(MENAFN - ProactiveInvestors - Australia) Southern Hemisphere Mining (ASX: SUH) continues to demonstrate the potential to grow the resource at its flagship Llahuin Copper-Gold Project in central Chile with strong new intersections.
Drilling at the project will be accelerated following completion of the landmark US35 million farm-in agreement with the over US3 billion market capitalised Lundin Mining Corporation (TSX: LUN), providing US6 million of committed funds for drilling.
Recent results include more thick intersections of up to 398 metres at 0.43% copper equivalent from 32 metres, including 46 metres at 0.85% copper equivalent, from the Central Porphyry Zone.
They also include new higher grade results of up to 90 metres at 0.55% copper equivalent from 116 metres from the Cerro de Oro porphyry zone, located 1 kilometre to the south, where a breccia zone has been identified.
Importantly, the latest results have further extended the high grade core within the Central Porphyry Zone, which already hosts 51 million tonnes at 0.5% copper equivalent of the total current resource.
This core is easily accessible and has the potential to provide higher grade feed during the early stages of production, which could significantly enhance project economics.
Trevor Tennant, managing director, said drilling was continuing to demonstrate significant upside to the current resource inventory at Llahuin.
"The latest results show that we have a major copper-gold project on our hands at Llahuin, with significant new intercepts achieved at both the Cerro de Oro and Central Porphyry Zones.
"These results will be incorporated into an updated resource model, which will form the basis of a mining schedule to be used as part of a Desktop Scoping Study.
"With excellent results continuing to flow, we are very much looking forward to the new accelerated drilling campaign following our recently completed farm-in agreement and strategic investment by Lundin Mining.
"We are confident that sustained drilling in the coming months will provide a definitive overview of the scale and potential of the Llahuin Project."
Other drilling highlights from the Cerro de Oro porphyry zone include 34 metres at 0.52% copper equivalent from 220 metres, and 90 metres at 0.48% copper equivalent from 12 metres including 20 metres at 0.52% copper equivalent.
Drilling of the higher grade core within the Central Porphyry Zone has returned thick intercepts including:
- 306 metres at 0.42% copper equivalent from 128 metres, including 106 metres at 0.54% copper equivalent and 38 metres at 0.44% copper equivalent;
- 258 metres at 0.4% copper equivalent from 64 metres, including 44 metres at 0.48% copper equivalent and 98 metres at 0.45% copper equivalent.
Updated resource model
The new additional drill results will be included in a resource model as part of a Scoping Study.
Llahuin currently hosts a Measured and Indicated resource of 144.9 million tonnes at 0.4% copper equivalent for 435,650 tonnes of copper and 459,180 ounces of gold.
The high confidence Measured category hosts 88.9 million tonnes at 0.42% copper equivalent, and there is an additional Inferred Resource of 16.7 million tonnes at 0.33% copper equivalent.
The next program planned for Cerro de Oro includes deeper drilling by completing reverse circulation pre-collars with diamond drill hole extensions.
An IP and ground magnetic survey has also been commissioned and is underway. This survey will cover the newly discovered Ferrocarril Zone.
A drill program will be planned on receipt of the interpretations of the survey.
Landmark farm-in and placement at premium
The farm-in deal will see Lundin Mining spend up to US35 million on exploration at Llahuin Copper- to earn a direct stake of up to 75% over a six-year period.
Lundin Mining has also taken a strategic 11.5% stake in Southern Hemisphere by way of a US5 million share placement at C0.25 per share on the TSX-V, representing a 47% premium.