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Silver Dollar Resources Inc. (OTCQB:SLVDF)

Silver Dollar Resources Inc. (OTCQB:SLVDF)

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Silver Dollar Resources Inc. is engaged in the business of mineral exploration. The objective is to acquire mineral property assets of merit and create shareholder value by finding and developing economic precious and base metal deposits.

The Company completed its initial public offering in May 2020 and is listed on the Canadian Securities Exchange (CSE) under the symbol: SLV, and trading in the United States on the OTCQB symbol: SLVDF.

Silver Dollar’s current projects are located in two of the prolific mining jurisdictions in the world and include the discovery-stage Pakwash Lake and the Longlegged Lake properties in the Red Lake Mining District of Ontario, Canada; and the advanced exploration/development stage La Joya Silver Project in Durango, Mexico.

The Company has an aggressive growth strategy and is actively reviewing projects in mining-friendly jurisdictions internationally for potential acquisition.

-Projects:

La Joya Silver Project:

Under the terms of the Definitive Agreement between Silver Dollar and First Majestic Silver Corp. (First Majestic), Silver Dollar has an exclusive option to acquire an initial 80% interest, and if exercised, a second option to acquire the remaining 20% interest for an aggregate 100% interest in First Majestic’s La Joya silver-copper-gold property (see news release of August 10, 2020). Located in the south-eastern portion of the State of Durango in the Mexican Silver Belt, this exploration and development stage property consists of 15 mineral concessions totalling 4,646 hectares and hosts the Main Mineralized Trend (MMT), Santo Nino and Coloradito deposits.

The Property is situated approximately 75 kilometres (km) southeast of the state capital city of Durango in a prolific mineralized region with past-producing and operating mines including Grupo Mexico's San Martin Mine, Industrias Penoles' Sabinas Mine, Pan American Silver's La Colorada Mine and First Majestic's La Parrilla and Del Toro Silver Mines. Access and infrastructure near the Property are considered excellent with highway, rail and power lines nearby.

First Majestic acquired the La Joya Property as part of its acquisition of SilverCrest Mines Inc. (SilverCrest) in 2015. In 2013, Silvercrest disclosed a mineral resource estimate for the Property that was reported to conform to CIM definitions for resource estimation. A qualified person of Silver Dollar has not done sufficient work to classify this historical resource and the Company is not treating it as a current mineral resource. Independent data verification and an assessment of the mineral resource estimation methods are required to verify the historical mineral resource.

Key assumptions, parameters, and methods used to prepare the historical mineral estimate:

-89 holes totaling 30,085 metres (m).
-Raw assay data was composited to 2 metres, capped at 550 gpt Ag, 5.5 gpt Au 6% Cu and interpolated into a block model using 5 m x 5 m x 5 m block size using inverse distance squared (ID2) methodology.
-Silver equivalency formula assumes Ag:Au is 50:1, Ag:Cu is 86:1, based on US$24/oz silver, US$1200/oz gold, US$3/lb copper and 100% metallurgical recovery.
-Mining by open-pit methods.
-Mining and process costs assumptions not specifically stated.

"The signing of the definitive agreement to acquire the La Joya project is a very important milestone for us,” said Mike Romanik president of Silver Dollar. “We engaged some expert help to assist in our due diligence review of the historical data on the project and the unanimous feedback is that La Joya has incredible exploration and development potential, particularly in light of the significant move in metals prices since we signed the letter of intent.”

The Company is in the process of finalizing its initial exploration program for the Property and will provide an update in due course.

Under the terms of the Definitive Agreement, Silver Dollar may exercise the first option and acquire an initial 80% interest in the First Majestic subsidiary holding the La Joya Silver Project by:

a. paying to First Majestic a total of $1,300,000 plus annual holding costs for the Property, of which::

-$300,000 upon execution of the Definitive Agreement,
-$200,000 on or before the first anniversary of the Definitive Agreement,
-$200,000 on or before the second anniversary of the Definitive Agreement,
-$300,000 on or before the third anniversary of the Definitive Agreement, and
-$300,000 on or before the fourth anniversary of the Definitive Agreement;
b. incurring exploration expenditures on the Property of not less than $1,000,000 within three years of entering into a surface rights agreement relating to the Property, but in any event within five years of the date of the Definitive Agreement; and:

c. issuing to First Majestic, within 45 days of the date of the Definitive Agreement, such number of common shares of the Company as is equal to 19.9% of the then-issued and outstanding shares of Silver Dollar.

If Silver Dollar incurs at least $1,000,000 of exploration expenditures on the Property within three years of the date of the Definitive Agreement, First Majestic will waive the third- and fourth-anniversary cash option payments described above totalling $600,000.

In addition, First Majestic will reserve a 2% net smelter returns royalty interest in all minerals produced from the Property.

Within 30 days after exercising its first option, Silver Dollar may exercise its second option and acquire the remaining 20% interest in the subsidiary that owns the La Joya Silver Project by delivering notice and issuing to First Majestic the number of shares as is equal to 5% of the then-issued and outstanding shares of Silver Dollar.

If Silver Dollar exercises its first option, but elects to not exercise its second option, Silver Dollar and First Majestic will be deemed to have formed a joint venture with respect to the Property.

-Red Lake Area Properties:

RED LAKE MINING DIVISION:

The Red Lake area in northwestern Ontario has produced over 29 million ounces of gold and is one of Canada’s most prolific gold mining districts. The discovery of gold under the roots of an upturned tree, by brothers Lorne and Ray Howey, in the summer of 1925 led to North America's last great gold rush and by 1926 over 3,000 people had converged on the Red Lake area to seek their fortunes. Today, the Red Lake District is composed of five communities, all built around 28 past-producing or currently operating gold mines. This is a mining-friendly, politically stable jurisdiction with a skilled labour force and infrastructure built to serve the mining industry.

Silver Dollar currently has two discovery-stage projects in the Red Lake Camp.

Pakwash Lake Property:

Silver Dollar entered into an option agreement in November 2019 to earn a 100% interest in the Pakwash Lake property, subject to a 1.5% net smelter returns ("NSR") royalty. Located approximately 30 kilometres (km) south-southeast of the town of Red Lake, the 4,252-hectare property is situated in a structurally active area of the Red Lake Mining Division where exploration activity has been re-energized with the success of Great Bear Resources and the numerous high-grade gold discoveries on their Dixie property. Other active neighbours in the area include BTU Metals who have been drilling a potential Cu-Ag-Au VMS discovery called the TNT Target that adjoins the northern boundary of the Property.

A high-resolution airborne magnetic (MAG) survey completed by Laurentian Goldfields in 2011 identified the numerous geophysical features on the property including two dominant east-west trending MAG lineaments. These lineaments are interpreted to be the Pakwash Lake Fault Zone (PLFZ) and Sydney Lake Fault Zone (SLFZ), which are deep-seated crustal-scale features and important markers for exploration in the region and warrant further investigation.

The Pakwash Lake and Sydney Lake faults and splays run through the property (Figure 3) and orogenic gold deposits are typically associated with crustal-scale fault structures, although the most abundant gold mineralization is hosted by lower-order splays from these major structures (Kerrich et al. 2000). The property is fully permitted for exploration and drilling.

To acquire the Pakwash Lake property (consisting of 18 multi-cell mining claims), Silver Dollar must pay the Optionor $131,000 in cash payments over four years. Once the Option consideration is paid in full, then it shall be deemed to have earned a 100% undivided interest in the property, subject to a 1.5% NSR royalty. Silver Dollar will have the right to purchase 0.75% of the NSR royalty for $500,000 at any time.

Longlegged Lake Property:

Silver Dollar entered into an option agreement in January 2019 to earn a 100% interest in the Longlegged Lake property, subject to a 1.5% NSR royalty. Located approximately 30 kilometres (km) south of the town of Red Lake, the 2,597-hectare property is situated in a structurally active area of the Red Lake Mining Division where exploration activity has been re-energized with the discovery success at Great Bear's Dixie Gold Project. Other active neighbours in the area include BTU Metals, who announced in December 2019 they had staked a large claim package adjoining the northern boundary of the property (Figure 1) to expand their Dixie-Halo property where they have been drilling a potential Cu-Ag-Au VMS discovery called the TNT Target; and Golden Goliath Resources, who recently announced their Kwai property to the north-east of the property along the PLFZ has been found to host a repetition of the same sequence of rocks that hosts the LP Zone on Great Bear's Dixie property.

In the spring of 2019, Silver Dollar completed a heliborne high-resolution magnetic (MAG) survey on the property that identified dominant northeast-southwest MAG lineaments interpreted to be the deep-seated crustal-scale PLFZ.

The MAG survey, that included a total of 1,837 line-km on 25-meter line spacing, also identified many curved lineaments which could be related to shearing and folding where dilation zones may have enabled mineralization to occur. Fieldwork underway will include soil sampling, geological mapping and prospecting to follow up on the key structures identified by the MAG survey.

To further evaluate the anomalous gold in soils along the PLFZ, in 2020 Silver Dollar completed prospecting and soil sampling of areas interpreted to be prospective to host gold mineralization. A till sampling program of 30 samples was completed to assess the potential of gold in basal till down ice direction of the PLFZ. These samples were sent to Overburden Drilling Management in Nepean, Ontario. for determination of the presence of gold grains. Gold grains within the samples will be classified as to their shape and size to help determine proximity to the potential source. The results of the sampling have been recently received and are being integrated into the exploration model.

The next phase of exploration is comprised of two areas of Induced Polarization (IP) surveying which is ongoing. The two grids were selected using the interpretation of the airborne magnetics. The IP survey is intended to define sulfide mineralization within or adjacent to the PLFZ. In other locations within the Red Lake area, sulfide mineralization is associated with gold values.

To acquire the Longlegged Lake property (consisting of eight multi-cell mining claims), Silver Dollar must pay the Optionor $85,000 in cash payments over four years. Once the Option consideration is paid in full, then it shall be deemed to have earned a 100% undivided interest in the property, subject to a 1.5% NSR royalty. Silver Dollar will have the right to purchase 0.75% of the NSR royalty for $500,000 at any time.


Silver Dollar Resources Inc.. is traded on the OTCQB under the ticker symbol SLVDF. This is not investment advice. Please view the disclaimer found on this website.
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