Filo Mining rises on long copper intercept at its Filo del Sol project in South America  

Shares of Filo Mining (TSX: FIL) reached an all-time high as the company reported its best hole yet in terms of copper-equivalent and intercept length, drilled at its Filo del Sol project, which straddles the Argentina-Chile border.  

Highlights from the latest drill results from its ongoing program included drill hole FSDH055C from the Breccia 41 zone, which cut 1,337.5 metres grading 0.66% copper, 0.54 gram gold per tonne and 31.5 grams silver starting from 150 metres; and 8.6 metres grading 7.08% copper, 8.16 grams gold and 820.4 grams silver starting from 742 metres.   

Jamie Beck, the company’s CEO said in a press release that hole 55C represents “one of the thickest, highest-grade intervals drilled through the Aurora Zone and confirms the continuity of the bonanza-grade Breccia 41 mineralization between holes 41 and 54 to the south, and hole 57 to the north.”   

“At almost 1.5 km deep, and still strongly mineralized, hole 55C is a great reminder of not only the size and scale of the system, but also how much more there is to discover at Filo,” he added.  

The Filo del Sol project is comprised of two adjacent land holdings: the Filo del Sol property in San Juan Province, Argentina, and the Tamberias property in Region III, Chile. The project area is covered under the Mining Integration and Complementation Treaty between Chile and Argentina, which provides the framework for the development of cross-border mining projects.   

Based on a 2019 prefeasibility study, which used prices of US$3 per lb. copper, US$1,300 per oz. gold, and US$20 per oz. silver, it has an estimated after-tax value of US$1.3 billion at an 8% discount rate, with an internal rate of return of 23%.   

The asset is expected to produce an annual average of 67,000 tonnes of copper, 159,000 oz. gold and 8.7 million oz. silver over a mine life of 14 years. The study pegged the project’s initial capital cost at US$1.27 billion.   

Wide-spaced drilling over the past two years led to the discovery of the high-grade Aurora zone. A section within that zone, named Breccia 41, was found to have “distinguishably elevated grades” last year after its discovery hole FSDH041 returned 163 metres at 5.43% copper equivalent (2.31% copper, 2.07 grams gold per tonne, and 183 grams silver) from a depth of 780 metres.   

The ongoing drilling program includes seven diamond drill rigs and a reverse-circulation rig and has been designed to explore the area around the FSDH041 drill hole.   

The company expects to continue drilling throughout the year. 

In February, BHP (NYSE: BHP; LSE: BHP; ASX: BHP) invested $100 million in Filo Mining and in the process ended up owning 5% of the company. Lundin Family Trusts is Filo’s majority owner.   

Scotiabank analyst Eric Winmill views Filo’  latest update as positive as the hole “encountered long and high-grade mineralized intervals including the highest grade-thickness at the project encountered to date,” he wrote in a research note to clients on May 24.  

“Filo continues to highlight success with the drill bit, especially with its long intersections, and as it better defines the structure, including the higher-grade section,” BMO analyst Rene Cartier wrote in a research note to clients on May 23. “Our target price (for the company) increases to $30.00 (from $28.00).”   

At press time in Toronto, Filo Mining reached a day high of $27.37 beating its previous 52-week high of $24.81, before closing at $26.31 in the afternoon, up 12 % or $2.81 for the day. The company has 121.4 million common shares outstanding.