JOHANNESBURG (miningweekly.com) – Australia’s Golden Rim has completed the $2.29-million acquisition of the Paguanta zinc/silver/lead project, in northern Chile, where the company will start work shortly.
Golden Rim, which bought 70% of the project from Herencia Resources, believes the acquisition is timely, as fundamentals for zinc are strong, based on demand for the metal outstripping supply.
Zinc and silver – which account for the bulk of the metal value at Paguanta – have been two of the top performing commodities thus far in 2016, with the price of zinc increasing by 44% and the price of silver advancing by 41%.
Citing an analyst from ICBC Standard Bank, Golden Rim said in a statement on Thursday that refined zinc could be in a deficit of 550 000 t this year and 660 000 t in 2017, owing to mine closures and supply curtailments.
Golden Rim added that it was also well positioned to capitalise on the revival of the precious metals markets, given the high-grade silver component at the newly acquired mine.
Paguanta comprises 14 exploitation concessions covering 3 900 ha and eight concessions covering 2 100 ha. Since late 20015, about 40 000 m of drilling, at a cost of $31.5-million, has been undertaken at Paguanta.
The Patrica prospect at Paguanta hosts mineral resources of 4.4-million tonnes at 3.7% zinc, 14% lead, 84 g/t silver and 0.2 g/t gold. Golden Rim’s due diligence revealed that the Cathedral vein at Patrica will likely be its focus for a future mine development. An initial exploration target of about 4.5-million tonnes to 6.8-million tonnes at grades of between 4.5% to 6.7% zinc, 1.5% to 2.3% lead and 100 g/t to 150 g/t silver has been set for this area.