Rathdowney Resources (CVE:RTH) unveiled Monday new diamond drill results from its Olza zinc and lead project in Southern Poland, which the company said continue to confirm the grade and thickness of mineralization.
Project Olza is a Mississippi Valley Type (NYSE:MVT) zinc-lead project located in the historic Silesian MVT mining district of Poland, 90 kilometres northwest of Krakow.
This area has extensive mining infrastructure including power and rail, as the project is also near a zinc smelter that is expected to have additional smelting capacity when the Pomorzany mine closes in the next three to five years.
The company said zinc-lead deposits are known to occur at Olza as indicated by over 1,500 diamond drill holes completed by the Polish State Geological Institute, as well as a number of historical resource estimates.
In 2008, the Zawiercie I deposit was estimated to have 17 million tonnes in the C1+C2 category by the Polish State Geological Institute, grading 5.8% zinc and 2.32% lead. The Zawiercie II deposit was estimated to have 2.9 million tonnes in the C1+C2 category, grading 6.98% zinc and 2.48% lead.
The company said Zawiercie I and II are potentially one continuous deposit, but historically they were estimated separately as a result of the geologic understanding and drilling density at that time.
The focus of Rathdowney's current work is on these two deposits, where new drilling is designed to confirm the historical results.
"A very encouraging picture is emerging from these results," said president and CEO John Barry.
"Our goal is to deliver a NI 43-101 compliant resource by mid-year."
Indeed, results to date are showing the continuity of mineralization at shallow depths over several kilometres of strike length.
Highlights of the latest results include 2.70 metres of 25.85% lead plus zinc in hole OLZ-044, 21.73% lead plus zinc over 2.70 metres in hole OLZ-051, and 9.38% lead plus zinc over 3.60 metres in hole OLZ-047.
In addition, hole OLZ-059 hit 6.00 metres of 4.25% lead plus zinc.
"We are delighted with the drilling successes to date as we continue to test selected portions of this large mineralized system," Barry continued.
"We have increasing confidence in our ability to define significant resources which are a short rail-haulage distance from a third-party concentrator and smelter. Given its geological potential and excellent location, we believe that Rathdowney's Project Olza presents a compelling investment opportunity amongst a small peer-group of zinc-focused juniors."
Zinc demand continues to grow for industrial applications, while at the same time, key mines are due to shut over the next few years, creating a significant deficit in concentrate supply.
As a result, some of the major producers are already starting to acquire smaller suppliers in order to secure zinc concentrate.
"Rathdowney is well placed to benefit from this impending supply deficit," Barry concluded.
In December, Rathdowney also reported positive drill results from its Olza project, confirming mineralization over 650 metres in one area of the property. Significant results from the program included four metres grading 9.74 percent zinc, 0.19 percent lead, and 49.0 grams per tonne (g/t) silver, in hole OLZ-025.
The company also has zinc properties in the zinc-lead-silver district of the Irish Midlands, where its team continues to combine the data obtained from the 2011 drill program with historical information in order to define new targets for drill testing.
Work has now been prioritized in three project areas of Galway, Laois and Westmeath South.