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First Majestic takes foothold in Blackrock Silver

Jerrit Canyon mine in northern Nevada. (Image courtesy of Jerrit Canyon Gold.)

First Majestic Silver (TSX: FRI; NYSE: AG) is investing C$1.3 million in Blackrock Silver (TSXV: BRC), which has a portfolio of gold and silver properties in Nevada.

First Majestic, which recently acquired the Jerritt Canyon gold mine in Nevada from Sprott Mining and has three producing silver mines in Mexico, is taking up just over half of Blackrock Silver’s C$2 million non-brokered private placement of 2.7 million units at C$0.75, with each unit consisting of one common share and one-half of one share purchase warrant, exercisable for a two-year period at a price of C$1.15.

Andrew Pollard, Blackrock Silver’s president and CEO, described the investment as “strategic” and a “validation of the potential of our Tonopah West silver-gold project” in the Walker Lane trend of western Nevada.

“With First Majestic’s recent entry into Nevada through their acquisition of the Jerritt Canyon mine and their deep technical bench-strength, they represent an ideal strategic investor as we continue on our path towards delivering our maiden resource estimate,” for its DPB target, he said in a press release announcing the investment, adding the funds “will allow us to scale up our exploration program.”

BlackRock’s exploration at the Tonopah West project last year consisted of 30,000 metres of reverse circulation and diamond drilling and this year the company has four drill rigs and a planned program of at least 40,000 metres focused on infill, expansion and exploration at three targets; two core drills infilling the DPB target, one core drill exploring along the Victor vein system; and one RC rig continuing with step-out holes. It plans to complete its first resource estimate by the fourth quarter of this year on its DPB target.

The junior has identified ten high-grade veins on the property ranging in size from 400 metres up to 1.5 km in strike, almost all of which remain open for expansion, the company says.

In March, drilling intersected a new vein south of the known vein swarm at the DPB target, with drillhole TW21-062 intersecting 3.1 metres grading 6.15 grams gold per tonne and 388 grams silver per tonne (1,003 grams silver-equivalent per tonne) starting from 398 metres downhole, and drillhole TW21-058 returned 1.29 grams gold and 94.5 grams silver (223.5 grams silver-equivalent) from 317 metres.

In early May, the junior explorer released assays from its Victor target, adjacent to the eastern border, with highlights including drillhole TW21-077, which returned 3.075 grams gold per tonne and 310 grams silver per tonne (617.5 grams silver-equivalent) over 3 metres and 7.6 metres grading 2.139 grams gold per tonne and 230 grams silver per tonne (444 grams silver-equivalent).

Over the last year, Blackrock Silver has traded in a range of C$0.21 and C$1.61 per share, and at presstime in Toronto were changing hands at C$1.02.

The junior has about 123 million common shares outstanding for a market cap of about C$125 million.

(This article first appeared in The Northern Miner)