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 (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
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
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
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."