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Prospero Provides Drilling Update for El Petate Project

Identifies Three Zones for Deeper Drilling

Vancouver, British Columbia–(Newsfile Corp. – January 10, 2018) – Prospero Silver Corp. (TSXV: PSL) (“The Company” or “Prospero”) is pleased to provide a final update on the first-stage reconnaissance drilling of its Petate project in Hidalgo state, Mexico. Twelve shallow holes were completed primarily to establish structure and to allow for more accurate targeting of deeper mineralized zones. The first 5 holes were reported in November 2017 (see news release dated November 18, 2017). The drilling at Petate is being carried out as part of its reconnaissance drilling campaign of 3 targets financed by strategic partner Fortuna Silver Mines Inc.

Tawn Albinson, the President of Prospero Silver commented: “Petate is the second project of three selected for first-pass drilling as agreed with our strategic partner Fortuna Silver. Under our arrangement with Fortuna, when we have completed drilling three projects, they have the right to select one for a joint venture. We are happy with the results at El Petate. In particular, holes 1, 9 and 11 have highlighted interesting grades over intervals of up to 24.9m downhole, although with unknown strike extent, indicating prospective deeper targets for a follow-up program. We are strongly aligned with Fortuna to drill as many of Prospero’s projects as possible, hence the plan to mobilise onto the next target, Pachuca SE, as soon as possible — hopefully in January. The Pachuca SE target lies about 20km southeast of the Vizcaina vein, one of the largest silver-rich epithermal veins in the world.”

Cross sections for all holes, and a table of drill collar locations, dips and azimuths are available on Prospero’s website here: http://www.prosperosilver.com/s/ElPetate.asp. Assay results have now been received for the remaining 7 holes (PET-17-06 to 17-12). Drill highlights include:

Hole No. From (m)* To (m)* Interval (m) Au g/t Ag g/t
PET-17-09 6.2 31.1 24.9 0.76 22.4
43.8 56.4 12.6 0.51 Tr
PET-07-11 26.6 42.6 16.0 0.75 1.97
PET-07-12 66.0 69.9 3.9 1.18 3.71


*Drill intercepts have
been rounded to the nearest 5cm throughout this release.

El-Tajo Zone

Hole PET-17-06

Hole PET-17-06 drilled into the El Tajo target beneath and parallel to hole 17-05 with an azimuth of 325. (Hole 17-05 returned a best interval of [email protected] 0.8g/t Au + 5.0 g/t Ag with poor recoveries) Hole 17-06 was stopped at 165.6m and cut multiple mineralized zones including:

From (m) To (m) Interval (m) Au g/t Ag g/t Zn %
0 14.7 14.7 0.19 1.97
25.7 26.8 1.1 tr 10.2 1.48
44.0 54.0 10.0 0.49 24.1 Tr
60.3 63.5 3.2 1.96 34.2 0.11


NB: The true width of the mineralized intercepts is uncertain.

From surface to 14.7m the hole cut alluvium with clasts of jasperoid and andesites. The gold-bearing intervals from 44m to 54m and from 60.3m to 63.5m are hosted in fragmented black jasperoid after limestone, and correspond to the 18.5m @ 0.8g/t Au reported for hole PET-17-05. From 63.5m to the end of hole, 17-06 cut fresh dolomitized limestones.

Hole PET-17-06 also hosts several intercepts with elevated Ag, Pb, and Zn values including;

  • 0.2 m of 30 g/t Ag, 2% Pb, 4.7% Zn from 26.6m downhole;

  • 1.5m of 0.43 g/t Au, 117 g/t Ag from 51.15m; and

  • 0.25m of 1.21 g/t Au, 271 g/t Ag, 0.12% Pb, and 0.13% Zn from 62.55m downhole.

This suggests that the Tajo target area has potential at depth to zone into precious metal-enhanced base metal mineralization.

Hole PET-17-07

Holes 17-07 and -08 were drilled from the same collar position as hole 17-06, but on a section line oriented roughly northeast-southwest. (Hole 17-07 azimuth roughly SW, 17-08 azimuth to the northeast). The hole cut reddish muddy alluvium with local jasper fragments from surface to 31.6m. From 31.6m to the end of hole at 93.2m it cut limestone with a jasperoidal zone from 48.9m to 54.4m. Interestingly it returned anomalous gold mineralization for much of its length as follows:

From (m) To (m) Interval (m) Au g/t Ag g/t
12.3 31.6 19.3 0.32 1.15
48.1 60.9 12.8 0.28 6.03


NB: The true width of the mineralized intercepts is uncertain.

Hole PET-17-08

Hole 17-08 was drilled from the same collar position as hole 17-07. It ended at 165.2m in fresh limestone. The hole returned 2 anomalous gold intersections with a best of 11.8m @ 0.15g/t Au from 13.3m downhole hosted by a zone of jasperoidal breccia with silica-calcite veining. A second jasoperoid from 53.8m downhole returned 7.3m @ 0.14g/t Au + 11.5g/t Ag. Both zones appear to be steeply dipping and possibly correlate with surface outcrops of jasperoid.

Apartadero SE Target

Hole PET-17-09

Hole 17-09 was drilled across the trace of hole PET-10-01 roughly from north to south to investigate the intersection of 3.4m @ 3.5g/t Au noted from 81.9 to 85.3m in hole PET-17-01 (see news release dated November 8, 2017). The hole cut multiple gold-bearing zones as follows:

From (m) To (m) Interval (m) Au g/t Ag g/t
6.2* 31.1 24.9 0.76 22.4
including 7.3 1.27 2.21
43.8 56.4 12.6 0.51 0.52


NB: The true width of the mineralized intercepts is uncertain.
* Recoveries between 6.5m to 31m were poor — approximately 20% recovery of sand, jasperoid fragments and marble.

The intercept from 43.8m appears to be the zone seen in hole 17-01 albeit deeper in the section, suggesting a steep dip to the zone. The highest grade in hole 17-09 was from a 40cm sample which returned 3.5g/t Au from 43.8m downhole. The zone has now been traced for 50m vertitcally below where hole 17-01 cut it.

Hole PET-17-011

Hole 17-11 was drilled from a collar roughly 150m south of 17-09 with an azimuth approximately due north again investigate the intersection of 3.4m @ 3.5g/t Au noted in hole PET-17-01. The hole appears to have cut the same zone from roughly 26.7m to 42.7m downhole, returning 16m @ 0.75 g/t Au and 2g/t Ag (see cross section).

Hole PET-17-012

Hole 17-12 was the last hole drilled in the current program at Petate from a collar roughly 50m south of hole 17-11, with an azimuth north-northeast to test beneath the intercept reported above for hole 17-11. The hole was stopped at 216.2m in limestone after cutting 3 jasperoid zones. Prospero’s geologists believe the zone in hole 11 was cut between 66m to 69.9m downhole implying its dip has flattened. This zone returned 3.9m @ 1.2 g/t Au + 3.7 g/t Ag. A second zone from 176.5m downhole returned 4.4m @ 13.6 g/t Ag with trace anomalous gold.

Future Drilling

Prospero and its strategic investor Fortuna Silver Mines Inc are systematically drill testing a number of targets in Prospero’s portfolio. Following the completion in December 2017 of the planned 12 holes at El Petate, Prospero is now planning to drill its Pachuca SE target, 20-25km southeast of the historic silver mining city of Pachuca. A 3-4-hole, ±1,800m program is scheduled to begin as soon as the final drill permits have been received.

Qualified person

Tawn Albinson, MSc, president of the company, is a qualified person, as defined in National Instrument 43-101, and is responsible for the technical content of this news release. Mr. Albinson is a member of the American Institute of Professional Geologists and a certified professional geologist (CPG) No. 11368.

About Fortuna Silver Mines Inc.

Fortuna is a growth-oriented, precious metals producer focused on mining opportunities in Latin America. The company’s primary assets are the Caylloma silver mine in southern Peru, the San Jose silver-gold mine in Mexico and the Lindero gold project in Argentina.

About Prospero Silver Corp.

Prospero is a Mexico-focused project generator listed on the TSX.V under the symbol PSL.V. Prospero’s aim is to discover world-class precious metal projects in the major mineral belts of Mexico. The Company applies a unique blend of practical exploration experience, cutting-edge mineral deposit science, and an extensive knowledge of Mexico´s geology to find new gold and silver systems. Our exploration programs are run by a small but highly-focused geological team based in Mexico.

For further information please contact:

Ralph Rushton
Exec VP Business Development
Tel: 604 307 0055

William Murray
Chairman
Tel: 604 288 2553

Forward-Looking Statement Cautions:

This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to, among other things, the Company’s drilling update. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that Forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include, possible, accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise the additional funds in the future to continue to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.

This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of securities of the Company in any jurisdiction in which such offer, solicitation or sale would be unlawful, including any of the securities in the United States of America. The Company’s securities have not been and will not be registered under the United States Securities Act of 1933 (the “1933 Act”) or any state securities laws and may not be offered or sold within the United States or to, or for account or benefit of, U.S. Persons (as defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration requirements is available.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

THIS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

 

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