Herencia Resources says drilling at Paguanta in Northern Chile unaffected by quake

Herencia Resources (AIM: HER) told investors that its Paguanta project in Northern Chile remained unaffected by the massive earthquake that hit the country over the weekend. The company noted that no damage has been reported at the mineral exploration site.

Last week, Herencia began a 3,500m diamond drilling program at Paguanta. The zinc-silver-lead-gold project is targeting potential high grade extensions to the known mineralisation after the previous drill programme returned high grade assay results in 2008.

The drilling program is expected to run until May, with all assay results scheduled for June 2010.The Paguanta project is Herencia’s primary focus. Of the 10 holes drilled previously into the Patricia zone at Paguanta, eight intersected mineralisation, four of which returned high zinc-silver-lead grades. 

The highest individual grades were 15.75% zinc, 447pm silver and 5.58% lead, while surface rock chip sampling has extended the zone of anomalous mineralisation to the east with best results of 1515 and 1075 g/t silver. A scoping study of the Patricia deposit estimated the total mining inventory at 2.67 Mt (million tonnes) and the underground mining inventory at 1.24 Mt grading 5.28% zinc, 1.84% lead and 102 ppm silver. Initial potential mine life is currently estimated at five and a half year, which could be extended with more drilling. Capital costs are estimated at US$55.6 million and site operating costs at US$55.32/t (tonne).

The project comprises an indicated and inferred mineral resource of 3.15 Mt at 3.9% zinc, 1.3% lead and 74 g/t (grammes per tonne) silver including a higher grade component of 1.01 Mt at 6.6% zinc, 2.2% lead and 119pm silver.

http://www.proactiveinvestors.co.uk/companies/news/13933/herencia-resources-says-drilling-at-paguanta-in-northern-chile-unaffected-by-quake-13933.html