Tinka Resources Ltd (CVE:TK) (OTCPK:TKRFF) revealed it had found more high-grade zinc at its flagship Ayawilca property in central Peru, which could further enhance the project's economics.
Assays today come from two drill holes, aimed at expanding the high-grade 'Zinc Zone', which was the subject of the positive preliminary economic assessment (PEA), published in July this year.
One hole hit two intervals of high-grade zinc close to the margin of the current inferred resource, including one of the highest grade intervals ever drilled at South Ayawilca - at 5.7 metres at a grade of 32.6% of the base metal.
In addition, a new style of silver-rich mineralization with disseminated zinc and lead was found deeper in the same hole.
"The ongoing drill program at South Ayawilca is focused on the expansion and upgrading of high-grade resources in the Zinc Zone," said Dr. Graham Carman, Tinka's president and CEO.
"We are excited that new drill holes like A19-163 continue to intersect exceptional zinc grades. The recently completed PEA shows that the project economics is sensitive to zinc grade, so expansions or upgrading of these higher grade zinc resources will have a positive impact on the project economics in future studies."
Carman also noted that the discovery of the Lower Silver Zone in the second hole proved that mineralization existed within a deeper limestone at South Ayawilca, 100 to 150 metres beneath the existing resource, open to the west and at depth.
"Further drilling is planned for the Lower Silver Zone, including the deepening of a 2017 drill hole (A19-167) which is currently in progress. Holes A19-165 and 166 were recently completed and assays are pending," he added.
One rig at South Ayawilca area
Drilling is ongoing at the project with one rig at the South Ayawilca area and the recent finds have "significantly advanced" the geological understanding of the high-grade zinc mineralization at the western end of the area, said Tinka.
The July PEA was based on an underground ramp-access mine development with a 5,000 tonnes per day (tpd) processing plant.
Initial capital expenditure was pegged at US$262 million with a pre-tax IRR (internal run rate) of 37.2%. The mine life is 21 years with average head grades of 6.05% zinc, 18.3 g/t (grams per ton) silver, 67.1 g/t indium, and 0.25% lead.
The pre-tax NPV (net present value) for the project is US$609 million using metal prices of US$1.20 per pound zinc, US$18 per ounce silver, and US$0.95 per pound lead on a 100% equity basis.
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