The Sorby Hills Joint Venture Project is a near-term lead-silver-zinc development asset with JORC 2012 Resources, EPA approval and mining titles in place, established infrastructure,excellent recoveries and high-quality concentrate, and potential high operating margins from shallow deposits and high silver credits.
The Project is located 50km northeast of Kununurra in Western Australia and consists of five mining leases totaling 4,157ha.
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.
MVT-style deposits formed in lower Carboniferous (Tournaisian) carbonates within the Burt Range Formation on the eastern flank of the Pincombe Range. 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). It is evident that there is a clear timing control to mineralisation related to faulting and slump brecciation at the beginning of Knox Sediments deposition. There is a mostly lead dominant system with high silver tenor within the galena (lead sulphide). Mineralisation shows many characteristics of SEDEX or diagenetically formed deposits so the downdip potential, particularly for zinc mineralisation, remains high.
Phase 1 Drilling Program
The Phase 1 drill program was designed to provide angled and oriented diamond drill core into B, C, CD link, D, F, and I Deposits. A total of 72 holes were drilled in Q4 2018 with a total of 5,372m drilled. These holes were drilled at a 70 degree angle from east to west designed to test any intercepting geological structures.
Significant drill intercepts from each deposit drilled include:
- 11.7m at 13.2% Pb equivalent (10.8% Pb, 105g/t Ag) and 0.9% Zn from 75.7m at the F Deposit in drill hole AF005;
- 10m at 7.8% Pb equivalent (6.6% Pb, 53g/t Ag) and 0.9% Zn from 82m at the I Deposit in drill hole AI010;
- 9.7m at 9.1% Pb equivalent (7.5% Pb, 68g/t Ag) and 1.1% Zn from 76m at the CD Link in drill hole ACD019;
- 20m at 8.6% Pb equivalent (7.3% Pb, 56g/t Ag) and 0.4% Zn from 11m at the DE Deposit in drill hole ACD046; and
- 9m % Pb equivalent (7.6% Pb, 32g/t Ag) and 1.1% Zn from 37m at the B Deposit in drill hole AB033.
Excellent results were received from an initial 34 of the 52 holes sent for analysis. The drilling campaign provided a greater geological understanding and confirms significant potential for the discovery of additional resources with future drilling campaigns. The results provide Pacifico with confidence in converting Inferred Resources to Indicated.
For further information, refer to ASX announcement Strong Drilling Results at Sorby Hills (14 February 2019).
Updated Mineral Resource Estimate
An updated Mineral Resource Estimate (MRE) was completed in early 2019, resulting in an (82% increased) Global Resource of 29.97Mt of 4.7% Pb equivalent (3.7% Pb, 43g/t Ag and 0.6% Zn, using a 1.0% Pb cut off). There is now (123% increase) 10.85Mt of Indicated Resources 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) within the Global Resource.
The updated MRE was based on analyses received from 34 holes from the Phase 1 drilling program, initial findings from a new mining study completed by an independent specialist supporting a change in the cut off grade used in the previous MRE, and an improved appreciation of the geological stratigraphy and structure.
A simplified appreciation of the geological stratigraphy and structure allows for a better delineation of the geometry of the deposits, and greater confidence in resources. The deposit consists of both diagenetic replacement mineralisation in the overlying slump breccias and shales, and epigenetic mineralisation in the more brittle Sorby Dolomite immediately underlying the slump breccias. The mineralisation is associated with low-angle syn-sedimentary faults.
The results of the Phase 1 drilling program provides Pacifico with high confidence in converting Inferred Resources to Indicated, and for the discovery of additional resources with future drilling programs using angled diamond holes.
For further information, refer to ASX announcement Mineral Resource Estimate Upgrade at Sorby Hills (7 March 2019).
Updated Pre-Feasibility Study
Pacifico undertook the updated PFS following completion of the 2018 Phase 1 drilling campaign and several technical study reviews. The results of the updated PFS confirm the technical and economical robustness of developing an integrated mining and processing operation to produce a high value, high grade lead-silver concentrate.
Working with an update of the most recent Mineral Resource Estimate, the PFS envisages a 1.0Mtpa throughput rate over an initial 8 year mine life. The proposed mine plan targets high grade lead-silver mineralisation, all within Indicated Resources. The PFS combines ore drawn from three open pits with a processing plant employing conventional milling and flotation with a Dense Media Separation beneficiation plant between the coarse crush (dry end) and the grind and flotation circuit (wet end).
The PFS indicates 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 are US$0.06/lb including silver credits. Using a lead price of US$0.92/lb and silver price of US$15.40/oz, together 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%.
For further information, refer to ASX announcement Updated Pre-Feasibility Study Confirms Strong Economics of Sorby Hills Base Metal Deposit (26 March 2019).
Analysis results from the remaining 18 drill holes from the Phase 1 Drilling Program are expected to be received in April 2019.
Infill and expansion drilling is planned for April / May 2019, targeting further resource upgrade to support an Optimised PFS in Q3 2019.