Featured Company / Silver Spruce Resources Inc.

Stocks are still pushing on record highs, pushing traders deeper into equities and out of commodities.  With that said, in this economic climate, it’s not contrarian to add some safe haven commodities, namely gold and silver, to a portfolio; it’s smart to be diversified.  That can mean physical gold, large miners or small, developmental miners.  One of the reasons that gold has slipped back to a three-week low this week is best exemplified by the VIX index holding near decade-long lows.  The so-called market “fear index” around 10 simply means that investors don’t see any great risks looming in the shadows.  With that, safe haven assets have been knocked down, presenting an opportunity to pick them up at discounted rates.

Those looking for young miners with multiple properties may take notice of Silver Spruce Resources Inc. (TSX-Venture:SSE)(OTC:SSEBF).  The Nova Scotia-based junior explorer is exploring the Kay Mine volcanogenic massive sulfide (VMS) project in Arizona, and the Pino De Plata and the Encino De Oro epithermal silver/ base metal/ gold projects in the prolific Sierra Madre Occidental region of western Chihuahua State in Mexico.   Silver Spruce also has a portfolio of uranium and rare earth element properties in Labrador under its control.

VMS deposits are metal sulfide ore deposits formed on ancient seafloors characterized that are characterized by prolific copper and zinc mineralization.  To understand the potential magnitude of a VMS deposit, consider Glencore’s Kidd Mine in Timmins, Ontario, which is the deepest base metal mine in the world, reaching to a depth of 10,300 feet below surface.

The 471-acre Kay Mine project is an advanced exploration property immediately west of Black Canyon City, Arizona and only 50 miles north of Phoenix.  It is defined as a copper-zinc-lead VMS deposit with silver and gold credits.  Discovered more than a century ago, known mineralization occurs in two lenses of massive sulfide extending from the surface to at least 2,100 feet in depth.

Production at the mine began in 1916 with intermittent production until 1956.  Under ownership of Exxon Mobile (NYSE:XOM) subsidiary Exxon Minerals, the project underwent over $1.5 million-worth of extensive exploration, including mapping, sampling, ground and airborne geophysics and 26,554 feet of drilling between 1972 and 1982.

Based upon Exxon reports and mine level plans, Silver Spruce estimates non-NI 43-101 compliant indicated resources of 6.4 million tons of copper (at 2% cutoff) and an estimated average grade of 2.2% copper, 3.03% zinc, 0.082 ounces of gold per ton, and 1.6 ounces per ton silver (1.65 million ounces gold equivalent or 12.8% zinc equivalent).  More drilling is required to validate the estimate and bring it to National Instrument standards. 

Still, Exxon geologists reiterate in their documentation that  considerable upside remains at the project, as the deposit remains open downdip and potentially along strike.  In fact, an Exxon geologist reported that Kay could contain more than 20 million tons of massive sulfide ore.

Silver Spruce’s work plan for 2017 is focused on mapping, sampling, geophysics and drilling that proves-out the resources as needed to complete a NI 43-101 compliant resource report for the Kay Mine.

The 397-hectare Pino De Plata project is a past-producing (small scale, artisanal) precious metal / base metal project in a prolific region with currently producing mines, including larger players like Coeur Mining, meaning infrastructure exists in the area.

Producing mines in the Sierra Madre Occidental that are classified as epithermal deposits with silver and gold mineralization are typically hosted in multiple veins, breccias, stockworks and replacement zones.  This is the case at Pino De Plata as well based upon mapping of mineralization, alteration, faulting and veining orientations.  Although drilling is required to confirm, Silver Spruce’s experienced leadership team is there in the likelihood that Pino De Plata could be similar to the Coeur’s Palmerejo mine 15 kilometers to the northeast, where higher base metal and silver values occur in the upper parts of the deposit with higher gold values in the lower portion.

At the project, Silver Spruce’s NI 43-101 exploration assessment quickly confirmed three types of highly prospective mineralization and identified three separate target areas that should be drilled.  In limited exploration, assays showed that seven out of nine samples contained greater than 1 ounce per ton (opt) silver to as much as 17.9 opt silver. 

It is also known that vein targets remain open on strike and have indications of ore grade greater than 250 g/t silver.  This high-grade potential is supported by a grab sample from the Sierpe I dump that contained 268 g/t silver and 5% lead and 7% zinc.

Other areas of the Pino De Plata project are relatively unexplored, but data is extremely promising.  For example, at the Terrero Mine, in some places up to 10% of the host rock is replaced by pyrite.  A 1.1 meter chip sample from this area returned 557 g/t silver.

The Santa Elena – Gossan Area is regarded as a viable target for replacement silver-lead-zinc-copper deposits.  At this target, unoxidized replacement mineralization approaches 200 g/t silver.  Importantly, the area has strong potential for relatively shallow mineralization across an area in excess of 20 hectares.  Lending further evidence of the potential, two 40 kilogram samples taken from the Santa Elena Mine stockpile averaged 0.21 g/t gold, 270 g/t silver, 0.085% copper, 0.67% lead, and 2.4% zinc.

In totality, historical data and Silver Spruce’s initial NI 43-101 report on Pino de Plata indicate many similarities geologically between the projects and surface sampling has confirmed high grade mineralization of over 550 g/t silver with highly anomalous grades of lead, zinc, and gold also associated.

Overall, Silver Spruce has two potentially high impact exploration properties with Kay Mine in Arizona and Pino de Plata in the state of Chihuahua, Mexico.  The Company has a very clean balance sheet and an experienced management team in the areas of exploration, prospect development, corporate finance, and public company management necessary to advance the projects to establish resources and economic viability while driving towards commercially producing mines.  The Company plans to spend in the order of $1.5 million on exploration this year and will be raising funds accordingly. The company is currently trading at 7 cents per share, equating to a market capitalization of only $3.2 million, positioning it as what can be considered a value opportunity as the metal sector looks poised to be at the beginning of a new upward cycle.