• Resource Definition drilling continues to identify additional mineralisation with assays returning grades up to 52.8% combined zinc + lead (LV7040).
• Drilling from new cuddy 8.1 encounters significant massive sulphide mineralisation in 3 zones totalling 10.3m in aggregate outside of resource envelope (LV8004) assays awaited);
• Given recent drilling results and the target areas identified in the geophysical surveys, the Company has elected to allocate additional funds to regional exploration while maintaining the pace of ongoing resource definition drilling. Therefore the Company decided to cancel the accelerated acquisition of an additional 39% equity in the project as previously announced to conserve funding. The additional project equity will now be acquired in accordance with the original timetable. 

Consolidated Zinc Limited (CZL:ASX) is pleased to present the following report detailing assay results and drilling intercepts received at the Plomosas project resource definition drilling program.

CUEVITAS RESOURCE DEFINITION DRILLING

Underground drilling and development continued in Level 7 and the newly developed cuddy L8.1 testing down plunge extensions from Level 8.

Assays for drillholes LV7036 to LV7043 and LV7045 to LV7050 were received while those for completed holes LV7044, LV7051 to LV7053 and LV8001 to LV8004 are awaited (Figure 2).

Drilling continues to demonstrate that mineralisation extends over several hundred metres of strike and up to 80m down-dip.

Managing Director Will Dix commented “the new intersections to the south of our modelled mineralisation continue to support the Company’s view that significant base metal resources exist down dip and down plunge of the mine development. These new results will be incorporated into our initial resource estimate due out next month and provide additional targets for immediate follow up. This and the recent regional exploration results have provided the impetus for a re-think on capital management and the decision to focus our cash in the ground rather than accelerating the restructure of the project ownership at this time.”

Table 1 summarises the highlights of intercepts encountered in infill drilling and holes testing the limits of the resource, showing those assays returned and awaited. 

LV7037, LV7038 and LV7040 intersected significantly high grades with the former demonstrating that mineralisation extends above Level 7 towards Level 6:

Significantly, the drilling to date continues to demonstrate that high grade mineralisation extends below Level 7 (Figures 3, 5-6) which, at approximately 240m below surface, was the deepest of the main ore workings developed at Plomosas. Minor development down to Level 10 (310mbs) may provide additional access for future exploration of down dip extensions of massive sulphide mineralisation.

In addition, drillhole LV7037 has identified a new zone of mineralisation above Level 7 in an area of the mine located below Level 6 stopes. This demonstrates that although our focus is very much on the deeper extensions of the mineralisation, there are numerous opportunities within the existing mine environment to find additional areas that have previously been either ignored or previously deemed uneconomic for mining. This provides additional confidence for the ongoing investigations into the underground developments in sub-level 7 and sub-level 8.

A full set of updated sections and plans will be made available as more assay results come to hand.

Implications of drill intercepts from Level 8 drillling

Notably hole LV8004 intersected 3 significant zones of massive sulphide, including the target zone, comprising 3.45m, 2.55m and 4.30m respectively. These consisted of partially oxidised, massive sphalerite and galena with pyrite. Assays are not yet available for this drillhole but other intercepts of a similar style and composition have returned exceptional results.

Of particular interest is that the intercepts in LV8004 were encountered in the hanging wall above and outside the existing resource envelope boundary and present a new target for adding high grade mineralisation. Sections will be made available as more assay results come to hand and the full implications of the intersection are reviewed.

CAPITAL MANAGEMENT

Coupled with this new resource definition drilling, the recent regional exploration work, even at this early stage, has been successful in defining numerous prospects that would justify significant exploration expenditure including drilling. The Board has determined to prioritise exploration expenditure along with that directed to ongoing resource definition drilling.

Consequently the proposed accelerated acquisition of the additional 39% of the Plomosas project announced on 27 September, 2016 has been cancelled and the acquisition of that equity will now be undertaken in accordance with the original timetable (CZL has an option until July 2018). This will conserve available funds for the immediate application to the ongoing resource definition program and now regional exploration activity.

Yours faithfully,

ABOUT CONSOLIDATED ZINC

Consolidated Zinc Limited (ASX:CZL) is a minerals exploration company listed on the Australian Securities Exchange. The Company’s major focus is in Mexico where it recently acquired 51% of the exciting high grade Plomosas Zinc Lead Silver Project through its majority owned subsidiary, Minera Latin American Zinc CV SAPI. Historical mining at Plomosas between 1945 and 1974 extracted over 2 million tonnes of ore grading 22% Zn+Pb and over 80g/t Ag. Only small scale mining continued to the present day and the mineralised zones remain open at depth and along strike. The Company’s main focus is to identify and explore new zones of mineralisation within and adjacent to the known mineralisation at Plomosas with a view to identifying new mineral resources that are exploitable.

Competent Persons’ Statement

The information in this report that relates to exploration results, data collection and geological interpretation is based on information compiled by Steve Boda BSc (Hons), MAIG, MGSA, MSEG and Andrew Richards BSc (Hons), Dip Ed, MAusIMM, MAIG, MSEG, GAICD. Messrs Boda and Richards are both Members of Australian Institute of Geoscientists (AIG) and Mr Richards is also a Member of the Australasian Institute of Mining and Metallurgy (AusIMM).

Both Messrs Boda and Richards have sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that is being undertaken to qualify as Competent Person as defined in the 2012 edition of the ‘Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves’ (JORC Code). Messrs Boda and Richards consent to the inclusion in the report of the matters based on their information in the form and context in which it appears. 

Original Article: http://www.consolidatedzinc.com.au/wp-content/uploads/2016/11/151116-Further-high-grades-to-over-50%25-Zn-Pb-intersected-at-Plomosas.pdf