Dana Resources, with offices in the US and Peru, is a metals exploration company with extensive local knowledge capitalizing on a lucrative Peruvian portfolio of holdings that revealed today details regarding ongoing due diligence pertaining to the Chota Silver Mine in Peru’s thriving Alto Chicama mining district.
The Company seeks to acquire 100% ownership of the mine for $425k in cash and shares, and has entered into a letter of intent (LOI) to that effect.
The Alto Chicama district is host to several of the world’s top yielding mines, with the Barrick Gold Corp’s Lagunas Norte (8.9M ounces in reserves) 25km east, and the Pan American Silver Quiruvilca deposit, which is located approximately 12km southeast of the property.
Quiruvilca in particular has 349,700 metric tonnes of proven reserves (185 g/t Ag, 5.87% Zn, 2.15% Pb and .66% Cu) and 2.8M tonnes of Measured Resources (138g/t Ag, 2.44% Zn, 0.85% Pb and 1.8% Cu), clear indications of the richness of mineral deposition in this region.
With recent Company assays producing 4 g/t gold and 1427 g/t silver at the surface and 439 g/t silver underground, the operating assumption is that accessible material represents the upper part of a much deeper epithermal system (veins of gold deposited via geothermal activity like volcanic activity or hot springs).
With a 53% year-over-year return through December, silver has vastly outperformed the 30% gains of gold this past year, and DANR does not project any appreciable difference in this trend until next year, when the Company predicts a return to 06-08 levels.
The Company also projects silver outperforming gold due to industrial applications, which account for 54% of all fabrication, based on IMF estimations of developing nations driving the majority of global GDP’s projected 3.1% expansion in 2010. DANR is betting heavily on silver as generating massive returns for investors.
General Manager of DANR Peru Benjamin Nunez commented on the due diligence results, including data and samples from the draft 43-101 report which clearly show expectation surpassing results.
Nunez called it an exciting time for the Company, which is hosting both a 1.17M-ounce gold deposit and (now) a producing silver mine, commenting that the company was currently very well positioned to become a self-sustained mining powerhouse.