An updated resource estimate for the HNK gold project in southern China failed to impress the markets, with shares of New Pacific Metals (NUX-V, NUXFF-O) dropping a penny or 1.5% to close at 67 cents apiece.
At a cut-off grade of 1 gram gold per tonne, the HNK gold project has an inferred resource of 778,898 tonnes grading 6.5 grams gold per tonne for contained gold of 162,396 oz.
HNK is 180 km northwest of Guangzhou, the capital city of Guangdong province, which lies adjacent to Hong Kong.
Eighteen gold-bearing quartz veins have been identified on the property, but it is the northeast-southwest trending V9 shear vein that is of primary interest to the company. That vein has been traced 820 metres along strike and is open to the southwest and at depth. The vein has been explored to a depth of nearly 400 metres and has a true thickness of up to 3.4 metres.
Mineralization includes lead-zinc sulphides and pyrite with variable amounts of gold and silver. A preliminary metallurgical test completed in 2009 indicated that flotation would be the most appropriate process for this type of mineralization and metal recoveries have come in at 92% for gold, 91% for silver, 96% for lead, and 92% for zinc.
The permit area is in the centre of the Dayao mountain range, southwest of the Southern China craton, where the Southern China craton is cut into the mountain ranges and basins by parallel deep northeastern-trending structures that extend several hundreds of kilometres, the company says.
Cambrian and Precambrian metasediments are dominant rock sequences in the mountain ranges, with Jurassic and Cretaceous volcanics the dominant rock units in the basins.
Gold and silver mineralization in these areas mainly occurs in the mountain ranges, which are intruded by Mesozoic and Cenozoic granite plutons and porphyries.
Since 2007 the company has completed over 35.6 sq. km of soil geochemistry and 9.7 sq. km of induced-polarization surveys.
Exploration work has consisted of 14,900 metres of diamond drilling in 51 holes and the excavation of 3.5 km of underground workings.
The Vancouver-based junior’s largest shareholder is Silvercorp Metals (SVM-T, SVM-N) with a 23.2% stake.
New Pacific has traded in a range of 61 cents to $1.10 over the last year and has 30.2 million shares outstanding.
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