Herencia Resources (LON:HER) this morning said its latest drilling programme had uncovered a high grade extension to the Cathedral vein at its Paguanta zinc-silver-lead project in northern Chile.
At the same time it has also confirmed the existence of a new vein at the Paguanta project.
"It is also pleasing to see high silver and lead grades, over and above the excellent zinc grades, and noting the continued intersection of gold in most holes," said managing director Mike Bohm.
What the group has unearthed in its latest study will give investors and analysts cause for optimism. The stock was trading up 3.5 percent in midmorning deals.
The high grade mineralisation encompassed by holes PTDD037, PTDD048 and PTDD058 at Paguanta now covers in excess of 100 metres in strike length and remains open in most directions.
Hole PTDD056 was targeted to intersect cathedral vein between holes PTDD041 and PTDD043 and successfully returned a broad mineralisation intersection, which also including a high grade core. There was 15 metres at 3.4 per cent zinc, 1.6 per cent lead and 77 grams per tonne of sliver. This included 3 metres at 10 per cent zinc, 3.5 per cent lead and 180 grams per tonne of silver.
Elsewhere holes PTDD053 to PTDD055 were drilled to test the 'up-dip' of the recently discovered new vein. No significant intersections were returned from PTDD053 or PTDD055. However PTDD054 returned a high grade intersection of with 50 centimetres containing 10.8 per cent zinc, 3.7 per cent lead and 260 grams per tonne silver.
"Whilst narrow, it is positive that very high grades have been returned from this vein which may increase in width to the east," the company said.
Holes PTDD051 and PTDD052 were drilled to test the cathedral vein following the earlier high grade intersection in. Both successfully intersected mineralisation with PTDD052 extending cathedral vein down-dip approximately 30 metres, returning a broad intersection of minerals. Around 12.7 metres contained 2.4 per cent zinc, 2 per cent lead and 100 grams per tonne of silver.
Separately, hole PTDD056 was drilled to provide a core sample to Mintek of South Africa to see whether Paguanta’s deposits can be recovered using the dense media separation (DMS) technique, which would significantly lower the cost of the operation of the mine.
"DMS (Dense medium separation) might present an opportunity," Bohm said recently, though company is not budgeting on using this method.
Paguanta covers 39 square kilometres and is made up of 14 granted mining licences on the northern part of the Chilean copper belt.