Mitre Mining (ASX: MMC) has described December as a “pivotal” quarter following its acquisition of the game-changing Cerro Bayo silver-gold project in Chile.

The company has told shareholders in its December quarterly report that it has already developed a strategy to define and rapidly grow the existing near-mine resource base at Cerro Bayo with a 6,000m drilling program expected to commence in February.

As part of its strategy to grow the project’s silver and gold resource, Mitre is planning to apply modern exploration techniques to deliver further step-change discoveries.

It is also putting in place a program of baseline-permitting work for future operations.

Executive director Ray Shorrocks said Mitre will focus its strategy on extending and in-filling the near-mine mineralisation with the goal of releasing two resource upgrades in 2024.

“Mitre is poised to generate substantial, rapid growth for its shareholders by growing the resource at Cerro Bayo,” Mr Shorrocks said.

“We believe we have a huge opportunity at Cerro Bayo because there is already a significant resource along with extensive known mineralisation waiting to be brought into the resource with further drilling.”

He also noted that Cerro Bayo offers an opportunity for near-term production thanks to the existing plant and infrastructure that is part of the recent acquisition.

“We plan to capitalise on this opportunity by starting a drilling program in the next few weeks, driving strong news flow.”

Key acquisition

Mitre believes its 100% acquisition of the Cerro Bayo project can transform it into a significant silver-gold exploration company with the project’s existing joint ore reserves committee inferred resource estimate standing at 3.82 million tonnes at a grade of 206 grams per tonne silver equivalent for 24.7 million ounces of contained silver equivalent with scope for significant short-term resource growth.

The project also includes the 500,000 tonnes per annum Cerro Bayo flotation plant and mining infrastructure and a mining claim package covering in excess of 300 sq km.

Rich history in prime location

The project is located in the Asyen region of Southern Chile and commenced production in 1996, generating over 91Moz of silver equivalent.

Cerro Bayo lies on the Western margins of the Deseado Massif, considered one of the world‘s premier epithermal gold-silver mining provinces globally, hosting quality deposits such as Cerro Negro (Newmont) and boasting an endowment of more than 20Moz gold and 450Moz silver.

The project has over $150m worth of on-site infrastructure to support exploration and low-cost restart of the mine.

The operational 500ktpa silver-gold float plant has historical recoveries of +90% for both silver and gold and underpins the site infrastructure with an extensive integrated power network generating excess capacity as well as 800 litres of water rights.

The site also has an extensive mine and administration office complex, light and heavy vehicle workshops and fully stocked warehouses.