Global Minerals (CVE:CTG) has had some stellar drill results from the recently completed underground drill program at its Strieborná silver/copper project fortify the company’s high hopes for the property – that is, meeting its goal for the start of production in 2015.
The results, which the company says improved the size and potential economics of the Slovakian property, extended mineralization at least another 50 metres above the top of the previously projected resource.
"This, combined with grades and intercepts that were thicker and stronger than anticipated, add up to potentially more ounces," says CEO William Pincus.
"Given our top-down mining plan, these ounces could be the first we access, and given the high grades, they could no doubt improve the economics of the project."
Indeed, the chief executive is not embellishing about the high grades. The company released results last week for 12 drill holes as part of the now completed underground drill program at the project, with notable holes returning 11.7 metres of 507 grams per tonne (g/t) silver and 1.8% copper.
Hole STR-06-13-024 also intercepted 18.2 metres of 427 g/t silver and 1.3% copper, while hole STR-06-13-026 returned 9.0 metres of 590 g/t silver and 2.3% copper.
The high grade nature of the deposit is further amplified by the relatively near surface nature of the resource, which currently has a depth of only 600 metres, according to a recent research note released by Stonecap Securities.
The Strieborná project is part of the past producing Maria Mine, which operated until the late 1990s. As a result, in addition to having much of the necessary surface infrastructure already in place, such as rail, power, and water, there are approximately 3,000 metres of underground development tunnels that are expected to significantly reduce the initial capex necessary to bring the mine back into production. In March of this year, the company signed a cooperation agreement with the municipality of Roznava to develop Strieborná, and also inked a deal to buy a tailings facility next to the planned processing mill site for 2.5 million euros.
The results of the 5,000-metre underground drill campaign, which was aimed at increasing the level of confidence in the deposit, will be used to update the project's resource estimate, and to finish a preliminary economic assessment in the third quarter of this year.
"Once the resource gets completed, which we expect fairly soon, we will get our mining engineers to use that resource to update the mine design for the preliminary economic assessment," the chief says, adding that metallurgy work is largely completed, as are the cost estimations.
"We think this has been a very unique drill program in the sense that all the surprises have been good ones. Now we will let the engineers do their work and wait for the results."
Pincus stresses that the company's goal is to put the Strieborná vein into production as soon as possible, with the game plan being for Global Minerals to operate the mine on its own. But the chief is not unrealistic, as he says that given the general challenging environment for junior explorers, the company will look at all alternatives.
With a cash position of $3.9 million at the end of March, Global has enough to take the company to the preliminary economic assessment stage. It plans to enter discussions for various financing options once it has a better idea of the projected capital costs for the property.
The company is also looking to continue to drill from underground to further expand the resource. Currently, the project, without the latest results from the drilling campaign, hosts total global resources of 28 million ounces of silver at 253 g/t silver and 78 million pounds of copper at 1.0% copper.
Strieborná aside, Global Minerals has lots of potential exploration upside. The company has indicated that there are 90 known veins across its 13,500 hectare land package. This is in addition to discovery of four known veins that parallel the existing resource.
Shares of Global, which currently has a market cap of just over $12 million, are trading at 11 cents on the TSX Venture Exchange.
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