The junior zinc and lead explorer's Project Olza hosts Mississippi Valley Type (NYSE:MVT) zinc-lead deposits in Poland's historic Silesian mining district, where zinc-lead mining has taken place since the 12th century, and therefore holds extensive infrastructure.
Olza is also located within 20 km from the ZGH Boleslaw smelter complex, which hosts a concentrator and tailings facilities with additional capacity from which Rathdowney could potentially benefit.
The Pomorzany Mine in the district - the only major feed-source for Boleslaw - is scheduled to shut down in 2014, meaning that the refinery will need feed. The junior explorer could also benefit from the workforce that will be available when Pomorzany comes offline.
Currently, Olza boasts an inferred resource of 21.2 million tonnes grading 5.88% and 1.54% lead, for a total of 2.75 billion pounds of zinc and 720 million pounds of lead.
"The resource base provided by the September 2012 estimate establishes a critical mass and we are now moving forward with data collecting and studies to support a permitting process as outlined for mining projects in Poland," said president and CEO, John Barry, in the statement Thursday.
"Community engagement activities that were initiated in 2010 have now broadened and we are deepening our discussions with local stakeholders."
The company added that it has also formalized a process to consider all financing and partnership options available as it moves forward to develop the deposit.
Notable recent intercepts at the project include 5.65 metres at 8.97% lead plus zinc, as well as 3.85 metres at 11.69% lead plus zinc and 2.63 metres of 26.08% lead plus zinc.
"Our Olza drilling has consistently returned very promising silver concentrations along with solid zinc-lead grades," continued Barry.
"The potential for silver to enhance project economics is highlighted by the results from initial metallurgical testing that we announced earlier this week, showing excellent zinc and lead recoveries with a high silver grade reporting to the zinc concentrate."
Indeed, in yet another example of Rathdowney's ongoing work that is adding value to the project, the company earlier this week revealed what it called excellent metallurgy results.
The company said it saw zinc recoveries of greater than 90%, for a zinc concentrate assaying 55% to 60% zinc and containing 170 grams per tonne (g/t) silver, using standard zinc and lead flotation conditions without any upgrading ahead of flotation.
Lead recoveries of 90% were also tested, for a lead concentrate assaying 65% to 70% lead, containing 50 g/t silver. Around 85% of the silver was recovered in the zinc concentrate, while roughly 5% was recovered in the lead concentrate.
As key established mine operations are set to be taken offline over the medium term and zinc demand continues to grow, zinc concentrate supply deficits are looming.
"The Upper Silesian district has, by far, the most important accumulation of metal in any of the world's Mississippi Valley Type districts, with an estimated endowment of some 40 million tonnes of zinc and lead and results from Project Olza show that it is an important part of this world class district," the company said in its release.
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