Sunshine hits new high-grade silver vein

With recent drilling at the Pirquitas silver-tin deposit in northern Argentina having encountered new mineralization, Sunshine Mining & Refining (SSC-N) reports that the final feasibility study on the project may be delayed.

The company intercepted 27 metres of mineralization averaging 176 grams silver per tonne, including 15 metres grading 254 grams silver, on a previously unknown structure north of the main Potosi vein. Preliminary evaluation of the structure indicates it to be a splay from the Potosi vein.

The mineralization was encountered during an extensive drilling campaign designed to expand current reserves at the project. The hole was drilled on a hill above the San Miguel zone, which hosts most of the reserves.

“If this (new) structure has any significance, we’ll need a little extra time,” says William Davis, Sunshine’s executive vice-president.

The intercept comes within an area of prestripping, which could prove advantageous to the company. Changing what was waste into ore would reduce the stripping ratio for the deposit and, if the mineralization extends far enough downhill, the company would need extra time to re-evaluate the mine plan, Davis says.

“Instead of driving around the hill to the waste dumps, we could take out the hill and provide immediate access to the dumps. It isn’t a bad situation to be in.”

The final feasibility study was due by August, but another four to six weeks may be required, Davis says.

Sunshine has completed 11,000 metres of a 16,000-metre program. Nearly half of the assays have been received, with the remainder expected in the next few weeks. The company expects to calculate a reserve estimate based on these results.

Sunshine also plans additional infill drilling around the new zone, as well as on the Potosi vein.

The company intends to take the feasibility study to the financial markets to raise money for construction. Preliminary cost estimates for construction stand at US$90 to 100 million. Initial production is anticipated in 2000, with full production in the following year.