Blackberry’s immediate objective is to optimize the current silver/gold resource suitable for open pit mining described by M3 Engineering in their 2012 preliminary economic assessment (PEA) of Nieves and increase the size, grade and classification of the silver and gold resource through infill and step out drilling. This will support the production of 4,000,000 to 5,000,000 ounces of silver annually for a minimum of 10 years. Such a
resource would be highly desirable to best-of-class silver miners seeking their next mineable silver resource. Achieving this objective would assure Blackberry members a positive return on their investment and de-risk the project’s future exploration. Our estimated fair valuation for this pit, after the optimization program, is $103,500,000 (in situ).
This 2012 image shows the eastern region of the Nieves property. The 2012 proposed pit is outlined in dark red.
Enlarged view of 2012 proposed pit. Red and blue dots show drilled holes.
Original Proposed Pit Perimeter 2012
M3 Engineering Form 43-101 PEA
Nieves Pit Optimization Study
• BBV believed, as of the 2012 report, that the current reported resource could be mined economically as an open pit with potential production of up to 5,000,000 silver per year for >6 years.
• Since 2003, BBV has undertaken 11 exploration programs, drilling a total of 208 core holes, 62,500 meters of core in the eastern-most portion of Nieves resulting in a reported indicated and inferred resource of 110,000,000 million oz. of silver and 116,000 oz. gold with an average yield of 40 g/t assuming 15 g/t yield cutoff. Source: Form 43-101 Technical Report Preliminary Economic Assessment (PEA) by M3 Engineering October 31, 2012
• The 2012 M3/IMC technical report was commissioned during the last silver bull market while the silver was trading above $30/oz. BBV set the minimum assayed ore cutoff at 15 grams/ton in order to maximize the size of the silver resource. Therefore, the Nieves breakeven price estimate was $21.37/oz. — $15.25 after payback. The all-in sustaining costs (“AISC”) per ounce of silver to $14.98. These economics were problematical for attracting external pre-development capital at the then silver price.
• A preliminary in-house study, prepared in 2017, indicated that the 2012 PEA original pit perimeters,
redrawn to increase the minimum acceptable silver ore grades to 45g/t silver, would yield 53,059,856 oz. silver with an average ore grade of 2.72 oz./tonne (77.19g/t).
• The internally prepared study of 2017 concluded that the core drilling results to date supports the feasibility of an initial starter pit with an annual output of 5,000,000 oz. silver equivalent with a life of mine 6 years assuming $17 silver.
• In early April 2018 BBV commissioned IMC and M3 to undertake a pit optimization study using the data collected for the 2012 43-101 PEA. The purpose of this study was to determine the economic feasibility of reconfiguring the original pit shell perimeters to increase ore grades, while reducing average stripping ratio, capex, all-in sustaining mine costs and all-in breakeven using current gold and silver prices.
• The independent study undertaken by IMC supports BBV’s internal study and concludes that the drilling to date supports an initial starter pit and identifies the potential to expand the existing resources within the area of the initial pit shell and to extend the initial pit shell along the strike of the Concordia vein system from 1100 meters to 1780 meters.
Goals, Objectives, and Results of the IMC Pit Optimization Study
Goals and Objectives
• To determine if additional core drilling can provide an economic, open pit starter silver/gold mine.
• To focus on the original open pit plan created by Caracol Creek in 2012.
• To engage the best independent third-party mining engineering firm (IMC Corp) to re-analyze the 2012 43-101 data base to determine number and location of drill program(s).
• To determine the possible extension life-of-mine (LOM)
consistent with silver miners current resource acquisition criteria, >10 years.
• To develop a mining plan capable of producing a minimum 10-year LOM (open pit) and with average silver equivalent production greater than 4 million ounces of silver per year.
• To minimize both initial and sustaining costs of capital expenditures and silver equivalent cost per ounce to <$10 per ounce.
• The all-in sustainable costs using the current known and assessed resource for a 6-year life-of-mine (LOM ) optimized pit are estimated at $13.30/ounce silver which decline to below $11.64 with the anticipated results from further planned infill and step-out drilling.
• With additional infill and step-out drilling, the feasibility of a 13.4 mine life with sustainable average annual production of 4,300,000 ounces of silver.
• With all-in sustainable costs estimated at less than $11.64/ounce silver equivalent.
• High grade drill intercepts 800 meters west of the La Quinta Vein, part of the Concordia Vein System suggest continuity of the Concordia vein system with ore grades increasing to the west.
Pit Optimization Plan
Goals and Objectives of the Pit Optimization
• Increase the average reported ore grade to 86 g/t within an optimum starter pit perimeter.
• Increase the resource classifications from indicated and inferred to measured / indicated.
• Increase the reported and assessed resource within the optimum pit perimeter to from 30,495,079 to >69,000,000 ounces silver.
Drilling Program No. 12 Step out and Infill
• A carefully planned 101 hole drilling campaign consisting of two targets:
• La Quinta East and La Quinta West Veins part of the Concordia Braided Vein System.
• Drill 50 , core holes averaging 270 meters east and west along the La Quinta East and La Quinta West Veins on 50 meter centers.
• Drill selective step back holes in the La Quinta East and La Quinta West Veins to deeper depths to confirm high gold and silver grades encountered in previously drilling campaigns.
• Verify vein continuity and the results from previously drilled holes along the LaQuinta West Vein using <100 meter spacing..
• Drill 51, core holes averaging 270 meters: in the Concordia East and Concordia West Veins on 50 meter centers; Drill westward along the Concordia Vein on 50/100 meter centers to extend the Concordia Vein silver and gold mineralization 1800 meters west to the three high value Orion Vein intercepts; Drill the Concordia Vein System east to west footwall mineralization to increase silver tonnage.
Third party resource report
Secure an updated Form 43-101 PEA upon assessing results of the Pit
Optimization Drilling Program .
$5,000,000 fully burdened
January 1, 2020 - December 31, 2020
1785 Meter Length of the Concordia Vein
• Estimated 69 million ounces of silver (42 million tonnes at 5000 TPD)
• Support a 10+ year Life of Starter Mine
Comparison of M3’s 2012 Preliminary Economic Assessment with
IMC’s 2018 Pit Optimization Study
Value Proposition Pit Optimization
• Funding Required for Pit Optimization (fully burdened): $ 5,000,000
• Pit Resource Fair Valuation pre-optimization: $ 45,742,646
• Pit Resource Fair Valuation post-optimization: $ 103,500,000
• Uplift: $ 52,757,355
Pit Optimization Timeline
• 12 months/12 months cumulative
Goals and Objectives of Pit optimization Plan
• Increase the average ore grade from 40.1 g/t to 85.05 g/t through high-grading, redrawing the pit shale perimeters to include only the higher grade intercepts.
• Increase the size of the reported high graded pit silver ore body contained with in the new perimeters of the optimized pit from 10,165,032 tonnes to 23,000,000 tonnes
• Increase the size of the silver resource contained within the new perimeters of the optimized pit by >2-fold from 30,495,097 ounces to 69,000,000 ounces
• Increase the resource classifications from indicated and inferred to measured, indicated and inferred.
• Assure project development feasibility at current silver prices.
• De-risk Nieves Pit Expansion and Further Exploration of the Nieves Silver Property.
• Assure marketability and desirability of the Nieves to silver miners
Use of Funds
• $ 3,000,000 to drill and core the 101 holes pursuant to Pit Optimization Plan
• $ 600,000 to retire short term debt
• $ 500,000 to sustain Blackberry and Nieves through to Pit Optimization Phase
• $ 250,000 to update the Form 43-101 PEA post pit optimization program
• $ 150,000 contingency
• $ 5,000,000 total
Anticipated Fair Value of the Nieves Pit Resource Post Optimization
Assume a found, reported, and assessed resource of 69,000,000 ounces of silver equivalent, $15 average price of silver over life-of-mine (LOM), $1.50 estimated value of an ounce of mineable silver resource in the ground for a fair valuation of $103,500,000.
Value Proposition Pit Optimization