Rathdowney Resources (CVE:RTH) updated investors Thursday on drilling results from its Olza zinc project northwest of Krakow in southern Poland, saying additional holes have been drilled that will be included in the resource estimate.
The zinc and lead explorer stressed that the compilation of results and resource modelling is progressing according to plan.
But a number of the additional holes to be included in the resource report are currently awaiting final quality control approval and are expected to be released shortly. Rathdowney's initial goal was to release its first resource estimate for the project by mid-year, but it will now wait to allow the inclusion of the additional holes.
The Olza project is a Mississippi Valley Type (NYSE:MVT) zinc-lead prospect in Poland's historic Silesian mining district, an area with extensive mining infrastructure including power and rail. The project is also near a state-owned zinc smelter complex that is expected to have additional smelting capacity when the Pomorzany mine closes in the next three to five years.
"Rathdowney's 2012 drill program commenced in January with up to six drills operating and has rapidly advanced our geological understanding of the Silesian MVT zinc-lead system," said the company's president and CEO, John Barry.
"We are pleased to report that our results continue to correlate strongly with previous drilling undertaken in the region, and will facilitate our goal of converting historical resource estimates into a 43-101 compliant resource in the near-term."
In Poland, the company's properties lie in the Upper Silesian Mining District, a region of MVT zinc-lead deposits, which has supported a sequence of long-life zinc mines in the post WW II era and where it has been granted two prospecting concessions and applied for a third, encompassing an area of 150 square kilometres.
Located along strike from the operating Pomorzany-Olkusz mine, Rathdowney's concessions were explored by the Polish State Geological Institute, with a large historical drilling database of more than 1,000 holes.
The historical resource on all the properties is rather large at over 100 million tonnes, with a smaller but higher grade recent historical estimate from 2008 on Zawiercie, part of the Olza project, estimated to have 17 million tonnes in the C1+C2 category, grading 5.8% zinc and 2.32% lead.
Rathdowney said its drill hole pattern is designed to optimize the testing and verification of the historical resource estimates, with "significant mineralization" encountered so far.
Indeed, results have shown the continuity of mineralization within zones along several kilometres of strike length, the company said.
Highlights of recent drilling include 2.30 metres of 19.66% zinc in hole OLZ-078, and 17.72% zinc over 3.25 metres in hole OLZ-102. In addition, hole OLZ-096 returned 5.05% zinc over 14.7 metres.
The company has completed more than 200 drill holes as part of a multi-million dollar resource delineation program at Olza, with drilling continuing to build confidence in the reported grade and continuity of the historic mineralization.
The Upper Silesian district has an estimated endowment of some 40 million tonnes of zinc and lead, Rathdowney noted.
The junior explorer stands to benefit from the recent buzz on zinc. Demand for the metal continues to grow globally while major zinc producers are set to be taken offline over the medium term, resulting in looming deficits in concentrate supply from the world's mines.
Because of this, some of the world's largest zinc producers are already starting to acquire smaller suppliers in order to secure zinc concentrate.
Rathdowney also holds concessions in Ireland, where its technical team continues to integrate the geological data from the company's 2011 drill program with historical information as a way to define further targets for drill testing.
Initial exploration was heavily weighted toward soil geochemistry and drill testing with single drill-holes of isolated metal anomalies, but the focus has now moved toward the structural setting and the localizing of economic zinc deposits.
"Exploration and discovery is a critical element of Rathdowney's value creation strategy," said Barry.
"Our geological team has conducted a detailed geological compilation and structural analysis using regional datasets in three priority areas of our land holdings in Ireland. We are now convinced that cluster drilling is key to effectively testing permissive structural settings to maximize the chances of discovery."