Southern Hemisphere Mining (ASX: SUH) has unearthed yet another extremely broad intersection at its Llahuin Copper Project in Chile which confirms the presence of a higher grade core in the Central Porphyry Zone.
The new intersection of 302 metres at 0.64% copper equivalent was discovered just 85 metres west of the previous bonanza hit of 440 metres at 0.75% copper equivalent and is likely to deliver a material increase in resource tonnage and upgrade due in the September quarter.
Significantly, this new intercept included a high grade interval of 36 metres at 1.08% copper equivalent from 236 metres, pointing to the potential for a substantial uplift in the average grade of the Llahuin Resource.
An additional contiguous intercept of 56 metres at 0.48% copper, for which the gold results are awaited, increases the overall intercept to 358 metres.
Importantly, the new high grade assays will form the basis for an upgrade to the 318,000 tonnes of copper and 307,000 ounces of gold Resource.
The current total resource for Llahuin is 106.2 million tonnes at 0.4% copper equivalent, contained in the Measured and Indicated categories.
The extent of the high-grade core zone has been tested with two further drill holes, DDH-LLA-026, 65 metres to the south of DDH-LLA-021, and DDH-LLA-027, 85 metres to the east of DDH-LLA-021. Results will be announced once assays are received.
Trevor Tennant, managing director, commented on the positive results: "There may have been a perception that the bonanza 440 metres intersection in DDH-LLA-021 was a narrow- vein feature.
"The follow up drill hole DDH-LLA-025, 85 metres to the southwest, confirms this is not the case and that in fact the Central Porphyry Zone has a high grade core.
"The impact of these results on the overall grade of the resource at Llahuin will be significant. A priority now will be delineating the full extent of this high grade core and incorporating the recent high grade drilling results in an updated resource estimate, which we are aiming to finalise during the September 2012 quarter."
Potential material increase to Resource
Building on the potential of the project, Southern Hemisphere's newly acquired Ferrocarril concessions, immediately to the south of the Central Porphyry Zone, could deliver a material increase to the resource tonnage, with the concessions demonstrating similar geology and footprint to the Central Porphyry Zone.
Assays have been received from one drill hole completed to date at the Ferrocarril Zone which intersected a mineralised dioritic porphyry that appears identical to the Llahuin porphyry.
During the Chilean concession renewal phase, which takes place in March and April of each year, Southern Hemisphere made applications for exploration concessions with an area of 6 square kilometres located immediately south and contiguous with the Amapolo exploitation licenses which host the Llahuin Project.
These concessions, held at that time by a Tier 1 mining company, were not renewed by that company and consequently lapsed.
As a result, Southern Hemisphere's applications came into effect giving the company 100% control over these concessions.
Tennant said: "Many foreign-based mineral explorers are coming into Chile and doing expensive deals.
"Our company excels at doing astute deals in tandem with monitoring the concession application system for opportunities.
"We may well look back on this as the moment the Llahuin Project gained critical mass, all without the need to do a deal with a third party."
Cerro de Oro Zone
The vertical extension of the Cerro de Oro Zone, located 1 kilometre south of the Central Porphyry Zone, is currently being tested with a diamond drill hole, as two previous reverse circulation holes intersected a dioritic porphyry which also appears identical to the Llahuin Porphyry.
A Scoping Study at Llahuin is currently underway, with the objective of defining an operation capable of producing between 45,000 and 50,000 tonnes per annum of copper metal plus gold credits.
This is expected to be completed early in the December quarter of 2012.
Southern Hemisphere has a market cap. of A$20 million and with cash of $4 million and no debt has an enterprise value of $16 million, which appears slight considering the company has a JORC Resource of 318,000 tonnes of copper and 307,000 ounces of gold, which is likely to see a material increase in tonnage in the September quarter of 2012.
The confirmation of a high grade core at the Central Porphyry Zone and the potential to significantly increase the Resource with the addition of the Ferrocarril concessions should spark some investor interest.
Proactive Investors is a market leader in the investment news space, providing ASX "Small and Mid-cap" company news, research reports, StockTube videos and One2One Investor Forums.