Colony Pacific gets approvals for underground work

The $10 million(US) program is to include a 2,400-ft shaft, 3,500 ft of lateral development work, and 100,000 ft of underground drilling.

The main objective of the program is to increase and better define reserves, obtain a bulk sample for metallurgical testing, and assess possible underground mining methods.

Drill-indicated and inferred reserves on the Blue Moon property are estimated to be 3.8 million tons grading 7.87% zinc, 1.09% copper, 0.46% lead, 2.44 oz silver and 0.051 oz. The deposit remains open at depth.

The company indicated that the deposit’s metallurgy appears to be relatively simple. A mill would likely use conventional flotation techniques. This would weigh in Colony’s favor if production permitting is eventually sought.

One last obstacle to the 18-month underground program is that of obtaining financing. With the stock languishing close to its 12-month low, a 100% equity financing is prohibitive while debt financing of a development project is not likely. The company is reviewing alternatives to fund the work.

Major shareholders of Colony Pacific’s 10.6 million common shares are Westmin Resources (TSE) with 32%, and Imperial Metals (TSE) holding 22%. The company has about $1 million in working capital and no debt.

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