| Work Detail |
PNX Metals Ltd (ASX:PNX) has commenced a 7,500 metre infill and extensional drill program at its Hayes Creek gold-silver-zinc project in the Pine Creek region of the Northern Territory. Drilling aims to define additional near-surface massive sulphide mineralisation and upgrade the Iron Blow and Mt Bonnie deposits. Drilling will also provide samples for metallurgical test work. Previous drilling at these deposits has intersected 50.39 metres at 10.12% zinc, 2.66 g/t gold, 283 g/t silver, 0.57% copper and 1.39% lead. James Fox, managing director, commented: “Information generated from this drilling program will be used to increase geological confidence in the resources to at least Indicated status for inclusion in the fully funded Hayes Creek PFS, which is due for completion by mid-2017.” Background PNX’s focus is on its four projects located in the Pine Creek Region, 180 kilometres south of Darwin. - Hayes Creek Project (flagship); - Burnside Project; - Moline Project; and - Chessman Project. The Hayes Creek project contains the Iron Blow and Mt Bonnie gold-silver-zinc deposits, located less than 3 kilometres apart and situated on granted mineral leases wholly owned by PNX. PNX is currently earning a 90% interest in Burnside, Moline and Chessman from Newmarket Gold NT Holdings Pty Ltd in 19 exploration licenses and 4 mineral leases covering 1,700 square kilometres. A further $0.55 million is required to be spent by December 2016 to achieve the 51% stage one earn-in. Langleys drilling completed, assays pending A seven hole drill program at the Langleys high grade gold prospect within the Burnside Project has now been complete. The program aims to define additional high-grade gold mineralisation to complement the already significant resources established at the nearby Hayes Creek gold-silver-zinc project. Assay results are expected shortly. Hayes Creek growth strategy The Hayes Creek pre-feasibility study will expand on the recently completed scoping study, which demonstrated a financially robust potential open pit and underground operation. The study found a base case pre-tax project net present value (NPV) of A$109.4 million with an internal rate of return (IRR) of 58%. This results in a payback period of less than 2 years, with a mine life in excess of 7 years. Production is planned to commence in 2019. PNX believes these returns can be increased further by increasing the mineral resource inventory through the drilling program recently completed at Langleys and program about to commence. The latest purchase of three mineral leases is also a part of this growth strategy. Analysis The 7,500 metre infill and extensional drill program at the Hayes Creek gold-silver-zinc project fits well with the company’s growth strategy and leverages it to exploration upside. Furthermore, with assays pending from the recently completed Langleys drill program and more drilling to commence, the next four months is set to be a busy period for the company with regular news flow expected. Shares in PNX are up 70% year to date, currently trading at $0.017. At the end of the June quarter PNX had $1.64 million in cash and also recently raised $1.5 million through a share placement. |
