Vancouver – A resource update on Western Silver’s (WTC-T) Penasco silver deposit in Zacatecas state Mexico, has increased the indicated sulphide resource by some 30%, largely by bumping up the inferred resource to the indicated category.
The Penasco deposit is located on the company’s Penasquito project, where a feasibility study has been under way since December. The study, scheduled for completion mid-year, will incorporate the oxide and sulphide zones from Chile Colorado and Penasco deposits.
Consulting firm, M3 Engineering & Technology estimates that Penasco, one of three deposits delineated on the property, has an indicated sulphide resource of 161 million tonnes grading 29 grams silver and 0.57 gram gold per tonne, 0.33% lead and 0.72% zinc at a cut-off of US$3.75 net smelter return (NSR) per tonne.
The indicated sulphide resource contains 150.2 million oz. silver, 2.97 million oz. gold, 1,065 million lbs. lead and 2,324 million lbs. zinc.
A further 91 million tonnes are inferred, with average grades of 26.36 grams silver, 0.51 grams gold, 0.25% lead and 0.64% zinc.
Penasco’s overlying oxide resource contains 21.9 million tonnes indicated, and 5.3 million tonnes inferred resources at a cut-off grade of US$2.75 NSR per tonne. A mixture of sulphide and oxide material within the oxides is estimated to have about half the recovery of the fully-oxidized.
The updated resource includes Marlow Mining Engineering’s initial resource calculation for Penasco in October 2004. M3’s NSR figures are based on metal prices of US$5.50 for silver, US$350 per oz. gold and 30 lead and 45 zinc. Around 85% of the resource falls into a theoretical open pit shell at recent metal prices.
The Penasquito project’s total measured and indicated sulphide resource now stands at 309.8 million tonnes containing 314.3 millon oz. silver. 4.59 million oz. gold 2,101 million pounds of lead and 5306 million pounds of zinc in the Chile Colorado and Penasco deposits situated about 1.5 km apart.
M3 Engineering’s prefeasibility study at Chile Colorado in April 2004, concluded that the deposit could be mined economically with an after-tax internal rate of return of 15.3%.
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