Mitre Mining (ASX: MMC) has identified extremely high-grade mineralisation with new exploration results at its Cerro Bayo silver-gold project in southern Chile.

The company believes that new rock chip assays of up to 10,466 grams per tonne silver equivalent have confirmed the discovery of another potential swarm of silver-gold veins at Cerro Bayo.

One assay in particular returned over 6,000g/t silver and 51g/t gold.

Mitre completed its 100% acquisition of Cerro Bayo in late February and has wasted no time implementing its strategy to rapidly grow the project’s existing inferred resource of 3.82Mt at 206 g/t, for 24.7Moz of contained silver-equivalent.

Funding in place

The latest exploration success at Cerro Bayo comes after the company successfully raised $10m in early May with a placement receiving strong domestic and overseas institutional support from new investors and existing shareholders.

This funding is also helping to pay for a second rig that is being imported into Cerro Bayo as Mitre accelerates its exploration work.

High prospectivity

The new discoveries at Cerro Bayo were made in veins in an area known as the Guanaco Prospect, located around 7 kilometres east of the processing facility at Laguna Verde.

Chief executive officer Tim Laneyrie said the close proximity of this discovery to historically mined areas further demonstrates the under-explored, highly prospective nature of the entire project area.

“The discovery of the Guanaco vein swarm means we continue to establish an exceptional pipeline of drill targets and areas of known mineralisation,” he said.

“These areas will underpin targeted ongoing resource updates as we calculate estimates using a combination of historic drilling results and those generated from our own drilling programs, which are now progressing rapidly with a second rig about to arrive on site.”

Walk-up targets

That new rig is certain to be kept busy with Mitre’s continuing efforts to identify new walk-up drill targets throughout the broader Cerro Bayo district.

The new veins sit proximal to the existing Guanaco mining area, which has seen limited systematic exploration over the last 20 years.

Mitre is chasing the deep potential at Guanaco, which was mined predominantly by shallow open pits with limited underground operations.

Historical drilling had intercepted mineralisation to just ~50m below surface with vein widths up to 4m wide.

Pegaso 7 drilling

Elsewhere, Mitre has completed six holes at the Pegaso 7 target and the recovered material is currently at the onsite laboratory for assaying, with results anticipated in June.

Mitre’s maiden campaign is aimed at growing the existing resources through drilling at high-priority brownfields targets within a 3km radius of the processing plant.

The first targets include Pegaso 7, Cristal and extensions of the known high-grade resources at Taitao, Coyita and Delia.

Once the immediate targets within the Laguna Verde district have been sufficiently defined, the company plans to expand its exploration activity in the Cerro Bayo district and develop a compelling pipeline of regional greenfields targets.

The continuing success at Cerro Bayo comes at a time when silver and gold prices continue to climb dramatically.