orebodies at the top of the Permian-age Mina Grande Formation. Strong oxidation, to depths exceeding 900 feet, characterizes the orebody with minor amounts of relic sulfide. The silver-bearing phases include native silver, chlorargyrite, acanthite, and argentiferous jarosite (?).

From 1883 to 1942, the Shafter area produced over 35 million ounces of silver. The Shafter deposit, discovered by Gold Fields Mining Corporation in the late 1970s, represents the northeastern down-dip extension of a 2-mile long mineral trend. In 2008, Aurcana Corporation acquired the Shafter Project from Silver Standard Resources with the purpose of developing a 1500-ton per day underground mine. At a cut-off grade of 4 ounces per ton silver the mine contains an estimated measured and indicated resource of 25 million ounces silver and another 23 million ounces of silver in the inferred category. Based on the current resource model, the Shafter Silver Mine has an expected mine life of 5 to 10 years.

The development of a 5000-foot decline to access the Shafter orebody is in progress and on schedule with initial silver production beginning in 2012. The mining method will be open stope with random pillars using a mine fleet of 10-ton loaders and 30-ton haul trucks. There is sufficient storage capacity in the old stopes for waste rock disposal, thus eliminating the need to haul all the waste rock to the surface. A processing plant is currently under construction and will treat 525,000 tons of ore per year. Ore will be crushed to a -3/8” and milled to 80% passing -200 mesh. The mill overflow will be thickened to ~45% solids and transferred to a set of agitated cyanide leach tanks. The leach slurry will be filtered to recover the pregnant leach solution and for washing the tails. The tails will be dry stacked in a designated disposal area in accordance with the Texas Commission on Environmental Quality requirements. The filtered pregnant leach solution will report to a Merrill-Crowe circuit for Au-Ag precipitation. Mine dewatering will meet the water requirements for the ore processing facility.