Silver Lake Resources (ASX: SLR) is set to begin a Pre-Feasibility Study (NYSE:PFS) at its Hollandaire deposit, a high grade copper discovery within the Eelya Complex, part of the Murchison Gold Project.
The current Inferred resource of 2.8 million tonnes at 1.6% copper, 0.4g/t gold and 5g/t silver, including a supergene zone averaging 4.7%, supports the move to begin the PFS.
The company has received further assays from its current $20 million drilling campaign, which has now intersected mineralisation along a 10 kilometre trend, with the mineralisation still open to the southwest and at depth.
Highlight intercepts include 5.4 metres at 4.5% copper, 0.6 grams per tonne (g/t) gold and 27g/t silver from 102 metres; 6.7 metres at 3.1% copper, 0.3g/t gold and 16g/t silver from 93 metres; and 13.7 metres at 2.% copper, 0.2g/t gold at 6g/t silver from 254 metres - the deepest drill hole to date.
Les Davis, managing director, commented: "We are confident that the current resource at Hollandaire is the catalyst to commence the Pre-Feasibility study which is further complemented by the ongoing drilling campaign which has intersected mineralisation along a 10 kilometre trend.
"The Eelya complex has the potential to further enhance the economics of our Murchison gold project with expanded gold production, copper and other base metal credits which can be processed at a marginal capital and operating cost at the nearby gold mill.
"We have drilled less than 100 holes in a 50 square kilometre area that is already showing to be well endowed with base metals."
The Hollandaire deposit was discovered in September 2011 and has copper grades of up to 45%, gold grades of up to 5.5g/t and silver grades up to 256g/t.
The next steps at Hollandaire will include:
- Downhole geophysics, targeting and further drilling;
- Metallurgical test work results;
- Update resource model and resource inventory; and
- Pre-Feasibility Study, including mineable inventory - open pit and underground; capital estimates for adding on grinding, flotation and filtering circuit to the Murchison gold mill to produce a copper, gold and silver concentrate; and initial discussions regarding concentrate sales.
Results from the Pre-Feasibility Study are expected to be announced in the June 2013 quarter.
Eelya Complex strategy
Silver Lake's plan for the Eelya Complex is to add a copper circuit to the Murchison gold mill for modest capital expenditure.
The company then plans to bring the deposits within the complex into production in 2015/2016.
Hollandaire, Rapier, Mt Eelya and Colonel are the four priority targets within the complex, with nine large electromagnetic conductors identified over a 50 square kilometre area.
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