Last quarter was an eventful period for junior explorer Pacifico Minerals Limited (ASX: PMY). Over the quarter, the company made substantial progress in the development of its 75% owned Sorby Hills project - a large near-surface and flat lying lead-silver-zinc deposit in Western Australia.
Updated Mineral Resource Estimate – 20% increase in Global Resource
One of the important highlights of the December Quarter was the completion of Mineral Resource Estimate during the period. Completed by CSA Global Pty, the Mineral Resource Estimate increased the Global Resource by 20% to 36 Mt at 4.7% Pb equivalent and 0.5% Zn; and increased the total Indicated Resources by 53% to 16.6 Mt at 4.8% Pb equivalent and 0.4% Zn through the conversion of Inferred Resources.
Pacifico also noted 165% increase in the B deposit and 63% increase in Indicated Resources in the Omega deposit.
Classification of the MRE was carried out considering the geological understanding of the deposit, quality of the sampling, density data, and drill-hole spacing. The updated MRE has the potential to support an increased mining rate for use in the Optimised Pre-Feasibility Study due to the increase in Indicated Resources.
As per updated MRE, two aspects that are likely to have a significant impact on the planned Optimised PFS are:
- Inferred Resources have a high conversion rate to Indicated status through a tightening of drill hole spacing and extension drilling allows Resources to be increased because of the predictable stratabound nature and geometry of the mineralization;
- Mineralisation is only slightly susceptible to a significant change in cutoff grade. At an increased cutoff grade for lead to 2.5% Pb, the resource retains almost 85% of the metal content despite a drop in tonnage by 35%, demonstrating the exceptional resilience of the Project.
These findings will help the company in targeting and exploration drilling to grow the high-grade zone of mineralisation to potentially improve project economics.
Completion of Phase III drilling Campaign
Over the quarter, the company completed the Phase III drilling campaign at Sorby Hills which was aimed at increasing confidence, and expanding Inferred Resources.
Consisting of 49 reverse circulation drill holes for 3,265 m, the drilling campaign was also focussed on converting existing Inferred Resources to Indicated status and following up on historic intercepts.
Encouragingly, the Field observations have suggested the potential of the drilling campaign to sustain further conversion of Inferred and Indicated to superior categories and to replace Inferred Resources while developing on the prospectivity of the new deposits discovery in the west.
In addition, the pXRF testing and logging of rock chips have delivered a qualitative guide to mineralisation and signaled considerable intersections; while the assay results are expected this month.
Other Significant Developments
During the quarter, Pennington Scott completed the Hydrogeological site investigation program which included the construction of two shallow production wells, eight shallow observation bores through the 30 m deep alluvial deposits around the I deposit, together with one 80 m deep open hole into the Sorby Dolomite.
The program also involved pump testing of two pre-existing holes facing issues earlier which impeded their interpretation and pump testing of the new Sorby hole and one new alluvial bore.
Pacifico is optimistic of considerable improvement in the predictive understanding of local hydrogeology.
In order to support an Optimised PFS, Pacifico also commenced a metallurgical test work program on Sorby Hills core samples in mid-December 2019. The comminution work is currently underway at one set of sample. Another set of samples has been selected for the HLS and Flotation work, and sufficient sample mass has been provided for simultaneous work in these areas, in order to reduce the overall schedule.
On 29 November 2019, the company held its 2019 Annual General Meeting (AGM) wherein it passed All resolutions set out in the Notice of Meeting on a show of hand. After receiving the shareholder approval at the AGM, Pacifico’s Constitution was updated to include amendments made by the ASX to Listing Rules in relation to restricted securities.
During the quarter the company spent $769k on exploration & evaluation activities, which the company is planning to increase to $1.27 million on account of growing focus on Sorby Hills.
At the end of the December quarter, Pacifico had a cash balance of $3.83 million. Subsequent to end of the quarter, the company received $869,430 from JV Partner, Henan Yuguang for its contribution covering Sorby Hills expenditure for the July – December 2019 period.
PMY stock traded at $0.007 with the close of market trading on 28 January 2020.