A high-grade intercept of 124 metres, grading 2.32% copper and 2.28 grams gold per tonne in the Balboa zone at Inmet Mining‘s (IMN-T) Cobre Panama project, makes Balboa a “contender,” writes UBS Investment Research associate analyst Matt Murphy in a research note to clients.
“Mining access to the Balboa zone is likely a considerable time away, and the pit is still not part of the initial mine plan,” Murphy writes. “We have already assumed above reserve grade mining from Balboa, however if further drilling proves Balboa to be a higher-grade ‘feeder’ system to Cobre Panama, it could radically alter the project’s potential.”
Other highlights from the latest 12 holes include 199.5 metres of 0.95% copper and 0.43 gram gold, included in a broader interval of 363.9 metres of 0.65% copper and 0.26 gram gold.
After 19 holes drilled so far, the zone remains open to the west. Inmet’s president and chief executive Jochen Tilk noted that the drill results so far “demonstrate that the geologic system which contains Cobre Panama is capable of producing high-grade mineralization.”
“Cobre Panama already represents a world-class deposit expected to commence construction in less than 12 months,” he continued in his statement. “The addition of the Balboa discovery and potentially other targets endorse our view of the outstanding
potential for Cobre Panama to become one of the world’s largest copper producers.”
Inmet has earmarked $9 million for drilling this year. Four rigs – and an additional two rigs capable of deeper holes – are on the
way, the company says.
The company plans to drill 20,000 metres to test the margins at 200-metre centres, with infill drilling on 100 metre centres. It has also started metallurgical work. The Balboa discovery covers an area of 1,000 metres by 800 metres, and remains open to the west, northwest and southwest.
Colin Burge, Inmet’s senior geologist, notes the drill results from Balboa suggest “potential that we haven’t seen before,” and says that the 124 metres of 2.32% copper found in drill hole 10 could “represent the deeper, higher grade roots of Cobre
Panama.”
“Looking at hole 10, the very high bornite content and veins and disseminations and the lack of iron pyrite suggest that we may be starting to find the core of a quality system,” he outlined in a press release announcing the results on May 31.
Inmet expects the Cobre Panama open pit to produce 289,000 tonnes copper and 108,000 oz. gold per year during the first 16 years of a 30-year mine life. Cobre Panama contains measured and indicated resources of 3.27 billion tonnes grading 0.36% copper, 0.06 gram gold and 0.007% molybdenum.
Shares of Inmet surged 4% or $2.66 to close at $69.50, with 1.1 million shares trading hands following news of the latest assay results.
Inmet closed at $65.92 per share on June 20. Murphy of UBS Research has a 12-month target price on the stock of $75.
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