When I went to visit that mine over a year ago, I recall the exploration plan suggested that higher grade zones would be uncovered at some of the peripheral targets on the property area controlled by the company. This is now being proven up with the latest drill results. However, these zones are far from the developed workings and mill infrastructure. So they are encouraging and will count towards expansion of the resource base, but the company has chosen to develop the veins closest to the current workings and extend outward from there. The material that is currently running through the mill is good grade to earn operating profits. As the processing capacity and mine production increases, the recurring internally generated profits will allow growth to continue to these new zones. Its a good plan, IMO, and one that the market has not put a premium on right now. SEG is one of the few juniors in Mexico that is living within its means and delivering real growth for shareholders.

As for the results posted today, just consider that the mine has been able to operate with 1.5-2m of clearance in the underground workings. So an intercept of 3200 g/t silver across 50cm is about the same as hitting 800g silver across 2m. They would be blasting the whole vein plus wall rock to that width, and then mucking it all out and shipping it to the mill with plenty of high grade ore to pay for it all. In fact, there is probably lower grade silver credits that would be carried in the wall rock so the average grade of the entire rock mass that was excavated would be slightly higher. We know the company has tuned the mill to get reasonable recovery efficiency already. This is good rock and a good zone to develop in the future.

cheers!

mike

Voluntary disclosure: I own shares of SEG and the company is a paid advertiser on smartinvestment.ca