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Sorby Hills Joint Venture Project

Pacifico owns 75% of the Sorby Hills Joint Venture Project. Sorby Hills is located 50km from the regional centre of Kununurra. There are existing sealed roads to transport concentrate from site to the facilities at Wyndham Port, a distance of 150km, and established infrastructure allows for fast track production. Our joint venture partner, with a 25% contribution is Henan Yuguang Gold Lead Co. Ltd. Henan Yuguang is China's largest lead smelting enterprise and the largest silver producer in China.

Most of the mineralisation occurs as a sediment replacement deposit predominantly along the flat-lying contact between an upper siltstone (Knox Sediments) and a lower dolomite (Sorby Dolomite), confirmed by geological logging and interpreted rock geochemistry using a portable XRF. 

Environmental Approvals

Phase I Drilling Campaign
Completed in 2018, the Phase I drilling campaign included a combination of reverse circulation (‘RC’) to end of hole and RC pre-collar with diamond drilled tails to end of hole and was designed to provide angled and oriented diamond drill core into the B, C, CD link, D, F and I deposits.

Drill core demonstrated simple mineralisation consisting mostly of coarse silver bearing galena (lead sulphide). The campaign clearly delineated between ore and waste and highlighted the coarse-grained nature of the galena (favourable for pre-concentration prior to grinding and flotation). Drill core from the campaign is being utilised to assess various density separation techniques to separate ore from waste rock to form a pre-concentrated product prior to further concentration via a lead flotation circuit.

Final assay results for Phase I were received in the June quarter. Drilling results confirmed that C, DE, and F deposits are linked and can be referred to as a single deposit (CDEF) with a strike length of 1.7km and which may be minable with a single open cut.

CDEF Deposit
Drilling at this deposit provided an understanding of the geological controls and continuity, enabling a significant portion of the Inferred Resources to be converted to Indicated Resources.  Intersections at the centre of this deposit include ACD046 with 20.0m of 7.3% Pb, 56g/t Ag and 0.4% Zn

The western side of this deposit has shallow, flat-lying, moderate-grade mineralisation on the western side of the deposit. To the east there is a fault zone with an overall drop of 60 to 100m. The greatest mineralisation lies immediately to the west of, and within, this fault zone. Mineralisation continues east at depth as a flat to gently dipping horizon. In the northern part of the deposit, drill hole AF012 intersected 15.0m of 5.8% Pb, 81g/t Ag and 0.1% Zn and AF005 intersected 11.7m of 10.8% Pb, 105g/t Ag and 0.4% Zn.

I Deposit
Results showed that the I deposit forms a relatively flat-lying horizon of mineralisation. Drill hole AI010 intersected 9.4m of 6.6% Pb, 53g/t Ag and 0.9% Zn and AI011 intersected 12.3m of 5.5% Pb, 0.23% Zn and 42g/t Ag.

B Deposit
The B deposit is interpreted as two lenses separated by a low angle fault. Intersections include AB033 with 16m of 4.9% Pb, 0.69% Zn and 20g/t Ag.

Updated Mineral Resource Estimate
The Company completed an updated Mineral Resource Estimate (‘MRE’) during the March quarter based on analyses received from an initial 34 holes from the Phase I drilling program, initial results from an independent mining study supporting a change in cut-off grade, and a greater understanding of the geological stratigraphy and structure.

Results saw an 82% increase in the tonnage of the Global Resource, now 29.97Mt of 4.7% Pb equivalent ((3.7% Pb, 43g/t Ag) and 0.6% Zn using a 1.0% Pb cut off). Within the Global Resource there was a 123% increase in the tonnage of Indicated Resources, now 10.85Mt with a grade of 5.0% Pb equivalent ((3.9% Pb, 46g/t Ag) and 0.4% Zn using a 1.0% Pb cut off).  

Table 1. JORC MRE at 1.0% Pb Cut Off Grade (Except Alpha Zn Deposit, Zn > 1.0%)

JORC Classification

Tonnes (kt)


Zn %

Ag g/t

















Updated Pre-Feasibility Study
In March 2019, Pacifico released the results of an updated Pre-Feasibility Study (‘PFS’). Working with an update of the most recent MRE, the PFS envisaged a 1Mtpa throughput rate over an initial 8-year mine life. The proposed mine plan targets high grade lead-silver mineralisation within the Indicated Resources category. The PFS combines ore drawn from three open pits with a processing plant employing conventional milling and flotation with a beneficiation plant between the coarse crush (dry end) and the grind and flotation circuit (wet end).

The PFS indicated steady state annual production of concentrate containing approximately 31.125ktpa of lead and 1.17Mozpa of silver. Pre-production capital expenditure is estimated to be A$95.4M (including A$10.5M contingency) and lead C1 direct cash costs of production of US$0.06/lb (inclusive of silver by-product credits). Using a lead price of US$0.92/lb and silver price of US$15.40/oz with an exchange rate of A$1= US$0.70 results in an estimated NPV of A$243M (at an 8% discount rate) and an IRR of 62%.

Key outcomes of the PFS are presented in Tables 2 and 3 below.

Table 2. Production Metrics

Mining Rate

1 Mtpa

Initial Mine Life

8 Years

LOM Lead Metal Production

249 Kt

LOM Silver Metal Production

9.35 Moz

Lead C1 Direct Cash Costs (including Silver Credits)

US$ 0.16/lb

A$ 0.24/lb

Table 3.Capital Investments and Project Economics

Pre-Production Capital


Steady-State Average Cashflows


Project Payback from Commercial Production

16 Months

Pre-Tax NPV (8% Discount Rate)


Pre-Tax IRR



Phase II Drilling Campaign 
The Phase II infill and extension drilling campaign commenced in May 2019 with an intention to combine the updated MRE with recent metallurgical testwork results and progressing mining studies to enhance Project economics and improve confidence in an Optimised PFS scheduled for completion in January 2020. 

The program focused on shallow mineralisation at the B and CDEF deposits above 100m depth, that may be mineable by open pit. It was designed with assistance from mining and geotechnical consultants Entech Mining with an aim to convert Inferred Resources to Indicated Resources, provide geotechnical information for pit designs (pit wall stability), and deliver representative samples for further metallurgical work.

Drilling consisted of thirty RC holes, including ten as pre-collars to diamond drilled tails, and forty-five HQ3 diamond holes for a total of 5,959m (including 427m mud rotary). Most holes were inclined at 60° and drilled towards the west (azimuth 270°).

Most of the core, and all the RC samples were logged during the report period and visual assessment of lead mineralisation indicates that significant intersections were obtained. As well as expected galena (lead sulphide) in mineralised intersections, significant amounts of sphalerite (zinc sulphide) were observed in the drill core.

Abundant coarse galena was logged through many of the Phase II drill holes in the northern section of CDEF deposit.

Analysis results for twelve drill holes with significant intersections at the northern part of this deposit were outstanding at the completion of the Updated MRE in the March quarter. Through combining these with Phase II infill results, it is expected that the Company will be able to convert a significant portion of the current Inferred Resource to Indicated Resource.

 Phase I Metallurgical Testwork 
During the period, Pacifico released results from the Phase I metallurgical testwork program conducted by ALS Metallurgical Services (under management by Simulus) to assess beneficiation options and support previous flotation performance.

Results confirmed the potential for the Project to produce high quality lead concentrate containing appreciable silver credits. Flotation recoveries were higher than the assumptions used in the recent PFS. Cleaner flotation testing confirmed that a final concentrate grade of 65% Pb can be produced. Meanwhile, rougher flotation testing with sulphidisation indicated up to 96% Pb and 95% Ag recovery on Fresh composite and up to 91% Pb and 95% Ag recovery on Oxide composite. Favourable results were received from further heavy liquid separation testwork to upgrade the ores with lead losses lower than the 10% assumed in the recent PFS.

A lead upgrade resulted for both fresh ore (1.85x with lead losses of 3.3% at Specific Gravity (‘SG’) 2.75 and 3.36x with lead losses of 6.6% at SG 2.93) and oxide ore (1.22x with lead losses of 4.1% at SG 2.75 and 2.15x with lead losses of 9.1% at SG 2.93).

Preliminary ore sorting testwork returned 1.3x and 1.4x upgrades for lead and silver respectively using XRT with lead losses of 2-3%.

Ongoing testwork will support both the Optimised PFS and the Definitive Feasibility Study planned to commence in 2020 using samples from the Phase II drilling program.

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