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Silver Lake Resources Commits A$20m To Copper Exploration At Eelya Complex

Silver Lake Resources (ASX: SLR) will spend A$20 million on an exploration program targeting copper and other base metals within the Eelya Complex, part of the Murchison project.

The company has received all heritage and government approvals required to allow further drilling to begin.

The region hosts a felsic volcanic rock complex that indicates the potential for volcanic massive sulphide mineralisation.

Surface geophysics has located nine large electromagnetic conductors within the Eelya Complex.

Only limited base metals exploration was conducted in the region by previous explorers during the 1970s, including mapping, geochemical sampling and some drilling.

Two surface drilling rigs are being mobilised at the Eelya Complex site. One drill rig will conduct step out drilling at Hollandaire targeting the high grade massive sulphide zones.

These zones contain supergene chalcocite to the west and south of two earlier drill holes that showed high grade mineralisation below the base of oxidation.

The second drill rig will be targeting the large electromagnetic conductors at Colonel and Mt Eelya as a priority.

Hollandaire High Grade Discovery

The Hollandaire copper deposit is a tabular stratabound felsites hosted volcanic massive sulphide deposit.

Mineralisation forms a moderately dipping zone of massive sulphide 10-15 metres thick which plunges to the southwest.

Assays from a nine-hole diamond drilling program completed during the December 2011 quarter confirm Hollandaire as a high grade copper deposit that also contains gold and silver.

Drilling returned grades up to 45% copper, 5.5 grams per tonne (g/t) gold and 256g/t silver. The mineralisation remains open in all directions and at depth.

During the December quarter, Silver Lake Resources also drilled targets EM147 and EM126.

At EM147 lithologies different to Hollandaire were intersected and there was no mineralisation or alteration of note.

At EM126 four holes were drilled and lithologies similar to Hollandaire were intersected with thin zones of weak mineralisation.

Down hole geophysics has since revealed the existence of a conductor in an orientation about 90 degrees from the originally interpreted conductor. This off-hole conductor will be tested later in the year.

Murchison Project

The Murchison operations host a total Resource of 20.6 million tonnes at 2.8g/t for 1.9 million ounces, with 880,000 ounces in the Measured and Indicated categories.

Silver Lake recently increased the Resource at the Tuckabianna underground deposits to 460,000 ounces, a 48% increase from the June 2011 inventory.

In the Murchison, Silver Lake is developing a second mining operation with multiple mines feeding a central processing facility.

A 1.2 million tonne per annum mill has been acquired for this project and production is expected to begin in the March quarter of 2013.