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, excellent recoveries and high-quality concentrate, established infrastructure allowing for fast track production, and potential high operating margins from high-grade shallow deposits. The Project is located 50km northeast of Kununurra in Western Australia. 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.

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.
  • 9m % Pb equivalent (7.6% Pb, 32g/t Ag and 1.1% Zn) from 37m at the B Deposit in drill hole AB033.

Fresh drill core has again demonstrated the simple mineralisation which consists of coase silver bearing galena (lead sulphide). 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). There is a clear timing control to mineralisation related to faulting and slump brecciation at the beginning of Knox Sediments deposition. As the mineralisation shows many characteristics of SEDEX or diagenetically formed deposits, the downdip potential, particularly for zinc mineralisation remains high.

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. Angled drilling and orientated core from the Phase 1 drilling program revealed a clear control on mineralisation that is hosted between upper Knox Sediments and a lower Sorby Dolomite. 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).

Optimised Pre-Feasibility Study

Infrastructure in the East Kimberley has improved significantly over recent years, with a sealed road now in place to the Project, hydro-power from the Argyle Dam available to within 30km of the Project and the Wyndham Port capable of shipping mineral concentrate to the seaborne market. Native title over the Project mining leases has been extinguished and a State Agreement legislates for the development of the Sorby Hills Joint Venture Project alongside the development of Ord Stage II.

Sorby Hills has undergone a Public Environmental Review and received approval for development. Lead prices have also increased significantly. The Joint Venture believes that macro-economic factors, technical studies completed in the region and the higher lead price help to enhance the future economic development of the Project.

Results from the Phase 1 drilling program (December 2018) and the Phase 2 drilling campaign planned for April 2019 will be integrated with the existing JORC 2012 compliant MRE. Detailed technical studies will assess the ability for improvements in infrastructure and modern mineral processing technology to reduce capital and operating costs. Pacifico has begun to rapidly integrate the MRE into a development plan to mine, process and produce a high-grade mineral concentrate. This work will form part of the optimised PFS expected to be completed by mid-2019.