Andean Silver (ASX: ASL) believes it is set for substantial resource growth at the Cerro Bayo project in Chile following a host of positive exploration results not included in the current mineral resource estimate.

The drilling assays, rock chip samples and newly-identified veins have been discovered since the company acquired the project in February and are expected to be incorporated into a resource update scheduled for release before year-end.

Channel samples and rock chips taken during the three months to the end of September returned bonanza grades over an initial area of 4 kilometres by 1.8km, including 9,929 silver equivalent (2,351 grams per tonne silver and 91.3g/t gold) and 4,650g/t AgEq (1,845g/t silver and 33.8g/t gold).

Resource increase

Cerro Bayo’s current resource sits at 8.3 million tonnes grading 342g/t AgEq for 91 million ounces AgEq, having experienced a 64% increase in tonnes and an 80% increase in total ounces during the period.

The potential for additional substantial resource increases has been highlighted by extensive outcropping veins that Andean has defined over a large standalone area.

The outlook is also underpinned by strong drilling results from the Pegaso 7 area, where Andean intersected high-grade mineralisation over a 600m strike length to a 300m depth, which remains open in all directions.

Best assays were 5.85m at 807g/t AgEq (351.6g/t silver and 5.5g/t gold) including 0.9m at 4,649g/t AgEq (2,107g/t silver and 30.6g/t gold), 1.6m at 642g/t AgEq (601.6g/t silver and 0.5g/t gold) including 0.75m at 1,093g/t AgEq (1,085g/t silver and 0.1g/t gold) and 1.1m at 1,100g/t AgEq (408g/t silver and 8.3g/t gold).

Updated model

Andean chief executive officer Tim Laneyrie said the company was “just getting started” at Cerro Bayo.

“The wealth of outstanding drilling results we have generated since acquiring this project remains outside the resource, and we are now in the process of updating the inventory to bring these results into our resource model,” he said.

“We have highlighted the potential for further substantial resource increases beyond the next update, with the discovery of extensive vein systems over a very large area [and] the bonanza rock chip results from this area demonstrate the huge ongoing upside at Cerro Bayo.”

Mr Laneyrie said there was “overwhelming evidence” that Cerro Bayo had potential for vast and high-grade growth at a time when the outlook for silver is strong and a large supply deficit is imminent, driven by the growing use of the metal in solar panels and other technologies.