The San Martin project is located 50 km east of the City of Querétaro in Querétaro State, and about 250km northwest of Mexico City. High grade mineralization was discovered at San Martin in the 18th Century, and is reported to have been mined over a period of 40 years; however, no production records exist. Between 1900 and 1924, an estimated 250,000 tonnes grading 15 g Au/t and 100 g Ag/t was reportedly mined.
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In 1982, the area was declared a National Reserve; however, by 1986, Luismin had reached an agreement to conduct exploration/exploitation in the area. Mining began in 1993 at 300 tpd and the production increased on a yearly basis to the present rate of 747 tpd with the capacity of 900 tpd. Exploration has been concentrated along the NE trending breccia zone however evidence of a northerly trend in area 30 leads us to suspect possible other structures.
Mineralization occurs in Upper Cretaceous black limestone and calcareous shales of the Soyatal Mexcala Formation as electrum, and silver selenide minerals principally associated with quartz and to a lesser degree with calcite. The deposit is an epithermal, probably high sulphidation precious metal (Ag-Au) type (metal ratio Au:Ag at 1:10), related to a Tertiary dacitic/andesitic intrusive dome.
Mineralization is generally made up of breccia that commonly is concordant with a limestone/shale contact (in the San Martin and San Jose areas) which forms the relatively steeply dipping tronco deposits, these troncos contact the younger volcanic flows (dacite and ignimbrite) where the have formed the more horizontal manto portions of the deposit. The mineralized economic breccia grades from 30 g Ag/t to 250 g Ag/t together with 2.0 g Au/t to 30 g Au/t over widths that vary from 1.0 to 17.0 m but average 4.0 m.
At depth in the San Martin area the Guadalupe vein was found in late 2007. This vein is sub parallel with the San Martin segment is narrower, more vein like and somewhat higher grade than the San Martin structure at the same elevation. Drilling and lateral development are being used to prove reserves in this vein which indicates the potential for other similar structures.
During 2008 an intermediate manto deposit was found on level 5 in the 29 area. This one stope produced 60,000 tonnes of ore at grades of 4.2 g/t gold and 65 g/t silver. While drilling to locate a possible offset to this deposit in 2010 the SAM vein was found. The SAM vein has been developed for over 200 meters on level 6 in area 29. On level 6 it is relatively shallow dipping to the east at 20 degrees however as it rises to the west the grade steepens and in some instances it becomes vertical as it intersects some carbonaceouw limestone beds. Grades in the SAM vein are between 1 and 4 grams gold with 40 to 120 grams silver. The vein portion is normally a meter thick however economic values are present over 3 meter thicknesses.
Elsewhere in area 29 the mantos in level 3 were without access due some rockfalls in the main access until August of 2010 when a new access was finally completed. Since that time Starcore has been successful in locating some fault offset blocks of manto ore primarily on the west of the main pilotos orebodies. Stopes are currently being developed in these areas and are expected to provide ore grading 6 grams gold and 100 grams silver to sweeten the mill feed.
In the San Martin and area 28 areas efforts to access and develop the mineralized hangingwall of previously exploited tronco stopes has proven very successful in providing ore exceeding the cutoff grade of 2 grams gold equivalent with little or no development costs. In some cases the hangingwall is being mined wider than the original stopes.
Proven and Probable Mineral Reserves - San Martin*
Total Proven and Probable Mineral Reserves at the San Martin mine as of July 31, 2011 estimated by mine staff and reviewed by David R. Gunning P. Eng. and Joe Campbell Geo. are 586, 318 tonnes at a grade of 2.29 g Au/t and 39 g Ag/t.
Total Inferred Mineral Resources at the San Martin mine (excluding San Pedrito) are 1.31 million tonnes at an approximate grade of 2.37 g Au/t and 27 g Ag/t. Inferred Mineral Resources are not known to the same degree of certainty as Mineral Reserves and do not have demonstrated economic viability. In addition Measured and Indicated mineral Resources have been calculated for blocks that do not meet the current 2 g/t Au equivalent cutoff grade for Reserves but may, after repayment of the hedge in January 2013, assuming current gold prices, prove economic. Measured Resources are estimated to be 9,115 tonnes at 1.62 g Au/t and 6 g Ag/t and Indicated Resources are 83,405 tonnes at 1.62 g Au/t and 8 g Ag/t. No reserves or resources have been defined north of Cuerpo 31.
The reserve and resource estimate is based on the following assumptions and subject to the rules defined by Luismin many years ago which have resulted in annual replacement of reserves. In recent years a greater percentage of production is coming from narrow vein structures and some of the original Luismin assumptions have been modified to try to improve grade estimation. The assumptions used in this estimate are:
- A gold price of $1200 per ounce,
- A silver price of $24 per ounce
- Current costs of $65.00 per metric dry tonne which includes capex,
- Average metallurgical recoveries of 87% for gold and 60% for silver,
- Resultant cutoff grades of 2.00 g/t Au equivalent,
- Specific gravity of 2.55,
- Remnant pillars left in stopes over 5 meters wide are typically 22% of the total tonnage, ie. 78% extraction,
- Mining dilution of 10% of zero grade in area 28 and 29 and all Mantos, 20% of zero grade for San Martin blocks and 40% of zero grade for Guadalupe blocks, and
- Top cutting of Guadalupe assays to 20 g/t Au.
* Excerpt from the San Martin Technical report titled 'Reserves and Resources in the San Martin Mine, Mexico as of July 31, 2011, Amended and Restated December 19, 2011'.
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