News

July 25, 2008

Silver Standard Due A Pay Day As Geologix Explorations Delivers Up One Of Mexico’s Larger Polymetallic Bulk Tonnage Projects

By Our Canadian Correspondent

Sometimes exploration success comes at a price, and this is a fact that the management and shareholders of Geologix Explorations are currently having to face up to. Thanks to its exploration acumen, Geologix has transformed a historical resource of 11.2 million tonnes averaging 0.96 grams gold and 12.86 grams silver in the Main Zone of its San Agustin gold-silver-zinc property in Mexico into a new 43-101 complaint resource estimate containing nearly 1.6 million ounces of gold and over 41 million ounces of silver. Sounds good, so what’s the issue?

Well, under the 2006 deal with Silver Standard Resources, Geologix had to issue one million shares and spend US$2 million on exploration drilling within two years. The junior also had to prepare a resource estimate based on 15,000 metres of drilling and pay Silver Standard based on the amount of contained gold and silver in the estimate. With this in mind, Geologix confined its drilling to only the known Main Zone and to Zone II, in an effort to limit the payout. Still, the new resource came in...