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Corporate Spotlight

Pacifico Minerals Ltd (“Pacifico”, ASX: PMY) is a West Australian based development and exploration company focussed on developing the Sorby Hills base metals project in Western Australia
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PROJECT UPDATE

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SORBY HILLS LEAD-SILVER-ZINC PROJECT UPDATE 

ASX Announcement 6 May 2019 


Pacifico Minerals Limited (ASX: PMY) (‘Pacifico’ or the ‘Company’) is pleased to provide a further update on drilling results from the initial Phase I drilling campaign and ongoing activities at its 75% owned Sorby Hills Lead Silver Zinc Project (“Sorby Hills”) located 50km northeast of Kununurra in Western Australia.


HIGHLIGHTS 

SORBY HILLS JOINT VENTURE PROJECT 

  • Final results have now been received from Pacifico’s Phase I drilling program of late 2018. 
  • Results have confirmed that C, DE, and F deposits are linked and can be referred to as a single deposit with a strike length of 1.7km and may be minable with a single open cut. 
  • Significant drill intercepts, received recently and previously unreported include: 
    • 12.3m at 6.5% Pb equivalent (5.5% Pb, 42g/t Ag) and 0.23% Zn from 90m, - I Deposit in drill hole AI011. 
    • 2.6m at 19.5% Pb equivalent (15.3% Pb, 175g/t Ag) and 0.65% Zn from 108.5m, - F Deposit in drill hole AF047. 
    • 7.3m at 5.8% Pb equivalent (4.1% Pb, 70g/t Ag) and 0.02% Zn from 110.7m, - F Deposit in drill hole AF048. 
    • 14.4m at 4.1% Pb equivalent (3.6% Pb, 20g/t Ag) and 0.24% Zn from 57.6m, - F Deposit in drill hole AF018. 
  • Recent intersections from the F and I Deposits will be included in the next Mineral Resource Estimate (“MRE”) after Phase II drilling results are received. 
  • These results, combined with deeper geological understanding, again confirm the high potential of continuing to expand the Sorby Hills deposits. 
  • Definitive Feasibility Study (“DFS”) work programs underway including, further Dense Media Separation (“DMS”), metallurgical characterisation and ore sorting testwork. 
  • Phase II infill and expansion drill program on track to commence mid-late May 2019


Note: Zinc has not been included in Pb equivalent calculations at this time, however work currently being completed by Pacifico may provide the supporting data to include in future calculations. See Appendix 3 for equivalent Pb% calculation assumptions. 


INTRODUCTION 

Since taking control of the Sorby Hills Project, Pacifico’s strategic focus has been on commercialising the Project with the initial steps of declaring a maiden JORC 2012 compliant Mineral Resource Estimate (“MRE”), increasing the confidence level of the MRE and further optimising the project economics given recent advances in processing technologies.


To this end the following work has been completed by Pacifico within just 6 months:


October 2018 – Acquisition of the Sorby Hills Project. 


October to December 2018 - Phase I Drill Program to upgrade and expand the resource. 72 drill holes were completed for a total of 5,372m drilled. Drilling comprised a combination of both reverse circulation (“RC”) to end of hole and RC pre-collar with diamond drilled tails to end of hole (See Appendix 1 and 2).


March 2019 – Updated Mineral Resource Estimate with increase in the Global Resource to 30Mt of 4.7% Pb equivalent (3.7% Pb, 43g/t Ag and 0.6% Zn) which includes an Indicated Resource of 10.9Mt of 5.0% Pb equivalent (3.9%Pb, 46g/t Ag and 0.4% Zn) (ASX announcement 7 March 2019).


March 2019 - Updated PFS confirms the strong economics of the Sorby Hills Deposit for a 1Mtpa operation to produce 249kt of lead and 9.35Moz of silver, with a pre-tax NPV (8% discount rate) of A$243M and pre-tax IRR of 62%. (ASX announcement 26 March 2019).


DRILL RESULTS 


The complete set of Phase I drill intercepts is presented in Appendix 1. 


The recent drill results received will assist in continuing to convert Inferred Resources to Indicated Resources, particularly in the F Deposit and will be undertaken as part of the next Mineral Resource Estimate (MRE) to be completed once Phase II drilling results have been received.


Drill results from the Phase I drilling campaign which tested the B, C, DE, F and I Deposits (Figure 1) are now all received. It is apparent that the C, DE, and F deposits are linked and can be referred to as a single deposit with a strike length of over 1.7km. These deposits are now grouped as the CDEF Deposit and may be minable with a single open cut.


GEOLOGY AND MINERALISATION 

All significant mineralisation lies at or close to the Sorby Dolomite and Knox Sediments contact, either hosted by slump breccia in the overlying Knox Sediments, or in the immediately underlying Sorby Dolomite. In the slump breccia leadsilver mineralisation is disseminated as galena and sphalerite in the shaley matrix of the breccia, or as veining in Sorby Dolomite fragments. Base metal mineralisation in the more brittle underlying Sorby Dolomite consists of galena and sphalerite in fractures and the matrix of hydrothermal breccias.


CDEF DEPOSIT

The drilling by Pacifico at the CDEF Deposit (Figures 2 and 3) has provided a geological understanding of the controls and continuity, which with infill drill spacings has enabled a significant portion of the Inferred Resources to be converted to Indicated Resources. Intersections in the central part of the CDEF Deposit include ACD046 with 20.0m of 7.3% Pb, 56g/t Ag and 0.4% Zn. Mineralisation consists of shallow, flat lying moderate grade mineralisation on the western side of the deposit. To the east there is a major fault zone (overall drop of 60 to 100m). The best mineralisation lies immediately to the west of and within the fault zone. Mineralisation continues eastwards at depth as a flat to gently dipping horizon. In the northern part of the CDEF Deposit drill hole AF012 intersected 15.0m of 5.8% Pb, 81g/t Ag and 0.1% Zn and AF005 intersected 11.7m of 10.8% Pb, 105g/t Ag and 0.4% Zn.


I DEPOSIT 

I Deposit forms a relatively flat lying horizon of mineralisation (Figure 4). Drill hole AI010 intersected 9.4m of 6.6%Pb, 53g/t Ag and 0.9%Zn and AI011 intersected 12.3m of 5.5% Pb, 0.23% Zn and 42g/t Ag.


B DEPOSIT 

The B Deposit is interpreted as forming two lenses separated by a low angle fault (Figure 5). The mineralisation may extend further along strike to the north and south, beyond the area drilled by Pacifico and will be targeted by the Phase II drilling program. Intersections include AB033: 16m of 4.9% Pb, 0.69% Zn and 20g/t Ag.


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QUARTERLY

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QUARTERLY ACTIVITIES REPORT – MARCH 2019 

ASX Announcement 30 April 2019 


Pacifico Minerals Limited (ASX: PMY) (‘Pacifico’ or the ‘Company’) is pleased to provide the following activities report for the March 2019 quarter.


HIGHLIGHTS 

SORBY HILLS JOINT VENTURE PROJECT 

  • Phase I infill drilling campaign completed with results received from 34 of 52 holes to be analysed. 
  • Significant drill intercepts from each deposit drilled include: 
    • 11.7m at 13.2% Pb equivalent (10.8% Pb, 105 g/t Ag) and 0.4% Zn from 75.7m, F Deposit in drill hole AF005. 
    • 10.0m at 7.8% Pb equivalent (6.6% Pb, 53 g/t Ag) and 0.9% Zn from 82m, I Deposit in drill hole AI010. 
    • 9.7m at 9.1% Pb equivalent (7.5% Pb, 68 g/t Ag) and 1.1% Zn from 76m, CD Link in drill hole ACD019. 
    • 20.0m at 8.6% Pb equivalent (7.3% Pb, 56 g/t Ag) and 0.4% Zn from 11m, DE Deposit in drill hole ACD046. 
    • 9.0m at 8.3% Pb equivalent (7.6% Pb, 32 g/t Ag) and 1.1% Zn from 37m, B Deposit in drill hole AB033. 
  • Updated Mineral Resource Estimate completed, resulting in a material upgrade of the Resource 
    • 82% increase in the tonnage of Global Resource to 29.97Mt of 4.7% Pb equivalent (3.7% Pb, 43g/t Ag) and 0.6% Zn. 
    • 123% increase in the tonnage of Indicated Resources to 10.85Mt of 5.0% Pb equivalent (3.9% Pb, 46 g/t Ag) and 0.4% Zn. 
  • Review of previous Dense Media Separation testwork has identified exceptional results indicating ore grades may be upgraded by two to three times prior to processing. 
  • Updated Pre-Feasibility Study highlights include: 
    • 1Mtpa operation producing high grade concentrate containing 249kt Pb and 9.35Moz Ag. 
    • Initial 8 year open pit mine life based solely on Indicated Resources. 
    • Pre-tax NPV of $243M (8% discount rate) and pre-tax IRR of 62%. 
    • Pre-production capital expenditure $95.4M including $10.5M contingency. 
    • Pre-tax Payback 16 months from commercial production. 
    • Shallow open pit mining with C1 direct cash cost of production of US$0.06/lb including silver credits.


CORPORATE 

  • Subsequent to quarter end, Pacifico received firm commitments from sophisticated and professional investors to raise $4 million (before costs). 
  • The final payment for the acquisition of the Company’s 75% interest in the Sorby Hills Joint Venture Project was made subsequent to quarter end. The Company now has full and unencumbered access to the Project.


SORBY HILLS JOINT VENTURE PROJECT Western Australia (Lead, Silver, Zinc) 

The Sorby Hills Joint Venture Project is located approximately 50km north-east from the regional centre of Kununurra. There are existing sealed roads to transport concentrate from the Sorby Hills site to the facilities at Wyndham Port (150km away). Established infrastructure allows for fast track production.


Figure 1. Sorby Hills Joint Venture Project Regional Location. 


STRONG DRILLING RESULTS 

The Phase I drilling campaign, completed in 2018, was designed to provide angled and oriented diamond drill core into B, C, CD link, D, F and I Deposits (refer Figure 2). 


Drilling comprised a combination of RC to end of hole and RC pre-collar with diamond drilled tails to end of hole. This was the first drilling campaign since 2011. Fresh drill core demonstrated the simple mineralisation consisting mostly of coarse silver bearing galena (lead sulphide). The campaign has clearly delineated between ore and waste and highlights the coarse-grained nature of the galena which is favourable for pre-concentration prior to grinding and flotation. As such, drill core from the Phase I drilling campaign is being utilised by Pacifico to assess various density separation techniques designed to separate ore from waste rock to form a pre-concentrated product prior to further concentration via a lead flotation circuit to significantly reduce capital and operating costs. 


Most of the mineralisation occurs as a sediment replacement deposit predominantly along the flat-lying contact between an upper siltstone (Knox Sediments) and a lower dolomite (Sorby Dolomite), confirmed by geological logging and interpreted rock geochemistry using a portable XRF.


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SORBY STARTUP

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Western Australian EPA Recommends Five Year Extension for Sorby Startup 

ASX Announcement 17 April 2019 


Pacifico Minerals Limited (ASX: PMY) (‘Pacifico’ or the ‘Company’) is pleased to announce that they have received Report 1632 from the Western Australian Environmental Protection Authority (‘EPA’) recommending that it is appropriate to amend condition 3 of Ministerial Statement 964 to allow for the extension of the timeframe for substantial commencement of the Sorby Hills Lead-Silver-Zinc proposal for a further 5 years, to 2 April 2024.


Background 

The Sorby Hills Lead-Silver-Zinc Project proposal is to develop a lead, silver, and zinc mine, associated infrastructure, and processing facilities. The Project is located approximately 50 kilometres north of Kununurra, and the concentrate produced is to be transported by road and shipped through Wyndham Port.


The EPA assessed the proposal at the level of Public Environmental Review and released its assessment report, EPA Report 1491, in October 2013. The EPA identified the following key environmental factors relevant to the proposal:


  • Flora and vegetation; 
  • Human health; 
  • Marine environmental quality; and 
  • Closure and rehabilitation.


In applying the Environmental Protection Authority Statement of Environmental Principles, Factors and Objectives, December 2016 (‘SEPFO’) these factors are now represented by:


  • Flora and vegetation; 
  • Air quality; and 
  • Marine environmental quality.


In the October 2013 EPA Report (1491), the EPA concluded “The Project can be managed to meet the EPA’s objectives, provided there is satisfactory implementation by the proponent (‘Sorby Management Pty Ltd’ or ‘Sorby’) of the EPA’s recommended conditions.” 


Requested Changes to Conditions 

Condition 3-1 of Ministerial Statement 964 requires Sorby Management Pty Ltd to substantially commence the proposal within five years of the date of issue of the Statement (before 2 April 2019). Sorby has requested an extension of the Time Limit of Authorisation (now referred to as ‘Time Limit for Proposal Implementation’) for substantial commencement to be extended for a further five years to 2 April 2024.


As part of its review process while considering granting Sorby an extension on the commencement of the Sorby Hills Project, the EPA considered the impacts on the three key environmental factors.


Conclusions 
Regarding the three key environmental factors, information provided by Sorby, and relevant EPA policies and guidelines, the EPA concluded that:


  • There are no changes to the proposal; 
  • There is no significant new or additional information that justifies the reassessment of the issues raised by the proposal; 
  • There has been no new significant change in the relevant environmental factors since the proposal was assessed by the EPA in Report 1491, October 2013;
  • No new significant environmental factors have arisen since the EPA’s assessment of the proposal; and 
  • Existing implementation conditions will continue to address the relevant environmental factors and manage and mitigate the potential impacts of the proposal.


Recommendations 

The EPA has submitted the following recommendations to the Minister for Environment under section 46 of the Environmental Protection Act 1986:


1. That it is appropriate to amend condition 3 of Ministerial Statement 964 to allow for the timeframe for substantial commencement of the Sorby Hills Silver Lead Zinc proposal to be extended for a further 5 years, to 2 April 2024; and 

2. That, after complying with section 46(8) of the Environmental Protection Act 1986, the Minister issues a statement of decision to change condition 3 of Statement 964.


Managing Director Simon Noon said “The Sorby Hills Mining proposal was subject to long and rigorous assessment prior to the EPA Board’s positive decision in 2013. The recommendation from the EPA to extend the Time Limit for Proposal Implementation for a further five years, clears the way for the Sorby Hills Joint Venture to fast track production in accordance with best practice environmental management.”


A copy of EPA Reports 1491, 1632, and the Ministerial Statement 964 can be found on the Company’s website.


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CORPORATE PRESENTATION

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ABOUT

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Pacifico Minerals Ltd (“Pacifico”, ASX: PMY) is a West Australian based exploration company with interests in Australia, Mexico and Colombia.


Sorby Hills Project, Western Australia, Australia (75%)
Pacifico owns a 75% interest in the Sorby Hills Joint Venture Project with Partner Henan Yuguang owning the remaining 25%. Henan Yuguang is China's largest lead smelting and silver producer.

Sorby Hills is Australia's largest near-surface lead-silver-zinc deposit and has a JORC 2012 compliant Resource, EPA approval, approved mining titles, excellent recoveries and to produce a high-quality concentrate, established infrastructure, and potential high operating margins from high-grade shallow deposits. 


Borroloola West Project, Northern Territory, Australia (51%)
Pacifico is currently advancing the Borroloola West Joint Venture Project, which covers an outstanding package of ground with high potential for the discovery of world class base metal deposits. Our Joint Venture Partner is Sandfire Resources NL.

South Australian Project, South Australia, Australia (100%)
Licences have been granted for ground prospective for cobalt and other battery metals. Exploration is expected to commence shortly.


Violin Project, Guerrero, Mexico (100%)
Pacifico has acquired an option to purchase 100% interest in the Violin Gold-Copper Project in the Guerrero Gold Belt of Mexico, with highly attractive terms. The Project has high prospectivity for the development of a major gold-copper deposit.

An operations centre has been established, and land access agreements have been finalised. Drilling is scheduled for October 2018. 


Berrio Project and Tenement Applications, Colombia (100%)
The company retains a valuable strategic copper-gold position in Colombia. Our Berrio Gold Project is located within the Segovia Gold Belt, from which several million ounces of gold have been produced over the past 150 years. Exploration work for the Berrio Gold Project is currently on hold to allow the company to focus on potential Joint Venture or purchase agreements at Urrao and Natagaima. Both Projects are highly prospective for the discovery of economic copper-gold deposits. 

 

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