NI 43-101 TECHNICAL REPORT FOR THE COYOTE PROJECT

NI 43-101 TECHNICAL REPORT
FOR THE
COYOTE PROJECT
STATE OF JALISCO,
MEXICO
Prepared For:
ARGENTUM SILVER CORP.
570 Granville Street – Suite 1200
Vancouver, BC Canada
V6C 3P1
Prepared By:
James R. Robinson, C.P.G.
July 12, 2013
TABLE OF CONTENTS
PAGE
TABLE OF CONTENTS ................................................................................................................................ 2 LIST OF FIGURES........................................................................................................................................ 2 LIST OF TABLES.......................................................................................................................................... 3 1 SUMMARY ............................................................................................................................................ 4 2 INTRODUCTION................................................................................................................................... 5 3 RELIANCE ON OTHER EXPERTS ...................................................................................................... 5 4 PROPERTY DESCRIPTION AND LOCATION..................................................................................... 6 4.1 Property Location .......................................................................................................................... 6 4.2 Property Description...................................................................................................................... 8 4.3 Other property interests .............................................................................................................. 10 4.4 Environmental Liabilities ............................................................................................................. 10 4.5 Permits for exploration ................................................................................................................ 10 5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY 11 5.1 Accessibility................................................................................................................................. 11 5.2 Climate ........................................................................................................................................ 11 5.3 Local Resources and Infrastructure ............................................................................................ 11 5.4 Physiography............................................................................................................................... 11 6 HISTORY ............................................................................................................................................ 12 7 GEOLOGICAL SETTING AND MINERALIZATION ............................................................................ 14 7.1 Regional Geology........................................................................................................................ 14 7.2 Property Geology ........................................................................................................................ 15 7.3 Mineralization .............................................................................................................................. 18 8 DEPOSIT TYPES................................................................................................................................ 20 9 EXPLORATION................................................................................................................................... 21 10 DRILLING........................................................................................................................................ 28 11 SAMPLE PREPARATION, ANALYSES AND SECURITY.............................................................. 39 12 DATA VERIFICATION .................................................................................................................... 41 13 MINERAL PROCESSING AND METALLURGICAL TESTING....................................................... 42 14 MINERAL RESOURCE ESTIMATE................................................................................................ 42 23 ADJACENT PROPERTIES ............................................................................................................. 42 24 OTHER RELEVANT DATA AND INFORMATION .......................................................................... 42 25 INTERPRETATION AND CONCLUSIONS..................................................................................... 42 26 RECOMMENDATIONS................................................................................................................... 43 27 REFERENCES................................................................................................................................ 45 28 CERTIFICATES AND CONSENTS OF QUALIFIED PERSONS.................................................... 46 LIST OF FIGURES
Figure 1. Coyote Project Location................................................................................................................ 6 Figure 2. Coyote Project Location Detail ..................................................................................................... 7 Figure 3. Coyote Project Concessions......................................................................................................... 8 Figure 4. Coyote Project surface land ownership ........................................................................................ 9 Figure 5. Typical access roads, topography, and vegetation .................................................................... 12 Figure 6. Looking west through El Chilacayote; Argentum house rental in El Chilacayote with recycle bins
.................................................................................................................................................................... 12 Figure 7. Typical open stope working; Open stope with inaccessible workings along portion of the El Tajo
Vein ............................................................................................................................................................. 13 Figure 8. Plan map of mine workings on the Coyote Project..................................................................... 13 Figure 9. Regional Geology ....................................................................................................................... 15 Figure 10. Project Geology ......................................................................................................................... 16 Figure 11. Coyote Project Stratigraphic Column......................................................................................... 17 Figure 12. Structures and veins on the Coyote Project ............................................................................. 18 Figure 13. Typical vein quartz textures. ..................................................................................................... 20 Figure 14. Mineralized zones on the Coyote Project ................................................................................. 21 2
Figure 15. Surface rock chip samples taken by Argentum on the Coyote Project .................................... 23 Figure 16. Trench samples taken by Argentum on the Coyote Project ..................................................... 25 Figure 17. Samples taken by Argentum in historic workings on the Coyote Project. ................................ 26 Figure 18. Magnetic survey of the Coyote Project ..................................................................................... 28 Figure 19. Drill Hole Locations ................................................................................................................... 31 Figure 20. El Tajo Zone drill holes ............................................................................................................. 36 Figure 21. Longitudinal section of the El Tajo Zone .................................................................................. 37 Figure 22. Section 2012-1 and 2012-31, El Tajo Zone.............................................................................. 38 Figure 23. Section 2012-3 and 2012-26, El Tajo Zone.............................................................................. 38 Figure 24. Section 2012-4 and 2012-32, El Tajo Zone............................................................................... 39 Figure 25. Clockwise from upper left: Core cutting and logging facility; Core photography; Sealed rice
sacks with samples; Core logging............................................................................................................... 41 LIST OF TABLES
Table 1. Coyote Project Concessions.......................................................................................................... 8 Table 2. Argentum Commitments for 100% Acquisition ............................................................................ 10 Table 3. Driving summary from Guadalajara ............................................................................................. 11
Table 4. Surface sampling summary ......................................................................................................... 29 Table 5. Trench location & sample summary............................................................................................. 29 Table 6. Trench assay highlights ............................................................................................................... 29 Table 7. Mine sampling summary .............................................................................................................. 29 Table 8. Drill hole summary ....................................................................................................................... 29 Table 9. Drill holes completed in mineralized zones.................................................................................. 30 Table 10. Reflex drill hole survey summary ............................................................................................... 32 Table 11. Drill hole interval summary......................................................................................................... 33 Table 12. Rock sample locations ............................................................................................................... 39 Table 13. Standards used for the Coyote Project...................................................................................... 40
Table 14. Proposed third phase drilling program. El Tajo Zone..................................................................43
Table 15. Proposed budget third phase drilling program. El Tajo Zone......................................................44
3
1
SUMMARY
Property Description and Location
The Coyote property lies approximately 145 kilometres southwest of the capital city of Guadalajara, and
90 kilometres southeast of Puerto Vallarta within the state of Jalisco. The property is located within the
municipalities of Cuautla and Ayutla. Coyote is centered at approximately 538,800mE and 2,225,665mN
(UTM Zone 13N, WGS84 Datum). It is within the INEGI 1:50,000 quadrangle F13-D52.
Ownership
The Coyote project consists of 5 contiguous concessions totalling 1053 hectares. In April of 2011,
Argentum entered into an option agreement to acquire 100% of Soltoro’s Coyote Project as well as the
Victoria Project under one consolidated agreement. Argentum’s agreement required paying
CDN$255,000 in total cash payments, issuing an aggregate 5,000,000 common shares of Argentum and
spending a total of CDN$1.1 million on exploration over 2 years. Argentum exercised the option in 2012.
Soltoro retains a 3% NSR interest in each project whereby 1% can be purchased for US$1.5 million to a
maximum of 2% for each project. Based on records provided to the author, all obligations to Soltoro have
been satisfied, and 100% ownership and any underlying agreements have been transferred to Argentum.
Surface rights within the project area are held by the Ejido Chilacayote and two private ranches owned by
one family. The Ejido and private land owner each control approximately 50% of the project area.
Argentum has permission from both surface owners to conduct exploration activities including
construction of roads and trenches as well as drilling programs.
History
The district has moderate historical production and exploration beginning in colonial periods. Over 100
mine workings have been mapped within the project area. Production levels are unknown, but were
limited due to underground water conditions. An unknown company processed high grade dump material
in the 1980’s. Portions of the district were explored by Minera Lluvia de Oro, S.A. de C.V. in 1999. They
drilled 20 RC holes totalling 1981 metres. Minera Lluvia de Oro drilled 19 holes within the La Valencia
claim (southern end of the project area), and one near attempting to test El Tajo. The author does not
have the drill assays, but it is assumed drill results did not merit continuation with the project. The
property was explored by Soltoro Ltd. beginning in 2007, with programs including geologic mapping and
rock chip sampling.
Recent Exploration
Argentum basic exploration activities included geologic mapping and rock chip sampling. Many of the
historic workings were rehabilitated and mapped and sampled. Argentum has completed 42 diamond drill
holes totalling 4,842.4 metres. The drilling was divided into two phases. Phase 1 consisted of 25 holes
drilled between January and March 2012. Phase 2 consisted of 17 holes drilled during September and
October of 2012.
Geology & Mineralization
The project lies within the east-west oriented Trans-Mexican Volcanic Belt geologic province. Host rocks
within the project area are andesitic tuffs and flows, dated by the Servicio Geológico Mexicano (SGM) as
upper Cretaceous. These rocks are overlain outside the project area by rhyolitic pyroclasitcs, which range
in age from upper Cretaceous to Paleocene. A small unaltered diorite intrusive outcrop has been mapped
intruding andesite in the eastern portions of the project. An andesite porphyry has been observed several
kilometres west of the project. There is no current indication of a relationship between mineralization and
these intrusives.
The Coyote project controls the majority of the historic San Miguel de la Sierra mining district. Coyote is
an early stage exploration project, that contains dozens of epithermal low sulfidation vein systems and
stockwork zones with strong silver values with significant credits in gold, lead and zinc. Most of the veins
lie within seven defined structurally controlled belts occurring over an area of approximately 1.5 x 2.6
kilometres. Mineralization as exposed at surface is at a high level in the epithermal system, and contains
classic quartz textures. Individual vein strike lengths have been mapped up to nearly 1 kilometre. Vein
4
widths typically range from 1 to 5 metres, with vein dips generally steeply to the west. Several zones of
quartz stockworking and silica replacement have been mapped, with widths exceeding 35 metres.
Mineral Resource Estimation
The information available for the Coyote property is not sufficient to undertake an estimation of a resource
or mineral reserve compliant with National Instrument NI 43-101 ("NI 43-101" or "43-101") standards.
Conclusions
The Coyote project controls most of a significant historic mining district having dozens of epithermal low
sulfidation vein systems occurring in Cretaceous - Tertiary volcanic rocks. The veins locally have strong
silver values and significant credits in gold, lead and zinc. Drilling programs completed to date have
tested portions of four vein systems, but with a focus on the El Tajo zone with 25 holes. Shallow drilling
on the La Florida, Bocancha and La Colorada zones returned mixed but generally negative results.
Drilling on the El Tajo zone reported encouraging results, demonstrating a good continuity of
mineralization over a tested strike length of approximately 500 metres.
Recommendations
Future exploration programs should include additional drilling and data collection of the El Tajo zone with
the objective of calculating an Inferred 43-101 resource. The drilling program should be designed to
further test El Tajo along strike and currently unexplored depths, as well as additional drilling in other
untested vein systems.
2
INTRODUCTION
At the request of Mr. Warren McIntyre, President and CEO of Argentum Silver Corp., James Robinson,
Consulting Geologist, was retained as a Qualified Person to prepare a Technical Report on the Coyote
Project. The Report is prepared according to the standards dictated by NI 43-101 and Form 43-101F
(Standards of Discloser for Mineral Projects). Argentum is a public company listed on the TSX Venture
exchange, with its head office in Vancouver, Canada. The Company has a wholly owned Mexican
subsidiary Plata de Argentum, S.A. de C.V.
Sources of Information
This report is based on information known and acquired by Argentum's field office and exploration
personnel.
Personal Inspection
The author worked as a consultant for Argentum Silver Corp. from July 2011 through March 2012, and
supervised exploration programs at the project including the first phase of drilling.
3
RELIANCE ON OTHER EXPERTS
James Robinson (C.P.G.) is responsible for the preparation of all sections of the report. The information,
conclusions and opinions contained herein are based on:
•
Information available to the author at the time of preparation of this report,
•
Assumptions, conditions and qualifications as set forth in this report, and
•
Data, reports and other information supplied by Argentum and its representatives.
Supervision of the second phase of drilling was overseen by Paul Cowley, P.Geo., the Company's Senior
Geological Consultant and Advisor, and a Qualified Person under NI 43-101. Database management of
geological and assay data and the implementation and evaluation of QA/QC protocols were overseen by
Juan Lopez, General Manager for Plata de Argentum S.A de C.V. (Argentum's wholly owned Mexican
subsidiary.
5
4
PROPERTY DESCRIPTION AND LOCATION
4.1 Property Location
The Coyote Property is located within the municipalities of Cuautla and Ayutla, within the state of Jalisco
(Figures 1 and 2). The property is centered at approximately 538,800mE and 2,225,665mN (UTM Zone
13N, WGS84 Datum). It is within the INEGI 1:50,000 quadrangle F13-D52.
Figure 1. Coyote Project Location
6
Figure 2. Coyote Project Location Detail
7
4.2 Property Description
The Coyote project consists of 5 contiguous concessions totaling 1053 hectares (Figure 3). One of the
concessions is wholly owned by Argentum, and the other 4 are controlled by option agreements between
Argentum and the underlying concessionaire (Table 1).
Figure 3. Coyote Project Concessions
Table 1. Coyote Project Concessions
Lote
Titulo
Exp
Hectares
Owner
El Tajo
216365
045/15337
163.17
Armando Ibarra Amaya
El Tajo lll Fracc l
226878
045/15723
12.51
Armando Ibarra Amaya
El Tajo lll Fracc ll
226879
045/15723
12.75
Armando Ibarra Amaya
La Valenciana
185386
321.1/3-141
12.00
Armando Ibarra Amaya
Xela
231222
045/16512
852.75
Plata de Argentum, S.A. de C.V.
Total
1053.17
Surface rights within the project area are held by the Ejido Chilacayote and two private properties owned
by the same owner known as El Parnaso Ranch and Santa Barbara Ranch (Figure 4). The Ejido and
private land each control approximately 50% of the project area. Argentum has permission from both
8
surface owners to conduct exploration activities including construction of roads and trenches as well as
drilling programs.
Figure 4. Coyote Project surface land ownership
In April of 2011, Argentum entered into an option agreement to acquire 100% of Soltoro’s Coyote project
as well as the Victoria project under one consolidated agreement. Argentum’s agreement required paying
CDN$255,000 in total cash payments, issuing an aggregate 5,000,000 common shares of Argentum and
spending a total of CDN$1.1 million on exploration over 2 years. Argentum exercised the option in 2012.
Soltoro retains a 3% NSR interest in each project whereby 1% can be purchased for US$1.5 million to a
maximum of 2% for each project. Argentum is obligated to take over payments with underlying
concessionaires under pre-existing agreement with Soltoro (Table 2).
9
Table 2. Argentum Commitments for 100% Acquisition
Date
Description
US $ (+IVA)
Non refundable
payment
Canadian $
(note 1)
Shares
NSR
35,000
Status
Completed
4/25/2011
Closing payment
100,000
1,500,000
Completed
4/25/2012
120,000
3,500,000
Completed
4/25/2013
1st Year payment
1st year
exploration
commitment
2nd year
exploration
commitment
12/10/2011
advance
"royalties" coyote
40,000
Completed
12/10/2012
advance
"royalties" coyote
25,000
Completed
12/10/2013
advance
"royalties" coyote
25,000
12/10/2014
advance
"royalties" coyote
25,000
4/25/2012
TOTAL
350,000
Completed
750,000
Completed
NSR Argentum to
Soltoro (note 2)
3%
Underlying
Royalties (note 3)
2%
200,000
1,355,000
5,000,000
5%
note 1: Mexican IVA of 16% to be included if agreement registered at Mexico Dir. De Minas
note 2: up to 2% can be bought for $1.5M / 1% for each property - Victoria & Coyote)
note 3: Soltoro has underlying option to buy-out NSR at rate of US $400,000 + IVA for each 1%
4.3 Other property interests
To the knowledge of the Author, there are no underlying interests, back-in rights, payments, or other
agreements on the Property.
4.4 Environmental Liabilities
There are mine workings, and mine dumps and other significant natural within the project area. However,
the Property is not subject to any liabilities due to previous mining activities that may impact future
development of the Property.
4.5 Permits for exploration
To the Author’s knowledge, Argentum currently holds all necessary permits that are required to conduct
exploration on the Property.
10
5
ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY
5.1 Accessibility
The Coyote Project lies approximately 145 kilometres southwest of the capital city of Guadalajara, and 90
kilometres southeast of Puerto Vallarta. Access is via paved roads from either city, and roughly
equidistant for an approximate 4 hour driving time from either Puerto Vallarta or Guadalajara. Total road
distance from Guadalajara is 190 kms, with 160 kms of paved highway and the last 30 kms of dirt road in
excellent condition (Table 3).
Table 3. Driving summary from Guadalajara
Kms
Location
0
39
Guadalajara
4 lane highway
56
Cocula
95
Tecolotlan
108
Juchitlan
115
Colotitlan
126
San Clemente
139
Ayutla
152
Cuautla
159
Tierras Blancas
190
El Chilacayote
5.2 Climate
The climate is very pleasant and typical of moderately high altitude sierra. There is a heavy rainy season
that extends from July through September. October brings occasional Pacific-born tropical depressions
and rare hurricanes. Temperatures are generally very pleasant. Daytime temperatures highs typically
range from about 15 in the winter up to 30 C just before the commencement of the rainy season. Winter
evenings can reach below 0 C. Snow is very rare, but has been recorded.
5.3 Local Resources and Infrastructure
El Chilacayote is the local town near the project, and has an estimated 400 residents. It is a very pleasant
town, with the economy primarily based on farming and cattle. Locals are overwhelmingly pro-mining, and
hopeful of eventual development of the district. Infrastructure is exceptionally good. Argentum is offering
part time employment to select locals on an as needed basis for exploration work. Basic supplies are
available within El Chilacayote. The much large town of Ayutla ~51 kms from the project, has hotels,
supermarkets and hardware stores. The Ayutla airstrip is the closest to the project.
Within the project area are numerous dirt roads currently in fair to good condition. These roads were
constructed for mine access, ranching, and the timber industry (Figure 5). A government power line
supplies electricity to the local towns. The Company is renting a modern well equipped house within the
town of El Chilacayote (Figure 6).
5.4 Physiography
Topography is moderate to gentle, with elevations ranging from ~1800 – 2220 metres. There is abundant
flat land near mineralized zones that could easily support a very large scale mining operation.
Groundwater is certainly abundant. Vegetation consists of long needle pine and oak trees (Figure 5). The
11
area has received selective harvesting of old growth pine trees. Open meadows are commonly used for
cattle grazing and farming.
Figure 5. Typical access roads, topography, and vegetation
Figure 6. Looking west through El Chilacayote; Argentum house rental in El Chilacayote
with recycle bins
6
HISTORY
The Coyote project controls the historic San Miguel de la Sierra mining district. Mining activities are poorly
recorded, but assumed to have commenced during colonial times. Mining production was limited and
restricted to near surface due to encountering ground water, and not having any natural drainage or
pumping methods during those times. There have been numerous periods of development and
exploitation; however, the author has no documentation. An unknown company or individual processed
some of the high grade dumps within the last 20 years. There are over 100 mines within the project area,
including shafts, adits, open stopes, large pits and small prospects. All adits are caved at the portals and
currently inaccessible. Most open stopes are deep and dangerous to enter. There are semi-continuous
open stopes over hundreds of metres of strike length along some vein systems (Figures 7 and 8). There
are ruins of a flotation mill near the El Tajo vein system; however, all that remains are foundation walls.
12
Figure 7. Typical open stope working; Open stope with inaccessible workings along
portion of the El Tajo Vein
Figure 8. Plan map of mine workings on the Coyote Project
13
The general area was geologically mapped by the Consejo de Recursos Minerales (CRM) in the 1970’s –
1980’s. Their work also included mapping of mine workings and limited rock chip sampling. The author
has several reports from the CRM on mines in the general area. In 2006 CRM completed 1:50,000
quadrangle programs including geologic mapping, stream sediment sampling and airborne magnetic
surveys.
Portions of the district were explored by Minera Lluvia de Oro, S.A. de C.V. in 1999. The author is in
possession of a summary report, written in Spanish and translated to English. Lluvia de Oro drilled 20 RC
holes totaling 1981 metres. Minera Lluvia de Oro drilled 19 holes within the La Valencia claim (southern
end of the project area), and one hole attempting to test the El Tajo vein. This hole is assumed to have
been terminated before the projected intersection of the vein. The author does not have the drill assays,
but it is assumed drill results did not merit continuation with the project for the low silver prices at that time
(approximately US $5.25/oz.).
In July of 2007 Soltoro staked the 852.75 hectare Xela concession. Soltoro’s exploration programs
included geologic mapping and rock chip sampling. Argentum is in possession of descriptions,
coordinates and assay results for 225 rock chip Soltoro samples. Assay certificates from these samples
are dated 2007 & 2008. In May of 2008, Soltoro entered into an option to purchase 100% of the El Tajo
(including fraction claims) and La Valenciana concessions.
7
GEOLOGICAL SETTING AND MINERALIZATION
7.1 Regional Geology
The project lies within the east-west oriented Trans-Mexican Volcanic Belt (TMVB) geologic province,
named for the Tertiary to Quaternary volcanoes trending east-west over more than 1000 kms from the
state of Veracruz to the Pacific. Although the primarily composition is basalt, the TMVB is locally bi-modal,
with some rhyolite and ignimbrite centers. Much of the province is covered by these younger volcanics
(Figure 9).
The TMVB is superimposed over a Cretaceous volcanic arc, containing a bimodal volcanic series of
andesite, dacite and rhyolite volcanics. The age spans dated by the CRM range from ~110 m.y. to 86
m.y., with andesite generally the older volcanic unit. Paleocene rhyolite volcanic pyroclastics and
ignimbrite are observed in the northeast portion of the 1:50,000 quadrangle.
The eastern fringes of the Puerto Vallarta granodiorite batholith is mapped ~10 kms west of the project
area. These intrusive rocks are dated ~ 88 m.y. and are considered coeval with the andesitic sequence of
the volcanic arc. There is no suspected relationship of the granodiorite with the epithermal mineralization
in the project. Paleocene sub-volcanic hornblende rich andesite porphyry has been observed immediately
west of the project area.
The structural regional geology is complex. There is a closely spaced NW fault set resulting from
Laramide age compression, with common left-lateral strike slip displacement. These faults were
reactivated during Tertiary extensional tectonic deformation resulting in normal displacement. The project
area also contains younger N-NE and N-NW steeply west dipping faults which commonly control vein
mineralization. Rifts are common throughout the state of Jalisco, and may have a tectonic presence in the
project area.
14
Figure 9. Regional Geology (Servicio Geologico Mexicano, 1999: Carta Geologica
Minera, Puerto Vallarta F13-11.)
7.2 Property Geology
The dominant rocks within the project area are andesite tuff and agglomerate (Tiv) dated by the Servicio
Geologico Mexicano as being upper Cretaceous to Tertiary, ranging from ~85 – 115 m.y. The volcanics
are correlated to the Lower Volcanic Complex of the Sierra Madre Occidental. Figures 10 and 11 are a
map of surface geology and a stratigraphic column for the Coyote Project, respectively.
The only intrusives identified to date within the project are several small outcrops of diorite (Tid) intruding
andesite flows in the NE portion of the project. The intrusive is unaltered and has unaffected the andesite.
The diorite is assumed to be related to the Cretaceous Puerto Vallarta granodiorite batholith.
Rhyolite to dacite ignimbrite is mapped in the southeast portion of the project, (Tsv R). This unit hosts vein
mineralization at the San Rafael zone.
Volcanic stratigraphy is rarely measurable, but where evident is close to horizontal. Younger rhyolitic
pyroclastics have not yet been identified on property, but have been observed accessing the project near the
towns of Ayutla and Cuautla.
15
Figure 10. Project Geology
16
Figure 11. Coyote Project Stratigraphic Column
17
There is a significant structural deformation within the project area. Numerous structural patterns have
been mapped on the ground, as well as interpreted from satellite imagery and orthophotos (Figure 12). The
primary fault sets are W-NW striking. These are high angle, with generally left-lateral strike slip
displacement. The W-NW faults are interpreted as the oldest structural set relating to Laramide age
compression. These faults were reactivated during Tertiary extensional tectonic deformation, with normal
displacement. Younger N-NE and N-NW steeply west dipping faults are common within the project, and
commonly control vein mineralization. These faults are related to extensional tectonics. An association of
rifts needs to be considered, since they are common in the central portion of the state of Jalisco.
Figure 12. Structures and veins on the Coyote Project
7.3 Mineralization
Coyote contains numerous silver – gold veins and stockwork deposits, most of which occur within seven
structurally controlled belts. The seven defined belts of mineralization occur over an area of
approximately 1.5 x 2.6 kilometres (Figures 13 and 14). Vein widths typically range from 1 to > 5 metres,
with measured strike lengths up to nearly one kilometre. Stockwork zones have been mapped over widths
exceeding 35 metres. Alteration from meteoric waters is pervasive, but limited to <20 metres below
surface.
18
Silver-gold-lead-zinc mineralization occurs with epithermal quartz veins and stockwork deposits controlled
by pre-existing faults acting as conduits for hydrothermal solutions. No obvious differences in the style or
content of mineralization has been observed within the seven defined belts.
The El Tajo zone has been defined by surface and underground mapping as well as drilling over a strike
length of approximately 500 metres. The zone consists of a central vein, often paralleled by other
subsidiary veins and enveloped by stockwork mineralization. The central vein typically is 1 to 5 metres in
true thickness. Evidence of hydrothermal boiling is frequently evident by banded quartz. The color of the
quartz varies from white to occasionally purple amethyst. Higher silver grades are often, but not always,
associated with visible galena and black sphalerite. Gold is generally low grade, and typically less than
0.5 g/t. Stockwork zones are composed of thin, generally <3 cm wide quartz veinlets of random
orientation.
No mineralogy tests have been performed to date on any core or rock samples. The nature of the silver
mineralization has not yet been determined, but is assumed to be primarily argentite.
19
8
DEPOSIT TYPES
Deposit types are classified as low-sulfidation epithermal veins and stockwork deposits with alteration
assemblages including quartz and clay minerals. Deposits are formed at relatively shallow depths, and
relatively near paleo-surface. Typically these systems have hydrothermal fluids deposited in the range of
150 to 250 degrees C.
Mineralization consists of veins and stockwork deposits containing typical epithermal quartz textures
including chalcedonic / amorphous, vuggy, banded and saccharoidal. Banded quartz textures indicate
being within the boiling zone. There is evidence for multiple events of silica. Although no clay mineralogy
testing has been done to date, suspected alteration products would be adularia, kaolinite and
montmorillonite. Propylitic alteration has not been observed. Alteration halos distal to the veins are
generally minimal. Typically, higher grade zones or "ore shoots" occur in deflections of the vein systems
either along strike or down dip.
Figure 13. Typical vein quartz textures at Coyote.
20
Figure 14. Mineralized zones on the Coyote Project
9
EXPLORATION
Work conducted by Argentum has consisted of geologic mapping and rock chip sampling. Two phases of
drilling have been completed as discussed in subsequent sections. Underground historic mine workings
were reopened where possible, and mapped and sampled. Surface magnetic and IP/Resistivity surveys
were conducted by Geofisica TMC S.A. de C.V. Drill hole collars and numerous survey points were
established by Total Station GPS methods. All data has been incorporated into ArcMap GIS format.
Mapping
Geologic mapping has been nearly completed over a ~2.5 km N-S by 2.0 km N-S portion of the heart of
the district. Mapping has largely been conducted on 1:1000 scale base maps, and has included geology,
mineralization, mine workings, roads and drainages (Figure 10). As well, structural interpretation has
been done from orthophotos and satellite imagery. Argentum established 123 survey points in the field by
contracting a professional surveyor using a transmitting and receiving GPS unit, with X-Y-Z accuracy
indicated at <5 cm. Transmission was done from a government established control point. Detail mapping
is done radiating out from those points by brunton and tape. Regional mapping is done by handheld GPS
units. Accuracy in general is +/- 4 metres.
21
Surface Rock Chip Sampling
Within the seven belts of mineralization, 466 rock chip samples have been taken to date (Figure 15). The
majority of the samples are continuous rock chip samples, with sample widths ranging from 0.3 metres to
10 metres, with an average of 1.9 metres. The average sample weight is 2.4 kg. The following table
summarizes samples results by zone and total project.
Table 4. Surface sampling summary
Mineralized Zone
Bocancha
El Tajo
La Colorada
La Florida
La Valenciana
San Rafael
Other
All
# Samples
61
101
85
97
46
61
15
466
Ave Width
(m)
1.5
2.0
2.1
1.5
2.5
2.3
Silver
(g/t)
108.8
51.1
17.6
58.8
16.8
31.9
Gold
(g/t)
0.15
0.07
0.01
0.13
0.19
0.10
Lead
%
0.1
0.1
0.0
0.1
0.2
0.1
Zinc
%
0.0
0.0
0.1
0.1
0.1
0.1
1.9
47.1
0.10
0.1
0.1
22
Figure 15. Surface rock chip samples taken by Argentum on the Coyote Project
23
Trench Sampling
Argentum excavated 113 trenches; 81 by pick and shove and 32 using a tire mounted backhoe (Figure
16). The trenches were an average of 0.8 metres wide and generally ranging from 1 to 1.5 metres deep.
All were filled after mapping and sampling as per requirements of surface owners and SEMARNAT. The
trenching program was designed to create rock exposures in areas with little geologic information due to
limited outcrop and no mine workings. Trenching was performed in 4 zones.
A total of 438 continuous rock chip samples were taken from the trenches which ranged in length from
3.65 to 48.0 metres. The average sample length was 1.55 metres and defined by geological boundaries.
Sampling was done by continuous rock chip samples to provide weighted averages. Certified standards
were included in the sample stream.
Table 5. Trench location & sample summary
Zone
La Colorada
El Tajo
La Valenciana
Tajo Sur
Total
Trenches
23
27
51
12
113
Samples
121
99
182
36
438
Only 16 of the trench samples reported over 100 g/t silver. Highlights of significant values from trenches
are summarized in the following table.
Table 5. Trench assay highlights
Trench
4
5
56
58
59
64
65
66
70
89
103
107
112
Zone
La Colorada
La Colorada
La Florida
La Florida
La Florida
La Valenciana
La Valenciana
La Valenciana
La Valenciana
La Valenciana
La Florida
La Florida
El Tajo
Width (m)
15
5
1.4
1.2
0.7
1.2
4.5
5.7
2.2
0.8
0.7
0.5
0.6
Ag (g/t)
82.9
187.6
120.0
190.0
199.0
527.0
96.7
172.0
132.5
141.0
111.0
113.0
170.0
Au (g/t)
0.04
0.04
0.38
0.10
0.12
0.30
0.13
0.10
0.28
0.12
0.02
0.77
0.08
Pb %
0.1
0.1
0.4
0.1
0.3
0.1
0.2
0.2
0.1
0.1
0.0
0.2
0.1
Zn %
0.0
0.0
0.2
0.1
0.2
0.1
0.1
0.1
0.0
0.0
0.0
0.1
0.0
24
Figure 16. Trench samples taken by Argentum on the Coyote Project
25
Underground Mine Mapping and Sampling
Argentum hired professional contract miners to open historic mine workings were feasible. The mine
workings and geology were mapped by Argentum. Argentum took 187 rock chip samples from within the
underground workings (Figure 17).
Figure 17. Samples taken by Argentum in historic workings on the Coyote Project.
26
Average sample lengths and grades of continuous rock chip samples are summarized in the following
table. The table indicates specific mine workings within mineralized zones. Samples were taken
perpendicular to the strike of the veins. Due to limited exposure within mine workings, the samples do not
always represent the true width of the zone of mineralization.
Table 5. Mine sampling summary
Mineralized Zone
El Tajo
"
"
La Colorada
La Florida
La Valenciana
"
"
San Rafael
"
"
"
"
"
Mine Working
Crucero El Tajo 1
Crucero El Tajo 2
El Tajo Norte Shaft
Mina La Colorada
Mina La Florida
Mina La Valenciana
Obra Minera
Tiro 2
Mina San Rafael 1
Mina San Rafael 2
Mina San Rafael 3
Mina San Rafael 4
Mina San Rafael 5
Mina San Rafael 6
#
Samples
21
13
3
20
38
8
3
5
35
1
1
6
31
2
Ave
Width (m)
1.3
1.4
1.7
1.4
1.4
1.6
2.0
1.6
1.2
0.9
1.0
1.3
1.3
0.9
Ave
Silver
(g/t)
172.7
65.6
52.2
152.0
161.7
258.0
23.6
25.0
203.8
239.0
409.0
365.5
34.7
301.5
Ave
Gold
(g/t)
0.53
0.08
0.37
0.12
0.12
0.37
0.03
0.25
0.14
0.99
0.08
0.11
0.50
2.03
Ave
Lead
%
0.5
0.1
0.2
0.2
0.3
0.7
0.7
0.3
0.1
0.3
0.1
0.2
0.7
0.4
Ave
Zinc
%
0.7
0.3
0.1
0.1
0.5
0.5
0.2
0.1
0.2
0.3
0.1
0.1
1.5
1.6
27
Geophysics
Ground geophysical surveys consisting of Total Field magnetometer and high-power Time-Domain
Induced Polarization (I.P. / Resistivity) were contracted by Geofisica TMC S.A. de C.V. Geofisica ran
sixteen 1,100 meter E-W lines across the property. Dipole separation was 100 metres which in theory
should be able to detect large volumes of metallic sulphide mineralization to depths of 175-250 metres. A
summary report by Gerard Lambert Geosciences concluded that the magnetic environment is “quiet” and
that two possible zones of slightly increased I.P. effect might have been detected. The author does not
see any correlation of I.P. / Resistivity “anomalies” with known veins or structures (Figure 18).
Figure 18. Magnetic survey of the Coyote Project
10 DRILLING
Argentum has completed two phases of diamond drilling totaling 4824.4 metres within the Coyote
property. The first phase consisted of 25 holes totaling 3967.3 metres from January 2012 - March 2012.
The second phase of drilling consisted of 17 holes totaling 875.15 metres from September 2012 - October
2012. Table 4 summarizes this drilling, and the collars and traces are shown in Figure 19.
28
Table 8. Drill hole summary
HOLE_ID
Zone
E_WGS84
N_WGS84
2012-1
El Tajo
538967.40
2225579.50
2012-2
El Tajo
538941.62
2225489.13
2012-3
El Tajo
538941.89
2012-4
El Tajo
2012-5
El Tajo
2012-6
Elev (m)
AZ
Dip
2152.90
100
-60
2126.59
100
-65
2225412.55
2108.98
100
538954.31
2225366.96
2099.17
538922.82
2225289.34
2111.99
El Tajo
538890.07
2225237.21
2012-7
El Tajo
538890.41
2012-8
La Florida
538723.09
2012-9
La Florida
2012-10
2012-11
Start Date
End Date
109.3
28-Jan-12
30-Jan-12
109.0
31-Jan-12
1-Feb-12
-55
92.3
2-Feb-12
3-Feb-12
100
-60
72.5
4-Feb-12
4-Feb-12
100
-60
87.9
5-Feb-12
6-Feb-12
2130.37
100
-60
127.4
8-Feb-12
13-Feb-12
2225168.73
2136.52
100
-60
115.4
13-Feb-12
15-Feb-12
2225134.87
2156.76
255
-50
142.8
16-Feb-12
18-Feb-12
538578.82
2225225.96
2159.41
75
-50
112.3
19-Feb-12
20-Feb-12
El Tajo
538868.06
2225123.06
2144.90
100
-60
133.8
21-Feb-12
22-Feb-12
La Florida
538681.79
2225255.15
2171.94
255
-45
76.3
23-Feb-12
24-Feb-12
2012-12
La Florida
538626.95
2225162.88
2148.85
75
-45
61.0
24-Feb-12
25-Feb-12
2012-13
La Florida
538551.86
2225286.33
2171.88
75
-50
115.9
25-Feb-12
26-Feb-12
2012-14
La Florida
538545.69
2225385.08
2185.75
75
-50
97.6
27-Feb-12
28.Feb-12
2012-15
Bocancha
538245.68
2225412.30
2180.64
120
-50
85.4
28-Feb-12
1-Mar-12
2012-16
Bocancha
538181.16
2225319.49
2175.50
120
-50
106.8
1-Mar-12
10-Mar-12
2012-17
La Colorada
539028.65
2226399.67
2210.30
75
-50
115.9
2-Mar-12
4-Mar-12
2012-18
La Colorada
539024.16
2226351.83
2213.87
75
-50
146.4
4-Mar-12
6-Mar-12
2012-19
La Florida
538513.92
2225466.84
2193.29
75
-60
109.8
7-Mar-12
8-Mar-12
2012-20
Bocancha
538234.98
2225219.81
2193.24
300
-60
119.0
10-Mar-12
13-Mar-12
2012-21
Bocancha
538188.27
2225170.33
2211.85
120
-50
100.7
13-Mar-12
14-Mar-12
2012-22
El Tajo
538941.94
2225442.75
2119.76
100
-65
109.8
15-Mar-12
16-Mar-12
2012-23
El Tajo
538963.75
2225531.90
2143.56
100
-65
107.9
16-Mar-12
17-Mar-12
2012-24
El Tajo
538970.93
2225625.43
2162.32
100
-65
125.1
17-Mar-12
22-Mar-12
2012-25
La Colorada
539160.50
2226192.41
2149.89
75
-55
109.8
22-Mar-12
24-Mar-12
2012-26
El Tajo
538933.40
2225416.16
2109.51
100
-65
118.6
12-Sep-12
14-Sep-12
2012-27
El Tajo
538921.39
2225446.79
2118.24
100
-60
124.3
14-Sep-12
16-Sep-12
2012-28
El Tajo
538964.07
2225484.57
2125.83
100
-65
85.4
16-Sep-12
17-Sep-12
2012-29
El Tajo
538936.56
2225462.37
2123.05
100
-65
131.2
18-Sep-12
19-Sep-12
2012-30
El Tajo
538949.00
2225536.33
2140.39
100
-70
140.3
19-Sep-12
20-Sep-12
2012-31
El Tajo
538935.29
2225588.27
2151.38
100
-65
158.6
21-Sep-12
22-Sep-12
2012-32
El Tajo
538929.13
2225375.42
2097.63
100
-65
139.6
22-Sep-12
23-Sep-12
2012-33
El Tajo
538927.73
2225396.16
2102.32
100
-70
103.7
24-Sep-12
24-Sep-12
2012-34
El Tajo
538901.36
2225437.14
2112.93
100
-70
146.5
25-Sep-12
26-Sep-12
2012-35
El Tajo
538940.58
2225506.30
2128.33
100
-70
129.6
26-Sep-12
27-Sep-12
2012-36
El Tajo
538851.16
2225176.36
2147.71
100
-60
147.0
27-Sep-12
8-Oct-12
2012-37
La Colorada
539028.57
2226402.96
2210.17
75
-65
154.6
29-Sep-12
1-Oct-12
2012-38
La Colorada
538984.39
2226537.08
2210.50
75
-60
87.5
1-Oct-12
2-Oct-12
2012-39
La Colorada
538953.21
2226587.51
2215.70
75
-60
87.6
3-Oct-12
4-Oct-12
2012-40
El Tajo
538884.91
2225205.53
2132.36
100
-70
134.2
5-Oct-12
6-Oct-12
2012-41
El Tajo
538888.24
2225240.39
2130.13
85
-70
137.3
6-Oct-12
7-Oct-12
2012-42
El Tajo
538926.91
2225374.03
2097.52
135
-65
127.1
7-Oct-12
8-Oct-12
TOTAL
Depth (m)
4,842.4
29
The 42 diamond drill holes tested portions of four different vein zones, focusing on the El Tajo zone. The
number of drill holes on each zone is tabulated in table 5.
Table 9. Drill holes completed in mineralized zones
Zone
# Holes
El Tajo
25
La Florida
7
Bocancha
4
La Colorada
Total
6
42
30
Figure 19. Drill Hole Locations
31
Down Hole Survey Methodology
The drilling contractor for both phases of drilling was Major Drilling de Mexico, S.A. de C.V., using a UDR
200 rig. Drill core was primarily HQ. Down hole REFLEX surveys were performed with an EZ-Track on
most drill holes. Survey depths were variable, but included 70 metres, vein intersections and at the hole
bottom (Table 6).
Table 10. Reflex drill hole survey summary
Hole_ID
Depth (m)
Azimuth
Dip
2012-1
81
98
-60.7
2012-2
109
101.7
-65.9
2012-3
92.3
102.1
-53.2
2012-8
121.4
261.3
-51.2
2012-10
133.8
102.8
-59.6
2012-11
76.3
256.5
-45.3
2012-12
61
74.6
-44.4
2012-13
115.9
76.2
-50
2012-14
97.6
73.3
-48.5
2012-15
82.4
118.1
-50.1
2012-16
106.8
123.3
-49.5
2012-17
115.9
79.6
-49.8
2012-18
146.4
78.1
-48.2
2012-19
109.8
76.2
-60.3
2012-20
119
304.7
-60.1
2012-21
100.7
127.6
-51.4
2012-22
109.8
96.1
-63
2012-23
107.9
105.6
-64.6
2012-24
125.1
104.3
-64.6
2012-25
109.8
69.4
-55.7
2012-26
70
97.5
-65.1
2012-26
118.6
97.7
-65.1
2012-27
70
100.1
-60.8
2012-27
124.3
100.8
-60.1
2012-28
85.4
98.1
-65.5
2012-29
70
101
-64.6
2012-29
131.2
103
-63.7
2012-30
70
102.8
-68.3
2012-30
140.3
104.3
-67.6
2012-31
70
89.9
-64.3
2012-31
158.6
104
-62.7
2012-32
70
101.7
-63.3
2012-32
139.6
104
-63.3
2012-33
70
99
-71.4
2012-33
103.7
98.3
-70.9
2012-34
70
100.6
-70.3
2012-34
146.5
102.9
-71
2012-35
70
100.6
-70.6
2012-35
129.6
101.9
-70.5
2012-37
70
74.3
-66
32
Hole_ID
Depth (m)
Azimuth
Dip
2012-37
154.6
74.8
2012-38
41
73
-59.6
2012-39
41
73.8
-61.6
2012-39
87.6
73
-61.7
2012-40
70
81.5
-70.7
2012-40
134.2
83.3
-70.5
-65.7
2012-41
70
86
-70.1
2012-41
135.3
86.3
-69.3
2012-42
70
137.9
-64.4
2012-42
127.1
139.4
-64.2
Collar Survey Methodology
Argentum contracted a licensed surveyor to survey x-y-z coordinates for all drill collars using a total
station GPS. The datum used is WGS84.
Drill Core Protocols
Core logging on drill holes was done to industry standards by Argentum staff geologists, supervised by a
Q.P., depicting all down-hole data. All information was recorded on hand written logs and transferred to
Excel spreadsheets. Lithologic logs included:
 Lithology identification and contacts
 Description of geology
 Alteration
 Structure
 Recovery
 Rock Quality Designation (RQD)
Argentum staff maintains a folder of photographs for each drill hole, including:
 Photos of proposed drill site prior to pad and access construction
 Photos during the pad and access construction
 Photos while drilling
 Photos of the drill site after drill hole completed
 Photos of core in core boxes
 Photos of the drill collar and concrete marker with hole plugged
 Photos of the settling ponds
Assays
Assays were performed on visually altered and mineralized core, with intervals summarized in Table 7.
Table 11. Drill hole interval summary
Hole ID
2012-1
Zone
El Tajo
From
(m)
75.70
To
(m)
Interval
(m)
81.80
Silver
(g/t)
6.10
127.8
workings
81.80
84.85
3.05
84.85
86.80
1.95
Gold
(g/t)
0.21
Lead
%
0.1
Zinc
%
0.1
58.0
0.03
0.0
0.1
2012-2
El Tajo
97.00
99.80
2.80
180.4
1.00
2.9
5.9
2012-3
El Tajo
68.00
73.50
4.70
1377.4
0.52
0.6
1.0
includes
70.00
72.00
2.00
2745.0
0.83
1.3
2.1
72.00
72.80
0.80
workings
and
72.80
75.00
2.20
300.0
0.17
0.1
0.1
and
33
Hole ID
Zone
From
(m)
To
(m)
Interval
(m)
Silver
(g/t)
Gold
(g/t)
Lead
%
Zinc
%
2012-4
El Tajo
47.60
50.60
3.00
311.8
0.60
0.2
0.4
2012-5
El Tajo
72.00
76.40
4.40
43.4
0.25
0.7
1.0
2012-6
El Tajo
100.80
101.80
1.00
143.0
0.31
0.6
2.0
2012-7
El Tajo
13.60
16.10
2.50
403.0
0.19
0.2
0.1
El Tajo
76.60
79.00
2.40
900.0
0.45
0.3
1.0
76.60
77.80
1.20
1645.0
0.65
0.2
1.4
includes
2012-8
La Florida
NSV
2012-9
La Florida
2012-10
El Tajo
2012-11
La Florida
2012-12
La Florida
45.50
2012-13
La Florida
107.50
2012-14
La Florida
44.60
and
includes
17.20
17.80
0.60
39.1
0.79
0.6
1.0
106.00
107.00
1.00
142.0
0.33
0.2
0.6
59.30
60.80
1.50
88.7
0.06
0.2
0.1
47.20
1.70
185.0
0.14
0.1
0.1
108.80
1.00
33.2
0.02
0.5
1.4
45.80
1.20
65.5
0.17
0.3
0.2
66.40
68.70
2.30
418.7
0.18
14.8
5.8
67.55
68.70
1.15
760.0
0.17
>20.00
7.9
36.75
38.60
1.85
45.0
0.04
0.4
0.2
and
94.00
104.00
10.00
117.4
0.06
0.1
0.1
includes
95.00
96.00
1.00
166.0
0.07
0.0
0.0
101.00
104.00
3.00
278.6
0.14
0.2
0.2
44.00
45.00
1.00
155.0
0.11
2012-15
Bocancha
2012-16
Bocancha
2012-17
La Colorada
includes
NSV
NSV
2012-18
La Colorada
2012-19
La Florida
NSV
2012-20
Bocancha
51.90
53.00
1.10
269.0
0.06
0.4
0.4
67.50
70.50
3.00
51.4
0.05
0.2
0.2
22.80
23.80
1.00
424.0
0.21
0.4
0.1
87.00
89.80
2.80
266.4
0.59
0.3
1.3
72.00
72.60
0.60
303.0
0.66
0.1
0.1
84.50
89.70
5.20
437.6
0.18
0.4
0.3
86.80
88.80
2.00
898.5
0.16
0.4
0.5
and
2012-21
Bocancha
2012-22
El Tajo
and
2012-23
El Tajo
and
includes
NSV
2012-24
El Tajo
2012-25
La Colorada
90.00
90.70
0.70
120.0
0.09
0.3
0.3
2017-26
El Tajo
50.05
51.00
0.95
796.0
0.28
0.6
0.2
83.80
85.10
1.30
97.2
0.43
0.3
0.3
51.55
53.05
1.50
32.5
0.05
0.1
0.2
104.50
107.50
3.00
506.4
0.19
0.4
0.7
50.50
53.50
3.00
71.8
0.02
0.0
0.1
64.30
75.30
11.00
288.0
0.23
0.2
0.2
and
2017-27
El Tajo
and
2017-28
El Tajo
and
includes
2017-29
and
El Tajo
NSV
69.30
75.30
6.00
497.7
0.33
0.3
0.3
28.75
29.60
0.85
1151.0
0.15
0.2
0.1
70.50
72.00
1.50
96.0
0.09
0.0
0.0
and
93.55
93-95
0.40
135.0
0.08
0.2
0.3
and
96.65
100.30
3.65
328.1
0.55
0.6
1.3
34
Hole ID
Zone
From
(m)
To
(m)
Interval
(m)
Silver
(g/t)
Gold
(g/t)
Lead
%
Zinc
%
2017-30
El Tajo
121.60
126.00
4.40
170.2
0.36
0.7
0.4
2017-31
El Tajo
145.00
145.85
0.85
160.1
0.05
0.1
0.1
149.20
151.85
2.05
44.1
0.83
0.1
0.4
21.40
22.40
1.00
67.5
0.85
0.0
0.2
75.40
78.20
2.80
152.9
0.60
0.4
0.6
59.70
61.05
1.35
15.5
0.17
0.0
0.1
91.60
93.60
2.00
137.9
1.39
0.6
1.9
15.00
15.35
0.35
491.0
0.89
0.2
0.3
and
2017-32
El Tajo
and
2017-33
El Tajo
and
2017-34
El Tajo
132.25
133.75
1.50
37.8
0.41
0.4
0.9
2017-35
El Tajo
120.40
122.95
2.55
200.2
0.44
0.6
1.4
2017-36
El Tajo
71.70
73.65
1.95
853.7
0.31
0.2
0.5
and
135.80
137.10
1.30
41.9
0.17
0.2
0.4
and
144.00
147.70
3.70
179.4
0.05
0.1
0.2
106.90
107.20
0.30
57.3
0.00
0.0
0.1
116.70
117.40
0.70
63.8
0.03
0.1
0.3
0.2
and
2017-37
El Tajo
and
130.95
131.35
0.40
85.1
0.01
0.0
2017-38
El Tajo
56.45
60.85
4.40
65.5
0.04
0.1
0.1
2017-39
El Tajo
36.70
37.10
0.40
28.3
0.06
0.4
0.2
58.00
60.10
2.10
29.8
0.03
0.0
0.0
El Tajo
111.30
112.30
1.00
21.9
0.09
0.4
0.3
114.65
115.65
1.00
85.0
0.45
0.1
0.1
and
and
2017-40
and
2017-41
El Tajo
117.00
118.20
1.20
30.9
0.06
0.0
0.1
2017-42
El Tajo
85.50
88.40
2.90
449.3
1.44
1.3
1.6
Note: True widths are estimated to be roughly 70% of drill intercept length
35
El Tajo Zone
El Tajo is the principle target defined to date, demonstrating a good continuity of mineralization over a
tested strike length of approximately 500 metres with 25 drill holes (Figures 20 and 21). Representative
drill sections through the zone are presented in Figures 22, 23, and 24.
Figure 20. El Tajo Zone drill holes
36
Figure 21. Longitudinal section of the El Tajo Zone
37
Figure 22. Section 2012-1 and 2012-31, El Tajo Zone
Figure 23. Section 2012-3 and 2012-26, El Tajo Zone
38
Figure 24. Section 2012-4 and 2012-32, El Tajo Zone
11 SAMPLE PREPARATION, ANALYSES AND SECURITY
Rock Samples
Most samples are continuous chip samples of outcrop, either from surface outcrop, trenches or from
historic mine workings (Table 8). Samples are taken perpendicular to strike of the veins when possible.
The average sample size is 2.4 kg. Several panel grab samples and float grab samples have also been
taken. In wide areas of exposed mineralization, continuous samples are taken to give an average grade
over width. Samples are painted in the field, with the sample number and a “T” to indicate the start and
finish of each sample. Samples are placed in standard plastic bags with an inserted sample number tag,
and closed with a plastic pull tie. Descriptions are recorded in the field, and then transferred to an Excel
sheet. This data is imported into GIS. Most samples are photographed (Figure 25).
Table 12. Rock sample locations
Location
Surface Rock Samples
Trench Samples
Underground Mine Samples
Total
Samples
493
437
196
1126
39
Diamond Drill Samples
Samples are placed in standard reinforced plastic boxes. Splitting is done following logging procedures at
the Company's rented housing in Chilacayote with a diamond wet saw. One half of the core is placed into
a labeled plastic bag, along with a sample tag. The other half of the core is correctly returned to the core
box, where intervals are marked matching the sample.
Preparation and Analyses
Rock and drill samples were completed by ALS CHEMEX. Chemex implements a quality laboratory
compliant with International Standards Organization. Sample preparation is done at their through their
office in Guadalajara, Mexico with assays performed in British Columbia, Canada. Analytical procedures
include a 33 element ICP-AES analysis (ME-ICP61m) and a 50 g FA AA finish for gold (AA-24). Silver
assays exceeding 100 g/t are re-assayed by HCL leach with an ICP-AES or AAS finish (OG62). Base
metals (lead, zinc and copper) exceeding 10,000 ppm (1%) are re-assayed with results provided in
percent (OG-62).
Quality Assurance Protocols
Argentum has implemented a quality assurance program that includes insertion of certified reference
material including blanks and standards into the drill sample stream. Standards and blanks were
purchased from WCM Minerals in Burnaby, B.C. The two drill phases used up to 6 standards (including a
blank) purchased by WCM (Table 9). Of 1297 total drill samples, 115 (8.9%) were certified reference
material. Of the 115 insertions, 68 were standards and 47 were blanks.
Argentum implemented an industry standard "pass / fail" system of comparing Chemex assays versus
WCM certificates. The author is unaware of any problems, with the exception that PM1140 was too high a
grade to be realistically used.
Table 13. Standards used for the Coyote Project
Standard
WCM Ag g/t
PM 1140
1658
WCM Au g/t
N/A
PM 927
40
2.95
PM1123
31
1.42
PM1142
306
1.38
PM1133
757
N/A
BL115
<.3
<.01
Security
Samples are stored in sealed “costales” (rice sacks) within a locked facility at the Company's rented
housing in Chilacayote. The samples are delivered by the Company directly to the Chemex prep lab in
Guadalajara.
40
Figure 25. Clockwise from upper left: Core cutting and logging facility; Core
photography; Sealed rice sacks with samples; Core logging
Conclusions
It is the opinion of the author that the sampling protocols, analytical and quality assurance procedures,
and security measures used by Argentum at the Coyote project meet industry standards. Standard PM
1140 is considered to be too high a silver grade to be practical. The certified silver value of this standard
is 1658 g/t, requiring two re-assays by Chemex. The provided sample size of the standard was generally
too small to allow for assays exceeding 1500 g/t Ag.
12 DATA VERIFICATION
The author was a consultant for Argentum during the first phase of drilling, and the Qualified Person from
July 2011 - April 2012.
Verification conducted during site visits included:
 Establishing that mapping and rock chip sampling were to industry standards
 Establishing industry standard data base management and using ArcMap GIS software
 Confirmation of drill hole collar locations
 Observation and review of geological and geotechnical logging
 Observation and review of core storage, core splitting, core sampling, sample shipment and
analytical packages
 Review of topographic and elevation control
 Verification of down hole survey techniques and records
 Evaluation of the quality assurance program
 Verification of control samples (standards and blanks)
 Chemex laboratory check assay program
 Verification of pass / fail analysis of standards and blanks
41
13 MINERAL PROCESSING AND METALLURGICAL TESTING
No metallurgical testing has been undertaken on the Coyote Project.
14 MINERAL RESOURCE ESTIMATE
The Company has completed drill programs totalling 4,842.4 metres from 42 diamond drill holes. Drilling
focused within the El Tajo zone, which has received 25 diamond holes to date over a strike length of
approximately 500 metres. Existing drill density is insufficient to calculate a Mineral Resource Estimate.
23 ADJACENT PROPERTIES
There are several concessions adjacent to Coyote however, to date none have been field evaluated by
Argentum. Their legal status is uncertain. There is no evidence of any exploration activities on any
adjacent properties. The Tototlan del Oro mine ~15 kms northeast of the Coyote project is reportedly in
low scale production by a small private Mexican company. Their concessions are not contiguous to the
Coyote project. Argentum has an option on the La Victoria project, which is 40 linear kms to the north.
Soltoro’s El Rayo project lies about 55 linear kms to the northeast.
24 OTHER RELEVANT DATA AND INFORMATION
All relevant data and information regarding the Property is included in other sections of this Technical
Report. There is no other relevant data or information available that is necessary to make the technical
report understandable and not misleading.
25 INTERPRETATION AND CONCLUSIONS
Coyote is an early stage exploration project. Work completed to date is to industry standards. The project
essentially controls the majority of the historic San Miguel de la Sierra mining district. The project area
contains dozens of epithermal low sulfidation vein systems and stockwork zones with strong silver values
and anomalous gold. Base metals and other “indicator” elements are relatively low. Individual vein strike
lengths have been mapped up to nearly 1 kilometre. Vein widths typically range from 1 to 5 metres, with
vein dips generally steeply to the west. Several zones of quartz stockworking and silica replacement have
been mapped, with widths exceeding 35 metres.
Argentum has completed 42 diamond drill holes totaling 4,842.4 metres. The drilling was divided into two
phases. Phase 1 consisted of 25 holes between January and March 2012. Phase 2 consisted of 17
during September and October of 2012. Drilling programs completed to date have tested portions of four
vein systems, but with a focus on the El Tajo zone with 25 holes. Drilling on the La Florida, Bocancha
and La Colorada zones returned mixed but generally negative results. Drilling on the El Tajo zone
reported encouraging results, demonstrating a good continuity of mineralization over a tested strike length
of approximately 500 metres.
Access and infrastructure are excellent. All underlying agreements and permits are in good standing.
Based on the geologic model and the results obtained to date, the author believes the El Tajo vein has
excellent potential for defining a small, possibly economic, high grade, vein hosted silver deposit with
significant credits for gold, lead and zinc. A third phase of drilling as proposed by Argentum staff has been
reviewed and considered logical.
The author also believes there is excellent potential for defining economic vein mineralization at the San
Rafael zone, which to date has received no drilling. Depth potential in all of the zones is untested. Zones
such as La Colorada, Florida and Bocancha which had relatively negative drill results from shallow holes
could have potential mineralization at deeper levels.
42
26 RECOMMENDATIONS
It is the author’s opinion that a third phase of drilling is recommended focusing on the El Tajo zone with
the objective of calculating a 43-101 inferred mineral resource. The drilling program should be designed
to further test El Tajo along strike and currently unexplored depths. The proposed holes and budget are in
the following two tables.
Table 14. Proposed third phase drilling program. El Tajo Zone
Bearing
Angle
2013-43
HOLE
538,847
East
2,225,129
North
Elevation
2152
El Tajo
S 80° E
70
200.00
2013-44
538,816
2,225,183
2156
El Tajo
S 80° E
65
240.00
2013-45
538,875
2,225,355
2123
El Tajo
S 80° E
70
180.00
2013-46
538,863
2,225,084
2142
El Tajo
S 80° E
65
145.00
2013-47
538,874
2,225,029
2122
El Tajo
S 80° E
65
120.00
2013-49
538,900
2,225,485
2118
El Tajo
S 80° E
70
165.00
2013-50
538,908
2,225,543
2127
El Tajo
S 80° E
65
190.00
2013-51
538,923
2,225,647
2161
El Tajo
S 80° E
65
170.00
TOTAL
Zone
TD (m)
1,410.00
43
Table 15. Proposed budget for third phase drilling program. El Tajo Zone
CATEGORY
OPERATING COSTS
Project Manager
Field geologists
GIS
Field assistants
Cook
Camp rental
Core warehouse rent
Vehicle maintenance and gasoline
Cellular
Internet
Electricity
Food
Office Supplies
Mexico Office
Environmental
Purchase airline tickets
Misc.
SUBTOTAL
CUT CORE AND SAFETY EQUIPMENT
Core saw blades
Safety equipment
Supplies
SUBTOTAL
ASSAYS
US $
11115
7500
3700
3900
850
450
150
1800
265
665
890
1000
600
820
300
2375
2800
39180
410
600
450
1460
12000
DRILL COSTS
1,165 Mtrs HQ @ $145/M
245 Mtrs HQ @ $151/M
Reflex rental
Reflex tests
Mobilization
SUBTOTAL
IVA TAX
168925
36995
3000
1600
6000
216520
43800
TOTAL
$312,960
Additional exploration is warranted on the other zones of mineralization within the project. The San Rafael
zone remains undrilled. San Rafael has been mapped on surface and from underground workings over a
strike length of ~600 metres, with very impressive geochemistry.
Metallurgical testing of mineralized core from the El Tajo Zone is recommended.
44
27 REFERENCES
Servicio Geologico Mexiano, 1999; Carta Geologico Minera. Puerto Vallarta F13-11. 1:250,000.
Geo Vector Management Inc., March 27, 2013; Unpublished Report for Argentum Silver Corp.
45
28 CERTIFICATES OF AUTHORS - DATED AND SIGNATURES
Report To:
Argentum Silver Corp.
570 Granville Street – Suite 1200
Vancouver, BC Canada
V6C 3P1
Technical Report for the Coyote Property, Jalisco, Mexico
Report Date: July 12, 2013
Effective Date: July 12, 2013
Prepared by:
Date: July 12, 2013
"James R. Robinson"
James R. Robinson
46
CERTIFICATE OF QUALIFIED PERSON - JAMES R. ROBINSON
To accompany the report titled "43-101 Technical Report For The Coyote Project", dated July 12, 2013
(the "Technical Report").
I, James R. Robinson, of 3552 East Fremont Place, Centennial, Colorado, 80122, U.S.A., do hereby
certify that;
1. I am a consulting independent geologist with an office at the above address.
2. I am a graduate of The Colorado College in 1976 with a B.S. in Geology
3. That I have practiced my profession continuously worldwide since 1976, with over 35 years of
experience. I have been involved in all phases of base and precious metals mineral exploration
and development ranging from reconnaissance to production.
4. That I am a Certified Professional Geologist, CPG-10705, registered with the American Institute
of Professional Geologists.
5. I have read the definition of "qualified person" set out in the National Instrument 43-101 and
certify that by reason of education, experience and affiliation with a professional organization, that
I meet the requirements of an Independent Qualified Person as defined in NI 43-101.
6. I have prepared all sections of the Technical Report, which is written for Argentum Silver Corp.
7. I am independent of Argentum Silver Corp. and the Coyote Property as defined by Section 1.5 of
NI 43-101.
8. I worked as a consultant for Argentum Silver Corp. from July 2011 through March 2012, and
supervised exploration programs at the project including the first phase of drilling. I have
conducted multiple visits to the property and very familiar with the geology and exploration
programs. Site visits included: January 26 - February 4, 2012; February 21 - March 2, 2012; and
March 20 - March 24, 2012.
9. As of the date of this certificate, to the best of my knowledge, information and belief, the
Technical Report contains all scientific and technical information that is required to be disclosed
to make the Technical Report not misleading.
10. I have read NI 43-101 and form 43-101F1, and the Technical Report has been prepared in
compliance with that instrument and form.
11. Signed and dated this12th day of July, 2013 at Centennial, Colorado, U.S.A.
"James R. Robinson"
__________________________
James R. Robinson
47
CONSENT OF QUALIFIED PERSON
July 12, 2013
I, James. R. Robinson, C.P.G., do hereby consent to the public filing of the report titled "NI 43-101
Technical Report For The Coyote Project, State of Jalisco, Mexico", dated July 12th, 2013 (the “Technical
Report”) prepared for Argentum Silver Corp., dated July 12, 2013.
The Technical Report supports portions of the press releases from Argentum Silver Corp. dated May 13,
2013 and May 24, 2013 (the documents), which triggered the requirement for the Technical Report. The
Technical Report does not support any estimate of Mineral Resources or "minimum target potential" in the
documents which are restricted by section 2.3(1)(a) of NI 43-101, and any disclosure under section 2.3(2)
of NI- 43-101.
I consent to the use of extracts from, or a summary of, the technical report in the documents.
I also certify that I have read the documents from Argentum Silver Corp, and that they fairly and
accurately represent the information in the Technical Report that supports the documents.
"James R. Robinson"
__________________________
James R. Robinson
3552 East Fremont Place
Centennial, Colorado, 80122, U.S.A.
48