A Western Australian based exploration company, Pacifico Minerals Ltd (ASX: PMY) holds its interests in Colombia and Australia. The company focuses on the advancement of the Sorby Hills JV Project in Western Australia, that is situated at around 50 kilometres to the northeast of Kununurra. Pacifico holds 75 per cent interest in the JV while the rest 25 per cent is owned by Henan Yuguang Gold & Lead Co. Ltd.
The Sorby Hills JV Project is supported by established infrastructure like port facilities, that enables fast-track production. The existing sealed roads between the Sorby Hills site and the facilities at Wyndham Port allow the transportation of concentrate between the sites. The company intends to develop a large lead-silver-zinc deposit at the Project. The Pre-Feasibility Study results have confirmed that the Sorby Hills Project is a high-margin and high-quality base metals project.
Pacifico has today released its quarterly activities and cashflow reports for the quarter ending 30th June 2019. Let us take a look at the activities undertaken by Pacifico at its Sorby Hills JV Project during the quarter:
Drilling Campaign Updates
Phase I Drilling Campaign
The company provided an update on Phase I drilling campaign results in May this year. The results that were based on the testing of B, C, DE, F and I deposits at the project, confirmed that C, DE, and F deposits are connected and could be addressed as a single deposit with a strike length of more than 1.7 km. Pacifico informed that the CDEF Deposit (grouped C, DE, and F deposits) might now be minable with a single open cut.
CDEF Deposit – Drilling at this grouped deposit provided a geological knowledge of the controls and continuity to the company, allowing a substantial part of the Inferred Resources to be transformed into Indicated Resources (when combined with infill drill spacings).
The following intersections were received by Pacifico:
- Central Part of the CDEF Deposit: Intersections included ACD046 with 20.0 m of 0.4% Zn, 56g/t Ag and 7.3% Pb.
- Northern part of the CDEF Deposit: Intersections included AF005 with 11.7 m of 0.4% Zn, 105g/t Ag and 10.8% Pb, and AF012 with 15.0 m of 0.1% Zn, 81g/t Ag and 5.8% Pb.
On the western side of the deposit, the mineralisation comprised of a flat lying, shallow and moderate – grade mineralisation. However, on the eastern side, there was a major fault zone. The best mineralisation was identified immediately within and the west of the fault zone.
I Deposit: Intersections at I Deposit included AI011 with 12.3 m of 0.23% Zn, 42g/t Ag and 5.5% Pb; and AI010 with 9.4 m of 0.9% Zn, 53g/t Ag and 6.6% Pb.
B Deposit: Intersection at B Deposit included AB033 with 16 m of 0.69% Zn, 20g/t Ag and 4.9% Pb. Pacifico mentioned that the mineralisation might extend further under the Phase II drilling program, along strike to the north and south.
According to Pacifico, the recently received assay results will help the firm to convert Inferred Resources to Indicated Resources, primarily in the F Deposit. The results will also be included in the next MRE that will be completed post receiving the Phase II drilling results.
Phase II Drilling Campaign
The company commenced Phase II infill and extension drilling campaign in May 2019, to combine an updated Mineral Resource Estimate with currently undergoing mining studies and its recent metallurgical testwork results. The company also intends to enhance the economics and confidence of an Optimised PFS, which is due to be completed in Q4 2019.
The Phase II drilling comprised a combination of 45 HQ3 diamond holes and 30 reverse circulation holes (including 10 holes as pre-collars to diamond drilled tails) for a combined total of 5,959m. The aim of the Phase II drill program was to increase Indicated Resources, deliver representative samples for subsequent metallurgical work and offer geotechnical information for pit design.
CDEF Deposit – Pacifico is interested in the logging of substantial coarse galena via drill holes in the northern section of CDEF deposit. It expects that a major part of the current Inferred Resource at this section can be converted to Indicated Resource. The company has not yet received the analyses of 12 drill holes at the northern part of the CDEF deposit that had earlier shown significant intersections.
Zinc mineralisation – This has not yet been considered in Project economics to date. However, there is an Inferred Resource of zinc mineralisation that is already existing at the Alpha Zinc Deposit (2.34 million tonnes of 29g/t Ag, 0.5% Pb and 3.1% Zn).
The technical team of Pacifico observes the great potential for additional zinc resources that will enhance Project economics and add significant value.
On 24th July 2019, the company provided an update on its Phase II drilling program, highlighting the completion of the program at Sorby Hills.
Other Announcements in June Quarter
Pacifico received a Ministerial confirmation in May this year that stated an amendment in the condition 3 of Ministerial Statement 964. The condition was amended to permit for the extension of 5 years in the timeframe for commencement of the Sorby Hills Ag-Pb-Zn proposal.
During the quarter, Mr Aaron King was also appointed as the Project Manager for the company’s 75% owned Sorby Hills Project.
The company also completed a $4 million placement by issuing ~666 million shares at issue price of $0.006 per share.
Activities Subsequent to June Quarter
Phase I Metallurgical Testwork Program Results
Pacifico announced the Phase I Metallurgical Testwork Program Results for the Sorby Hills Project subsequent to the end of June quarter. The results confirmed the Project’s potential to generate high-grade lead concentrate, comprising considerable silver credits.
The company found that the flotation recoveries were greater than the recent assumptions of PFS. The rougher flotation testing with sulphidisation demonstrated up to 91 per cent Pb and 95 per cent Ag recovery on Oxide composite and up to 95 per cent Ag and up to 96 per cent Pb on Fresh composite. However, the cleaner flotation testing affirmed that a final concentrate grade of 65 per cent lead can be produced.
Heavy Liquid Separation (HLS) testwork conducted to upgrade the ores also returned excellent results with lower lead losses than assumed in the recent PFS (10 per cent). The results were:
The preliminary ore sorting testwork too returned an upgrade of 1.3 times and 1.4 times for both Lead and Silver using XRT with lead losses of 2 to 3 per cent. These metallurgical testwork program results will help the company in its Optimised PFS and a DFS (expected in 2020).
New Employee Incentive Plan
A new employee incentive plan was adopted by Pacifico subsequent to quarter end to assist in the motivation, retention and reward of the eligible participants.
Financial Position of Pacifico
The company’s consolidated cash balance at the end of the quarter stood at ~A$2 million, with JV reimbursements of ~A$230,000 likely to be received in the next quarter. The company made the final payment for the 75% acquisition of Sorby Hills Project during the quarter. Around A$898k was spent on exploration & evaluation payments by Pacifico during the June quarter, and a further A$1.03 million is expected to be spent on the same during the next quarter.
PMY closed the trading session higher on ASX at AUD 0.010 on 31 July, with a rise of 11.11 per cent. The stock has generated an enormous return of 125 per cent on a YTD basis.
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