The Mogollon Property is located approximately 120 kilometres (75 miles) northwest of Silver City, Catron County, in southwest New Mexico. Subject to net smelter returns royalties, Santa Fe has entered into an option agreement to acquire the Mogollon Project from Columbus Silver Corporation for option payments through 2014 totalling US$4.5M.
The project is within trucking distance (approximately 160km) from Santa Fe’s Lordsburg Mill. The Mogollon Project acquisition has the potential to more than double the supply of ore to the mill.
Past production from the Mogollon District, largely from the Little Fanny and Last Chance mines during the period 1905 to 1925, and the Consolidated Mine from 1937 to 1942, consists of 15.7 million ounces of silver and 327,000 ounces of gold. Santa Fe believes production from the Mogollon Project could recommence as early as 2015.
Diamond drilling in the 1980’s targeted the Queen Vein of the Consolidated Mine to identify a historic resource of 767,000 tonnes averaging 320gram per metric tonne (g/t) (9.35 ounce per short ton (oz/st)) silver and 5.1g/t (0.15oz/st) gold in <1km of strike length. The historic resource is along strike and down-dip of previous production on the Queen vein, which mined 267,000 tonnes of 4.8g/t gold and 262g/t Ag prior to production being terminated in 1942 by the US government in support of the war effort.
Cross Section and Longitudinal projection of Queen Vein, with Drill Results converted to True Thickness, Consolidated Mine stope areas, and projection of high grade Au-Ag shoots with potentially mineable underground widths.
A qualified person has not done sufficient work to classify the historical estimates contained herein as current mineral resources. IGS / Sante Fe is not treating the historical estimates as current mineral resources and the historical estimates should not be relied upon, however the historical mineral estimations on Mogollon are relevant to IGS in assessing the potential value of the Santa Fe asset portfolio. Additional drilling is planned for 2013 to validate historical work and a JORC compliant resource estimation is expected following completion of initial exploration and delineation drilling.
Exploration drilling will focus on confirmation of the 257,000 ounce Au & Au equivalent ounce historic resource and significant exploration upside at the Consolidated Mine to advance towards a development decision for Mogollon to provide additional gold-silver production utilising the available capacity of the Lordsburg Mill.
Mogollon covers an extensive, silver-gold bearing epithermal vein field on a caldera margin of the Tertiary Bursum volcanic center. The Mogollon silver-gold deposits are classic epithermal veins which demonstrate good continuity of grade and thickness for strike lengths of up to 1,219 m (4,000 ft) in the Little Fanny and Last Chance mines and through a remarkably consistent, elevation-controlled vertical range of about 305 m (1,000 ft). There are two sets of veins at Mogollon, an east-west set represented by the productive Little Fanny and Last Chance veins, and a north-south set represented by the Queen vein developed in the Consolidated Mine
Recorded historic production, consists of 15,700,000 ounces silver and 327,000 ounces gold from about 1.5 million tonnes (1.7 million short tons) of ore. Modern exploration activity at Mogollon has been limited to small programs by St. Joe Minerals, Cordex and John Livermore in three programs between 1982 and 1988 and consisted of 12.192 m (40,000 ft) of drilling in 53 rotary and core holes which were successful in outlining a partially delineated silver-gold deposit in the Queen vein containing approximately 767,000 tonnes (845,000 tons) totalling a 257,000 ounce Au & Au equivalent ounce historic resource referred to above.
Significant intercepts of gold and silver were also encountered in a number of other veins including Anna E, Last Chance, South Fork, Mascot and Graveyard. In January 2010 Columbus Silver drilled 2,210 metres (7,293 feet) of core in eleven holes at Mogollon. The drilling was exploratory in nature, concentrated on the Anna E. vein, the Ida May-Independence vein system, and the uppermost levels above the Consolidated Mine deposit which was partially delineated by drilling in the 1980’s.