Australian exploration company, Pacifico Minerals Limited (ASX: PMY) is currently involved in the development of its 75% owned Sorby Hills Lead-Silver-Zinc Mine Development Project with Henan Yuguang (China’s largest Lead smelting and silver producer) possessing 25 per cent contributing interest.
Sorby Hills, which is located in the East Kimberley region in Western Australia, was discovered in 1971, and till now various companies have conducted extensive work on the Project. In the late 1970s and through the 1980s, major mining companies considered the development of Sorby Hills; however, the progress was hindered by a lack of infrastructure and a difficult regulatory regime.
In the past few years, the infrastructure near the Project has improved significantly with sealed road now in place for the concentrate transportation between site and Wyndham airport, availability of the hydro-power from the Argyle Dam within 30km of the Project, and the proximity to the Wyndham Port capable of shipping mineral concentrate to the seaborne market.
Phase 1 Drilling Program
The company has already completed a Phase I drill program at the Project in February 2019 which had significantly expanded the size of global Mineral Resource Estimate (MRE) to 29.98Mt of 4.7% Pb equivalent including 10.85Mt of 5.0%Pb equivalent in Indicated Resources.
The Phase 1 infill drill campaign comprised of a combination of both reverse circulation (RC) to end of hole and RC pre-collar with diamond drilled tails to the end of hole. The drilling was designed to provide angled and oriented diamond drill core into B, C, CD link, D, F and I Deposits; and it was the first drilling campaign since an RC drilling program in 2011 and the first diamond drilling campaign since 2010.
Drill Results of Phase 1 infill drill campaign include:
DE Deposit – Extensions to the known resources at DE Deposit include ACD046 with 20.0m of 7.3% Pb, 56g/t Ag and 0.4% Zn demonstrates the thick ore grade mineralisation within the Sorby Dolomite and immediately below the contact with the upper Knox Sediments;
I Deposit– I Deposit drill hole AI010 intersected 9.4m of 6.6%Pb, 53g/t Ag and 0.9%Zn;
F Deposits – Drill hole AF012 intersected 15.0m of 5.8% Pb, 81g/t Ag and 0.1% Zn (50m to the north and not shown in cross section) and AF005 intersected 11.7m of 10.8% Pb, 105g/t Ag and 0.4% Zn;
D Deposit & C Deposit– CD Link- ACD019 on the eastern edge of the cross section intersected 9.7m of 7.5% Pb, 68g/t Ag and 1.1% Zn;
B Deposit– The B Deposit was interpreted as forming two lenses, B1 and B2, separated by a low angle fault.
The results from the Phase I drilling campaign and assays confirmed continuity between C, DE and F Deposits, which is now considered as a single deposit (CDEF) with a strike length of 1.7km that may be minable with a single open cut.
In July 2019, the company released highly positive results of its Phase I metallurgical testwork program which confirmed the potential for the Project to produce high quality Lead concentrate containing appreciable silver credits.
The company has also completed a Pre-Feasibility study (PFS) at the Sorby Hills project. The PFS estimated a CAPEX of A$95.4 million to develop the mine, with a pre-tax NPV8 of A$243 million, IRR of 62% and an average cashflow of A$60 million.
Phase II infill and extension drilling Program
The company carried out the Phase II infill and extension drilling program from May to July 2019 with the intention of increasing Indicated Resources ahead of an update to the MRE planned for September/October 2019. The program was focused on shallow mineralisation above 100m depth, that may be mineable by open pit, at B and CDEF deposits.
The Phase II drill program has also provided geotechnical information for pit designs and will deliver representative samples for further metallurgical work. The drilling program consisted of 75 drill holes for 5,959m. Out of 75, 29 holes have returned impressive intersections from shallow depth.
Significant drill intercepts from Phase II drilling include:
- CDEF Deposit drill hole ACD071 – 23.0m at 11.3% Pb (lead) equivalent (9.0%Pb, 88g/t Ag) and 1.2% Zn from 59m.
- CDEF Deposit drill hole ACD080 -14.0m at 15.3% Pb equivalent (13.0%Pb, 89g/t Ag) and 1.0% Zn from 24m.
- CDEF Deposit drill hole ACD056 -21.0m at 5.6% Pb equivalent (5.0%Pb, 21g/t Ag) and 0.5% Zn from 23m.
- B Deposit drill hole AB050 – 11.0m at 7.6% Pb equivalent (6.9%Pb, 26g/t Ag) and 0.1% Zn from 29m.
The remaining Phase II infill and expansion drilling program results are expected to be released by the end of August 2019 and the revised MRE is expected to be completed in September 2019.
The company believes that Sorby Hills MRE has excellent potential to grow as extensions and targets outside of the main defined deposits are drilled. It also believes that the Deposits A, H, I, Alpha and Beta deposits have good potential to be upgraded and expanded with further drilling.
The company’s technical team considers great potential for the delineation of further zinc resources to add significant value and enhance Project economics. Pacifico is planning to conduct further drilling next year to increase confidence in the Resource at B and CDEF deposits.
Pacifico Minerals is currently compiling the current and historical drill hole information so that it can provide a sound geological and mineralisation model on which the revised MRE (Mineral Resource Estimate) can be based on.
Stock Performance: In the last six months, PMY’s stock has witnessed an increase of 100% as on 27 August 2019. On Year-to-date basis, the stock has gained 125%. At market close on 28 August 2019, PMY’s stock was trading at a price of $0.009 with a market capitalisation of circa $20.82 million.
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