(MENAFN - ProactiveInvestors - Australia) Black Mountain Resources' (ASX: BMR) maiden drilling program at its New Departure Silver Project in Montana has confirmed a downdip extension of historic workings with assays of up to 365 grams per tonne (g/t) silver.
The drilling has also indicated a potential strike length of 670 metres.
Initial results received so far include 3 metres at 365.47g/t silver, 0.11g/t gold, 0.35% lead, 0.46% zinc and 0.6% copper as well as 3 metres at 162.36g/t silver, 0.22g/t gold, 0.2% lead and 0.28% zinc.
"Our projects are located in an area of prolific silver mineralisation and these initial high grade silver intercepts of up to 365g/t silver underpin our belief that we can add significant value to the project through production and exploration outside of the historically worked areas," executive chairman Peter Landau said.
"This is the first time a drilling campaign has been implemented at this site, and with results indicating a strike length of 670 metres, we have planned a further drilling campaign to commence during the second quarter to test this highly prospective area of mineralisation further."
The maiden 13 hole drilling program at New Departure targeted the projected downward dip extension of an historic ore shoot and induced polarised anomaly targets previously identified.
"The widths of the intersection were also encouraging given previous narrow vein extraction and with this in mind, we look forward to receiving the additional drill results targeting the identified IP anomaly targets," Landau added.
Testing of the extension area will be carried out as part of the exploration program scheduled for the second quarter. This will also target extensions to the current mine plan.
Development work at New Departure is also progressing well with widening of the Laczay portal and tunnel almost complete.
The steel set structure will be set in the portal entry this week before a 335 metre decline is driven at 15% decline to access historic workings below the historic blocks known as the Main Zone.
This will also allow access to the Quien Sabe Zones and the Bonanza Zones by way of secondary drifts off the main decline.
Black Mountain is focussed on restarting small scale production in the first quarter of this year from two of the six identified mining blocks.
This includes the New Departure ore shoot, which historically produced the bulk of the high grade silver.
Since it was discovered in the 1880's, the historic New Departure mine has not being the target of drilling with all the workings following visible vein.
It has produced high grade silver through several operators though production ceased in the 1980s.
New Departure contains a non JORC-compliant Resource of 2.5 million ounces silver at over 15 ounces per tonne with Black Mountain saying previously that it was targeting initial production of 250 tonnes per day grading 600 grams to 800 grams per tonne.
The confirmation of a down-dip extension to historic workings and the identification of a strike length is a strong indicator that New Departure would be capable of producing silver for Black Mountain for some time.
Ongoing development work to start small scale production is also poised to bring in some initial cash flow for the company.
Proactive Investors believes the current share price of around 0.18 does not come anywhere near the intrinsic value inherent in New Departure or the Conjecture Silver Project in Idaho, both of which are near term production assets.
Further confirmation of the extension and strike length, as well as the start of production, are all potential catalysts for share price growth in the next 6-12 months.