Project

Overview

“Los Reyes is an exceptional opportunity for exploration and development. The Company will continue to drill in order to expand existing resources as well as identify promising new targets.” —Prime Mining CEO, Daniel Kunz

Prime Mining’s Los Reyes project is located 43 kilometres south-east of the mining-friendly city of Cosalá, Sinaloa, with a land package of contiguous claims totaling 13,800 hectares. The project is located in the historically productive Guadalupe De Los Reyes mining district, which has an extensive mining history stretching back into the 1700s.

Los Reyes History

Gold and silver were discovered at Los Reyes by the Spanish in the late 1700s and mining occurred in the area for over 150 years up until the 1950s. The Guadalupe de los Reyes underground mine opened in the late 1800s and to date is the most significant source of gold production in the district. It is estimated to have produced 500-600,000 oz of gold and 40M oz of silver at reported grades of +10 g/t Au and +500 g/t Ag.

From the 1950s through the 1980s there was limited activity in the Los Reyes area other than mostly exploration reconnaissance studies. Modern drilling began at the Los Reyes area in the 1990s and was targeted at defining shallow and lower-grade gold-silver mineralization in areas surrounding the Los Reyes underground operations. Since that time, over 50,000 meters of RC and core drilling have been completed within the current project boundaries resulting in extensive area-wide resource data.

Previous Operators

The Property was drilled between 1993 and 2015 by several companies including Northern Crown Mines, Meridian Gold, Vista Gold Corp., and Great Panther Silver Limited.

A total of 493 holes were previously drilled (reverse circulation and diamond drilling) totaling over 51,000 metres.

Concession Boundary

Prime’s Los Reyes property consists of a land package comprised of 37 contiguous concessions, totaling to a property size of 6,273 hectares. An application has been made for an additional 7,500 hectare concession, the El Rey.

Geology & Mineralization

The Property is in the Guadalupe de los Reyes mining district in the western foothills of the Sierra Madre Occidental mountain range, Sinaloa State, México. In the vicinity of the Property, the volcanic sequence unconformably overlies a late Cretaceous-aged felsic batholith. This overlying volcanic package is subdivided into Lower and Upper sequences that are separated by an angular unconformity.

The Lower Sequence spans from late Cretaceous-early Tertiary, is approximately 1 km thick, and is predominantly composed of intermediate (andesite) volcanics, felsic intrusives and related felsic (dacite to rhyolite) volcanics, intercalated sandstone and volcanic conglomerate intervals.
The upper sequence, which is deposited unconformably on the lower sequence, is composed of ash-flow and ash-fall tuffs that are rhyolitic to dacitic in composition. In the main area of mineralization, the deposits dominantly occur along three northwest and west-northwest oriented silicified structural corridors.

These mineralized structural corridors are named after the hosted mineralized areas which include:

Guadalupe Structure

Zapote-Tahonitas (Z-T) Structure

Central Zone Structure

New Targets

Guadalupe Structure

Zapote-Tahonitas (Z-T) Structure

Central Zone Structure

New Targets

Mineralized areas that are not along the main recognized structural corridors include Fresnillo, Las Primas, Las Palmitas, El Orito, Mina, El Tule and La Verde.

Mineral Resource
APRIL 2020

Note that the Resource Calculations shown below are dated April 2020, and do not include drill results from Prime Mining’s Phase 1 or Phase 2 drill program.

GOLD RESOURCE

SILVER RESOURCE

*Three year rolling gold price of US$1,329 / troy ounce and silver price of US$16.00 / troy ounce used
Source: Stantec Consulting Ltd, Los Reyes Technical Report, Dated April 2, 2020

Exploration

Prime Mining has completed an initial, Phase 1 exploration program at Los Reyes consisting of comprehensive data analysis, regional and detailed geological mapping, trenching and including over 25,000 metres of core drilling. Results to date show that the deposits are much larger than previously reported with several new discoveries including bonanza grade gold-silver mineralization discoveries outside of the currently defined resources. Originally considered to be a small-scale, high-grade heap leach operation, Los Reyes is quickly transitioning to become a high margin open pit milling operation.

The project continues to be vastly underexplored with potential for additional discoveries and resource expansion upside based on open extensions of known deposits, multiple untested high priority exploration targets, and only 40% of the known structures systematically explored leaving over 10 kilometres of untested strike length.

Phase 2 drilling at Los Reyes is underway. Representing the Company’s second year of drilling, this program is expected to run from November 2021 through October of 2022. It will include over 250 new drill holes, for a minimum of 50,000 metres (“m”) with a focus on identifying additional higher mill-grade gold-silver mineralization identified in three corridors of mineralization. Presently, the drill program includes up to eight diamond drills and up to three reverse circulation drills. Several new targets immediately adjacent to these corridors have been identified and will be drilled for the first time as part of Phase 2.