Minera Sierra Madre Exploraciones, a subsidiary of Sierra Madre Developments, has signed an agreement with Procesadora de Minerales de Durango, to conclude atleast 2500 m core drilling at the Penoles Project located in the Durango Silver Belt of Mexico.
The project has two silver mines including San Rafael and Jesus Maria, a partly defined gold prospect, the El Capitan and many targets at the beginning stage that covers over half of the Penoles Mining District.
During the 2011 drill program at the El Capitan, hole DDH 11-07 intersected 0.42 g/t Au at 108.4 m and hole DDH 11-17 intersected around 0.82 g/t Au. A single hole was drilled below the existing mining works at Jesus Maria silver mine, which validated the presence of silver deposits even deeper. Presently, another company, Argonaut Gold, is performing heap leach mining at the El Castillo deposit, which is adjacent to the El Capitan. The initial bottle roll analysis of El Castillo has pointed out that El Capitan mineralization may be subjected to cyanide leaching. Hence, delineation drilling at Jesus Maria and El Capitan will be the next step taken by Sierra Madre.
In addition, Sierra Madre has signed an initial contract for six months with Vancouver based Trident Financial and Toronto based FronTier Consulting to organize promotional road shows and to introduce the company to retail and institutional investors. The contract may be extended on a mutual consent basis between the companies.