Updated Mineral Resource Estimate, San Luis Project, Ancash Department, Perú” Dated January 9, 2009
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Updated Mineral Resource Estimate San Luis Project, Ancash Department, Perú Prepared for Silver Standard Resources, Inc. Suite 1180, 999 West Hastings Street Vancouver, British Columbia, Canada V6C 2W2 And Esperanza Silver Corporation 1580 Lincoln Street, Suite 680 Denver, CO 80203 Prepared by Resource Modeling Incorporated 1960 West Muirhead Loop Tucson, AZ 85737 And Resource Evaluation Incorporated 2475 North Coyote Drive Tucson, AZ 85745 January 9, 2009 San Luis Project Ancash Department, Peru Table of Contents Section ...................................................................................................... Page 1.0 SUMMARY ..................................................................................................1 1.1 Project Location, Description, Physiography, Climate and History....1 1.2 Regional and Local Geology, Deposit Type, and Mineralization.........2 1.2.1 Regional Geology....................................................................2 1.2.2 Local Geology..........................................................................2 1.2.3 Deposit Type and Mineralization............................................3 1.3 Status of Exploration, Development, and Operations..........................3 1.4 Estimate of Mineral Resources ..............................................................4 1.5 Conclusions and Recommendations.....................................................5 1.5.1 Conclusions.............................................................................5 1.5.2 Recommendations ..................................................................6 2.0 INTRODUCTION AND TERMS OF REFERENCE .................................................7 3.0 RELIANCE ON OTHER EXPERTS........................................................................9 4.0 PROJECT LOCATION AND DESCRIPTION .......................................................10 4.1 Project Location ....................................................................................10 4.2 Project Description................................................................................11 5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ................................................................................................14 5.1 Accessibility ..........................................................................................14 5.2 Climate ................................................................................................14 5.3 Local Resources and Infrastructure ....................................................14 5.4 Physiography.........................................................................................14 6.0 HISTORY ................................................................................................16 7.0 GEOLOGIC SETTING ..........................................................................................17 7.1 Regional Geology..................................................................................17 7.2 Local Geology........................................................................................20 8.0 DEPOSIT TYPE ................................................................................................24 9.0 MINERALIZATION ...............................................................................................25 9.1 Ayelén Vein ............................................................................................26 9.2 Inéz Vein ................................................................................................29 10.0 EXPLORATION ................................................................................................30 10.1 2005 Exploration Program ....................................................................30 10.2 2006 Exploration Program ....................................................................30 10.3 2007 Exploration Program ....................................................................33 11.0 DRILLING ................................................................................................34 11.1 Diamond Core Data ...............................................................................34 11.2 Results of the Drilling Programs..........................................................37 11.3 Sample Length Versus True Thickness...............................................38 11.4 Orientation of Mineralization ................................................................38 12.0 SAMPLING METHOD AND APPROACH ............................................................39 Resource Modeling Inc. i Updated San Luis Resource Resource Evaluation Inc. January 9, 2009 San Luis Project Ancash Department, Peru 12.1 Description of Sampling Methods........................................................39 12.2 Drilling and Sampling Factors..............................................................39 12.3 Core vs. Chip-Channel Sample Quality ...............................................39 12.4 Geologic Controls – High-grade Zones ...............................................42 12.5 Summary of Relevant Samples ............................................................43 13.0 SAMPLE PREPARATION, ANALYSES AND SECURITY...................................44 13.1 Sample Preparation Procedures ..........................................................44 13.2 Sample Analytical Procedures .............................................................44 13.3 Sample Security and Chain of Custody Procedures ..........................45 14.0 DATA VERIFICATION..........................................................................................46 14.1 Electronic Database Verification..........................................................46 14.2 Review of QA/QC Results .....................................................................48 15.0 ADJACENT PROPERTIES ..................................................................................51 16.0 MINERAL PROCESSING AND METALLURGICAL TESTING............................52 16.1 Metallurgical Composite Samples .......................................................52 16.2 Test Procedures ....................................................................................53 16.3 Test Results ...........................................................................................54 16.4 Conclusions...........................................................................................55 17.0 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES.......................56 17.1 Sample Data...........................................................................................56 17.2 Geologic Data ........................................................................................56 17.3 Topographic Data..................................................................................56 17.4 Bulk Density Data..................................................................................56 17.5 Assay Statistics.....................................................................................58 17.6 Grade Capping.......................................................................................64 17.7 Compositing ..........................................................................................68 17.8 Vein Wireframe Construction ...............................................................68 17.9 High-grade Wireframes .........................................................................69 17.10 Variography ...........................................................................................70 17.11 Grade Estimation...................................................................................72 17.12 Model Verification..................................................................................74 17.13 Resource Classification........................................................................79 17.14 Mineral Resource Tabulation ...............................................................79 18.0 OTHER RELEVANT DATA AND INFORMATION ...............................................81 19.0 INTERPRETATION AND CONCLUSIONS ..........................................................82 19.1 Interpretation .........................................................................................82 20.0 RECOMMENDATIONS ........................................................................................83 21.0 REFERENCES ................................................................................................84 22.0 DATE AND SIGNATURE PAGE ..........................................................................85 23.0 ADDITIONAL REQUIREMENTS FOR TECHNICAL REPORTS ON DEVELOPMENT PROPERTIES AND PRODUCTION PROPERTIES.................87 Resource Modeling Inc. ii Updated San Luis Resource Resource Evaluation Inc. January 9, 2009 San Luis Project Ancash Department, Peru List of Figures .............................................................................................................. Page Figure 4-1: San Luis Project Location Map............................................................................ 10 Figure 7-1: Regional Geology ................................................................................................ 19 Figure 7-2: Property Geology Map......................................................................................... 21 Figure 9-1: Satellite View of the Major Veins of the San Luis Project.................................