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Tuesday, 30 April 2013
Rathdowney Resources confirms expansion potential with encouraging Chechlo results from Olza project
Rathdowney Resources (CVE:RTH) unveiled Tuesday new results from core drilling on the Chechlo concession at its Project Olza in southern Poland, seeing zinc, lead and silver mineralization of "significant grades and thicknesses".
Results from Checlo included 41.4 metres at 7.67% combined zinc and lead, and 23.5 grams per tonne (g/t) silver in hole OLZ-224, including 19 metres at 12.41% zinc and lead, and 40.7 g/t silver.
Hole OLZ-225 hit 6.40 metres of 14.24% combined zinc and lead and 11.9 g/t silver, including 3.5 metres of 22.09% zinc and lead and 18.2 g/t silver.
Olza is a Mississippi Valley Type (MVT) zinc-lead-silver project situated in the historic Silesian mining district, a Brownfield historical mining district with access to mining and logistical infrastructure.
Last September, the company released an initial resource estimate for the project consisting of 21.2 million tonnes in the inferred category grading 7.42% combined zinc and lead, at a 2% zinc cutoff.
The resource covers just the Zawiercie and Rokitno exploration concessions, within a 9-square kilometre area of the large and prospective Olza property.
More recent drilling, however, has taken place at the Chechlo prospect, about 15 km southeast of the initial resource-area.
Rathdowney said that it drilled two holes in an area where widely-spaced drilling took place in the past. The results were found to be particularly "compelling", it said Tuesday, as a new style of mineralization was found.
"Our drilling shows that the Chechlo prospect hosts zinc, lead and silver mineralization of significant grades and thicknesses within underlying older dolomite units that we have not previously explored," said president and CEO John Barry in the statement released on Tuesday.
"Importantly, the presence of this new style of mineralization in the Devonian strata at Chechlo indicates the opportunity for its discovery in other parts of Rathdowney's exploration concessions."
Last month, equities research firm PI Financial initiated coverage on Rathdowney Resources with a “buy” recommendation, citing the company’s proximity to infrastructure, exploration upside and near term catalysts.
PI analyst Aleem Ladak said in the report that Rathdowney’s proximity to excellent infrastructure, means options.
“The deposit sits 10 kilometres north of the Pomorzany underground zinc mine and 15 kilometres north of its concentrator, refinery and smelter. In addition, the region contains extensive logistical infrastructure such as railways, rail-spurs, roads and power lines.”
Rathdowney CEO Barry said in the release today that the project is "strategic and expandable", and could help Europe, Poland and the Silesian region in terms of security of indigenous metal supply.
"Our work has confirmed that the Olza concessions host a significant mineral resource with excellent expansion potential. The project is located in a brownfield setting, connected by rail to the fully-integrated mining infrastructure at nearby Boleslaw that is currently supplied by mines nearing the end of their operating life," he said, adding that there are data collecting, engineering and community engagement activities now underway at the site.
PI Financial noted in the research report that key near-term catalysts for Rathdowney include full deposit delineation, which could be accompanied by a “substantial increase” in the resource size.