Best Drill Interceptions In The Metals Mining Sector For The Week Ended March 10, 2019

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Includes: AZZVF, BWMXF
by: Gold Panda
Summary

Peel Mining intersects over 40% zinc at Wagga Tank.

AVZ Minerals delivers more impressive drill results at the Manono lithium project.

Osisko Metals has significant near-surface intersections at the Pine Point zinc-lead project.

(Source: Exploration Insights)

Introduction

If you're into investing in the mining sector, you should know the above chart very well. This series covers the three projects with the most significant drill interceptions over the past week, as well as the prospects of the companies which own these projects. I will use data from the weekly bulletin of RSC Mining and Mineral Exploration, which can be found on its website. Note that the drill interceptions are converted into grades of gold equivalence using the following formula:

(Source: RSC Mining and Mineral Exploration)

RSC Mining and Mineral Exploration has chosen gold as the metal equivalent for all conversions, as it considers it the most widely used and best-understood benchmark to determine or appreciate the grade tenor of a drilling intercept.

(Source: RSC Mining and Mineral Exploration)

1) Wagga Tank polymetalic deposit in Australia

On 5th March, Peel Mining announced that hole WTRCDD180 at the Southern Nights discovery at its Wagga Tank Zn-Pb-Ag-Au-Cu deposit returned 16.95m @ 43.25% Zn, 14.66% Pb, 1% Cu, 356g/t Ag and 3.11g/t Au from 179.15m. This is equal to 773(AuEq.)m:

(Source: Peel Mining)

This hole was drilled as a twin of drill hole WTRCDD150 to provide material for further metallurgical testwork and for Mineral Resource Estimate QA/QC purposes. Hole WTRCDD150 intersected 18.2m @ 40.3% Zn, 15.21% Pb, 0.97% Cu, 356 g/t Ag and 2.77 g/t Au from 182m.

Wagga Tank is located on the western edge of the Cobar Superbasin:

(Source: Peel Mining)

Economic mineralization was discovered in the mid-1970s, but there was no drilling after 1989. Peel bought the project in 2016 and drilled 42 holes that year, with 24 returning significant intercepts. In 2016 and 2017, drilling confirmed historical data and mineralization was defined over around 300m of strike.

In 2017, Peel made the Zn-Pb-Ag-Au-Cu Southern Nights discovery around 1km south of Wagga Tank:

(Source: Peel Mining)

Several holes at Southern Nights have returned over 40% zinc, which is amazing.

Peel expects to release a maiden JORC resource by June 2019.

2) Manono lithium project in the DRC

On 5th March, AVZ Minerals (OTC:AZZVF) announced the final two of six reconnaissance drill holes at the Carriere de l’Este prospect at its Manono project, and the better one was CD18DD006. It returned 68.0m @ 2% Li2O and 858ppm Sn from 175m, which is equal to 631(AuEq.)m:

(Source: AVZ Minerals)

This drill result is not as strong as the other ones that helped AVZ secure a place in this series several times, but it was enough for second place in this week's edition. The last time the company was featured in this series was in the February 24 edition here.

Manono is located in DRC and is becoming the world's best lithium-rich lithium, cesium, tantalum (LCT) pegmatite deposit:

(Source: AVZ Minerals)

On October 9, AVZ announced the results of a scoping study which outlined a project with the capacity to produce an average of 440ktpa of 5.8% Li2O spodumene concentrate over an initial 20-year mine life. I think the economics of the project are great, and one of the metrics that really impressed me was the low stripping ratio, which stands at 0.7:1.

(Source: AVZ Minerals)

(Source: AVZ Minerals)

The initial capex for Manono is seen at $150-160 million, and AVZ plans to complete scoping studies for 5Mtpa and 10Mtpa operations, as well as a full feasibility study in the second quarter of 2019.

On 27th February, AVZ Minerals announced that it’s now funded to final investment decision.

3) Pine Point zinc-lead project in Canada

On 4th March, Osisko Metals (OTC:BWMXF) announced that hole W85-18-PP-001 at its Pine Point project intersected 60.37m @ 3.24 Zn and 8.32% Pb from 15.2m. This is equal to 383(AuEq.)m.

The company announced assay results from a total of 14 drill holes completed in the W-85 area within the North Zone, and several of them returned significant results:

(Source: Osisko Metals)

Pine Point is located on the south shore of Great Slave Lake in the Northwest Territories:

(Source: Osisko Metals)

Osisko Metals bought the project in February 2018, and in December it released an inferred mineral resource estimate of 38.4 Mt grading 4.58% zinc and 1.85% lead (6.58% ZnEq), which means that it contains around 3.9 billion pounds of zinc and 1.6 billion pounds of lead.

Around 64 million tonnes grading 7.0% zinc and 3.1% lead (1,3) were mined between 1964 and 1987 at Pine Point, and the infrastructure around the projects looks great. There are paved roads, hydroelectric power available on site, as well as rail access within 60 km.

Historically, Pine Point produced premium high-quality lead and zinc concentrates with recoveries of over 90%. The metallurgy is great and the impurity levels are very low:

(Source: Osisko Metals)

A PEA for Pine Point is planned for the second half of 2019.

Conclusion

I think that Wagga Tank could be one of the most important zinc-polymetallic discoveries in Australia over the past several years, and I can’t wait to see the resource estimate. It’s a large-scale system with high-grade zones. Several holes have returned over 40% zinc, and I think that the high-grade zones could be a game-changer. I think that Wagga Tank has a serious potential and Peel is undervalued. Unfortunately, the company’s shares are not listed in the US, so if you want some exposure, you’ll have to go to the ASX.

I still think that Manono is the best undeveloped lithium project in the world, and every few weeks AVZ Minerals releases more impressive drill results that prove this assertion. The initial capex for the project is expected to come in at $150-160 million, which I think isn’t much. I like Manono’s size, grade, strip ratio, abundance of tin, as well as the low volume of ferric oxide, which can be a potentially deleterious element. My main concern is that the project is in the DRC, which is notorious for its instability.

Osisko Metals is drilling on a past producing project with great infrastructure, and I think it could become a large-tonnage, high-grade open pit mine. The mineralization is near surface and the metallurgy is great, with very low impurity levels. I expect the PEA for Pine Point to include very good numbers, and I think that Osisko Metals is undervalued at the moment.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I am not a financial adviser. All articles are my opinion - they are not suggestions to buy or sell any securities. Perform your own due diligence and consult a financial professional before trading.