Rathdowney Resources (CVE:RTH) says that it has returned what it calls "excellent results" from a preliminary metallurgical test program on its Olza project in Poland, with the results having exceeded expectations.
The junior zinc and lead explorer's Project Olza hosts Mississippi Valley Type (MVT) zinc-lead deposits in Poland's historic Silesian mining district, where zinc-lead mining has taken place since the 12th century.
The project is located 70 kilometres northwest of Krakow in southern Poland.
The metallurgy test program, done by SGS Mineral Services, was completed on a bulk composite prepared from the core of 25 holes drilled by Rathdowney at the property. The zinc and lead content of the composite was comparable to the initial resource estimate announced last year.
The company said it saw zinc recoveries of greater than 90%, for a zinc concentrate assaying 55% to 60% zinc and containing 170 grams per tonne (g/t) silver, using standard zinc and lead flotation conditions without any upgrading ahead of flotation.
The zinc concentrate is also expected to be "very low" in iron, the company said, at less than 1% iron, which gives some flexibility for future process design.
Lead recoveries of 90% were also tested, for a lead concentrate assaying 65% to 70% lead, containing 50 g/t silver.
Around 85% of the silver was recovered in the zinc concentrate, while roughly 5% was recovered in the lead concentrate.
"We are delighted with these very positive results from this first phase of metallurgical testwork for Project Olza," said president and CEO, John Barry, in a statement on Tuesday.
"Historically zinc and lead recoveries and concentrate grades from deposits within the Silesian District have been excellent, but this initial testing has exceeded even these expectations," he continued, adding that testing also indicates the company could generate additional revenue from the silver in the deposit.
The preliminary testing also found that mineralization at Olza is "relatively soft", with testwork to continue to further optimize flotation conditions and to prepare concentrate and tailings for a more detailed analysis.
Olza is located within 20 km from the ZGH Boleslaw smelter complex, which hosts a concentrator and tailings facilities with additional capacity that Rathdowney could potentially benefit from.
The Pomorzany Mine in the district - the only major feed-source for Boleslaw - is scheduled to shut down in 2014, meaning that the refinery will need feed. The junior explorer could also benefit from the workforce that will be available when Pomorzany comes offline.
As key established mine operations are set to be taken offline over the medium term and zinc demand continues to grow, zinc concentrate supply deficits are looming.
"With its excellent location and geological potential, Rathdowney presents a compelling investment opportunity among a small peer-group of zinc-focused juniors," the company said in its release.
Currently, Olza boasts an inferred resource of 21.2 million tonnes grading 5.88% and 1.54% lead, for a total of 2.75 billion pounds of zinc and 720 million pounds of lead.
In addition to the preliminary metallurgical testing, goals for 2013 include about 20,000 metres of drilling to increase the confidence in the resource base for mine planning, as well as further environmental and feasibility work.
Shares of Rathdowney were changing hands at 51 cents this morning - up almost 16 percent in the last six months.
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