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Pulacayo (Silver-Zinc-Lead)

1,030g/t Ag over 25 meters

Pulacayo (Silver-Zinc-Lead)

51 million* oz silver in the ground for $50 million

Pulacayo (Silver-Zinc-Lead)

Supply silver to the modern world
Corporate presentation
Pulacayo (Silver-Zinc-Lead)

    Related Documents

    pdf Latest Company Presentation (pdf)
    pdf Pulacayo – Paca Technical Report Oct 20, 2017 (pdf)

    Overview

    The Project is located in Bolivia, 107 km northeast of Sumitomo Corporation’s San Cristobal silver mine, 185 km southwest of Coeur Mining, Inc.’s San Bartolome silver mine, and 139 km north of Pan American Silver Corp.’s San Vicente silver mine.

    Pulacayo is world’s 2nd largest silver mine based on over 600million oz historical silver production (https://en.wikipedia.org/wiki/Pulacayo). Mining production was suspended due to Bolivian revolution in 1952.

    Prophecy (TSX:PCY , OTCQX: PRPCF) is trading at 40 cents and $50 million market capitalization. This is one tenth (1/10) of the value of its neighbor New Pacific (TSX-V: NUAG) which has a market capitalization of $800 million.

    Pulacayo Railway

    Pulacayo Potosi

    Pulacayo Strategy

    In November 2017, Prophecy received an independent technical report with an effective date of October 20, 2017 titled “Updated Mineral Resource Estimate and Technical Report for the Pulacayo Project” (the “Report”). The Report was prepared by Mercator Geological Services Limited (“Mercator”) on the Company’s Pulacayo project (the “Project”) and has been filed under the Company’s profile on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com.

    The Report describes resources estimated following the guidelines of the CIM Definition Standards for Mineral Resources and Mineral Reserves.

    Two mineral resource estimates were disclosed according to the requirements of National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) – one for the Pulacayo deposit and the second for the Paca deposit.

    Pulacayo Deposit

    Results of the mineral resource estimate prepared by Mercator for the Pulacayo deposit are presented below in Table 1.

    Pulacayo Mineral Resource Statement – Effective Oct 20th, 2017
    Ag Eq. Cut-Off (g/t) Category Tonnes** Ag
    (g/t)
    Zn (%) Pb (%) Ag Eq.
    (g/t)
    Ag
    (MOz)
    Zn
    (Mlbs)
    Pb
    (Mlbs)
    400 Indicated 2,080,000 455 2.18 3.19 594 30.4 146.3 100
    Inferred 480,000 406 2.08 3.93 572 6.3 41.6 22


    Notes:
    (1) Mineral resources are estimated in conformance with the CIM Standards referenced in NI 43-101.
    (2) Raw silver assays were capped at 1,700 g/t, raw lead assays were capped at 15% and raw zinc assays were capped at 15%.
    (3) Silver equivalent Ag Eq. (g/t) = Ag (g/t)*89.2% + (Pb% *(US$0.94/ lb. Pb /14.583 Troy oz./lb./US$16.50 per Troy oz. Ag)*10,000*91.9%) + (Zn% *(US$1.00/lb. Zn/14.583 Troy oz./lb./US$16.50 per Troy oz. Ag)*10,000*82.9%).
    (4) Metal prices used in the silver equivalent calculation are US$16.50/Troy oz. Ag, US$0.94/lb Pb and US$1.00/lb. Zn. Metal recoveries used in the silver equivalent equation reflect historic metallurgical results disclosed by Apogee Silver Ltd. (Porter et al., 2013).
    (5) Metal grades were interpolated within wire-framed, three-dimensional silver domain solids using Geovia-Surpac Ver. 6.6.1 software and inverse distance squared interpolation methods. Block size is 10m(X) by 10m(Z) by 2m(Y). Historic mine void space was removed from the model prior to reporting of resources.
    (6) Block density factors reflect three-dimensional modeling of drill core density determinations.
    (7) Mineral resources are considered to have reasonable expectation for economic development using underground mining methods based on the deposit history, resource amount and metal grades, current metal pricing and comparison to broadly comparable deposits elsewhere.
    (8) Rounding of figures may result in apparent differences between tonnes, grade and contained ounces.
    (9) Mineral resources that are not mineral reserves do not have demonstrated economic viability.
    (10) * Tonnes are rounded to nearest 10,000. Based on the resource estimate Ag Eq. cut-off value of 400 g/t and 100% recovery; figures are rounded to the nearest 100,000th increment

    Between 2006 and 2012, a total of 69,739 metres of diamond drilling (226 surface and 42 underground drill holes) was conducted at Pulacayo, results of which support the mineral resource estimate reported in this news release. The Pulacayo site is currently permitted for production at a milling rate of 560 tonnes per day and no known legal, political, environmental, or other risks that would materially affect potential future development have been identified by Prophecy at the effective date of the current (October 20, 2017) mineral resource estimate.

    Approximately 85% of the resource tonnage identified at the 400 g/t Ag Eq. cut-off value occurs within 150 meters vertical distance from the main San Leon tunnel, which may facilitate future mineral extraction.

    Historic Pulacayo production was predominantly from the Tajo vein system which extends over a strike length of more than 2.5 km and to a depth of at least 1,000 meters. Prior resource drilling only covered approximately 20% of the Tajo vein system strike length. With new drilling, Prophecy feels that there is potential to discover additional resources along the Tajo structure.

    Pulacayo Strategy

    Pulacayo Project Arial

    The Company’s research has shown that relatively few silver underground deposits have been defined at resource cut-off values of 400 g/t Ag Eq. or more.

    Pulacayo District Plain View

    Pulacayo District Plain View

    Pulacayo High Grade Target Zone

    Pulacayo High Grade Target Zone

    Pulacayo Mining Records by Hoshchild 1900 to 1960

    Pulacayo Mining Records by Hoshchild 1900 to 1952 Pulacayo Mining Records by Hoshchild 1900 to 1952 Pulacayo Mining Records by Hoshchild 1900 to 1952
    Version 1:
    Ag 400g to 800g yellow
    Ag 800g or above red
    below 400g blocks green
    not mined but assayed blocks are diagonally shaded
    Version 2:
    Zn+Pb 10%-20% yellow
    Zn+Pb 20% or above red
    below 10% blocks green
    not mined but assayed blocks are diagonally shaded
    Version 3: AgEq ( Silver – $17.36/oz Zinc – $1.06/lb Lead – 0.94/lb)
    AgEq 400g to 800g yellow ($300 to $500)
    AgEq 800g above red ($500+)
    AgEq below 400g green (< $300)
    not mined but assayed blocks are diagonally shaded

     

    On January 21, 2020, Prophecy announced the first step-out diamond drilling results from its 100%-controlled Pulacayo silver project in the Potosi department of Bolivia. Borehole PUD 267 intercepted 10 meters of mineralization grading 147 g/t silver, 9.8% zinc, and 2.0% lead (539 g/t AgEq) within 35.5 meter mineralization grading 230 g/t AgEq starting 31.5 meters downhole.

    PUD 267 marks Prophecy’s first Pulacayo drill hole of the 2020 drilling campaign and the first drilling to be conducted on the property since 2012. The results of PUD 267 comes on the back of the success of Prophecy’s first drill campaign at Paca (7km north of Pulacayo), where PND 110 intersected highest-ever grade at Paca of 12 meters of mineralization grading 1,085g/t silver, starting 16 meters downhole (see Company’s October 28, 2019 news release). These near-surface, high-grade intersections contribute positively to a potential district-style project economic assessment with consideration of open-pit mining scenarios. There are several other targets controlled by Prophecy within the district that are yet to be drilled but highly promising (e.g., Pacamayo, Al Abra, and Pero).

    PUD 267 intercepted the Tajo vein system 83 meters west from PUD 041 which intersected 20 meters of mineralization grading 15.1g/t Ag, 2.43%Zn, 0.76% Pb at a similar depth to the mineralization encountered at PUD 267. PUD 041 (drilled in 2008) represents the westernmost drillhole that comprises the Company’s 2017 NI43-101 compliant Pulacayo resource (“Eastern Block”). These results confirm that the Tajo vein system extends westward and occurs near-surface, with a probable thickening component for a minimum 83-meter extension to the west of the Eastern Block.

    The Eastern Block spans 1.4 km in strike, roughly 300 meters of vertical section and contains 30.4 million indicated silver oz and 6.4 million inferred silver oz estimated in the independent NI43-101 report by Mercator of October 2017 (see the Company’s press release dated November 22, 2017).

    PUD 267 was planned based on a vertical projection of Pulacayo’s historic underground workings which followed the Tajo vein system. These workings exist between 400 meters and 1,000 meters from the surface with mined grades of 10% to 25% Zn and 300g/t to 800g/t Ag (according to Hochschild mining records from 1914 to 1960). The results of PUD 267 reveal strong potential for existing mineralization from near-surface in the intervening depths to the workings approximately 400 meters below.

    The current 20-hole, 5,000 meter step-out program is due for completion in early February, with full assay results expected to be released throughout February.

    Pulacayo District Plain View

    (PUD 267 is hole #1)

    Prophecy has identified targets as far as 1.4 kilometers west of PUD 041 and is current drilling PUD 278, which is situated 600 meters west of PUD 041.

    Complete composited drill intersections of mineralization (in meters) are tabulated below:

    Hole ID From To Length Ag (g/t) Zn (%) Pb (%) Ag Eq. (*)
    PUD267 31.5 67.0 35.5 54.3 4.31 0.92 229.6
    including… 48.0 58.0 10.0 146.7 9.79 1.97 538.9
    PUD267 117.0 123.0 6.0 47.8 1.11 0.25 89.7
    including… 121.0 122.0 1.0 238.0 3.61 0.86 367.5
    PUD267 127.5 131.0 3.5 1.3 1.45 0.25 60.2
    PUD267 139.5 142.0 2.5 2.4 1.68 0.20 67.4

     

    Reported widths are intercepted core lengths and not true widths, as relationships with intercepted structures and contacts vary. Based on core-angle measurements, true widths are estimated at approximately 61% of reported core lengths.

    Silver equivalent is calculated as follows: Ag Eq. (g/t) = Ag (g/t)*89.2% + (Pb% *(US$0.94/ lb. Pb /14.583 Troy oz/lb./US$16.50 per Troy oz. Ag)*10,000*91.9%) + (Zn% *(US$1.00/lb. Zn/14.583 Troy oz/lb./US$16.50 per Troy oz. Ag)*10,000*82.9). This calculation incorporates metallurgical recoveries from test work completed for Pulacayo in 2013.

    Pulacayo Drillhole Trace

    Paca Deposit

    The Paca deposit is located in Bolivia approximately 7 km north of the Pulacayo deposit.

    Results of the mineral resource estimate prepared by Mercator for the Paca deposit are presented below in Table 3. The Report described previously and filed on SEDAR documents the resource estimate.

    The Report outlined 2.54 million tonnes at a weighted average grade of Ag 256 g/t, Pb 1.03%, Zn 1.10% (Ag Eq. 342 g/t) in the inferred category. The contained metal content estimated by the Company, of the inferred category resources is 20.9 million ounces of silver, 57.7 million pounds of lead, 61.6 million pounds of zinc. (more resource details in the table below)

    Paca Mineral Resource Statement – Effective Oct 20th, 2017
    Ag Eq. Cut-Off (g/t) Category Tonnes** Ag
    (g/t)
    Zn (%) Pb (%) Ag Eq.
    (g/t)
    Ag
    (MOz)
    Zn
    (Mlbs)
    Pb
    (Mlbs)
    200 inferred 2,540,000 256 1.10 1.03 342 20.9 61.6 57.7


    Notes:
    (1) Mineral resources are estimated in conformance with the CIM Standards referenced in NI 43-101.
    (2) Raw silver assays were capped at 1,050 g/t, raw lead assays were capped at 5% and raw zinc assays were capped at 5%.
    (3) Silver equivalent Ag Eq. (g/t) = Ag (g/t) + (Pb% *(US$0.94/ lb. Pb /14.583 Troy oz./lb./US$16.50 per Troy oz. Ag)*10,000) + (Zn% *(US$1.00/lb. Zn/14.583 Troy oz./lb./US$16.50 per Troy oz. Ag)*10,000). 100 % metal recoveries are assumed based on lack of comprehensive metallurgical results.
    (4) Metal prices used in the silver equivalent calculation are US$16.50/Troy oz. Ag, US$0.94/lb Pb and US$1.00/lb Zn and reflect those used for the Pulacayo deposit mineral resource estimate reported above.
    (5) Metal grades were interpolated within wire-framed, three-dimensional solids using Geovia-Surpac Ver. 6.7 software and inverse distance squared interpolation methods. Block size is 5m (X) by 5m (Z) by 2.5m (Y). Historic mine void space was removed from the model prior to reporting resources.
    (6) A block density factor of 2.26g/cm³ was used and reflects the average of 799 density measurements.
    (7) Mineral resources are considered to have reasonable expectation for economic development using combined underground and open pit methods based on the deposit history, resource amount and metal grades, current metal pricing and comparison to broadly comparable deposits elsewhere.
    (8) Mineral resources that are not mineral reserves do not have demonstrated economic viability.
    (9) *Tonnes are rounded to nearest 10,000.


    **Based on the resource estimate Ag Eq. cut-off value of 200 g/t and 100% recovery; figures are rounded to the nearest 100,000th increment

    hole № from – to (m) int (m) Ag
    (g/t)
    Pb
    (%)
    Zn (%)
    PND003 11.0 – 28.0 17.0 260 0.9 0.1
    PND008 18.0 – 33.5 15.5 314 1.0 0.4
    PND029 12.0 – 22.3 10.3 436 0.0 0.0
    PND031 0.0 – 37.0 37.0 217 0.9 0.3
    PND062 10.0 – 52.0 42.0 406 0.8 0.1
    ESM2 0.0 – 38.0 38.0 411 1.4 1.2
    PND110 16.0 – 28.0 12.0 1,085 0.7 0.0

     

    The resource estimate is based on results of 97 diamond drill holes and 1 reverse circulation drill hole totaling 18,160 meters completed between 2002 and 2007.

    Pulacayo Drillhole Trace

    Pulacayo Drillhole Trace

    The geology of the Paca deposit includes a core zone of feeder-style mineralization associated predominantly with brecciated andesite, plus additional zones of shallowly dipping mantos-style mineralization that are hosted by the surrounding volcano-sedimentary sequence. The Paca deposit remains open at depth and along strike.

    The Paca mineralization starts from surface and the deposit may be amenable to open-pit mining and this will be evaluated further in the future.

    The Company’s research has shown that relatively few silver open pit deposits have been defined at resource cut-off values of 200 g/t Ag Eq. or more.

    Pulacayo Drillhole Trace

    Pulacayo Drillhole Trace

    Pulacayo Drillhole Trace

    Pulacayo Mining Production Contract (“MPC”) between Prophecy and the Corporación Minera de Bolivia (“COMIBOL”), a branch of the Bolivian Ministry of Mining and Metallurgy, was executed on October 3, 2019.

    Prophecy was notified of final government resolution approving the MPC on Sepember 27, 2019. The MPC grants Prophecy the 100% exclusive right to develop and mine at the Pulacayo and Paca concessions for up to 30 years. It is comparable to a mining license in Canada or the United States.

    Prophecy’s Bolivian subsidiaries have spent $25 million on Pulacayo and Paca, with over 80,000 meters of drilling, a completed historic independent feasibility study, and an approved detailed environment impact assessment (“DEIA”).

    Qualified Persons and Update Date

    The technical contents of this news release have been prepared under the supervision of Danniel Oosterman P.Geo. Mr. Oosterman is a Qualified Person as defined in NI 43-101. Mr. Oosterman is a consultant to the Company and is not independent of the Company since most of his income is derived from the Company.

    Peter Webster, P. Geo., of Mercator Geological Services Limited is one of the Qualified Persons within the meaning of NI 43-101 responsible for preparation of Sections 3.0 to 8.0, 14.0 to 23.0 and 26 of the Report. He also reviewed all Report sections, contributed to the Report Summary and Report Sections 24.0 and 25.0, and responsible for the mineral resource estimate addressed in this news release. Michael P. Cullen, P. Geo., also of Mercator Geological Services Limited is the other Qualified Person within the meaning of NI 43-101 responsible for preparation of Sections 1.0 and 2.0, 9.0 through 13.0 of the Report. He also reviewed all Report sections and contributed to the Report Summary.

    Video Gallery

    Jan 2020 Mgmt Testing Fully Repaired 3km Track In Preparation
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    John Lee: This will be hosted in PCY site

    Jan 2020 Pulacayo San Leon Tunnel Rehab Substantially Complete
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