Puma Exploration’s Hach Lens boasts 1 million oz. silver

With real silver prices at their highest in twenty years and prices for zinc, lead and gold at record highs, Puma Exploration (PUM-V) could be forgiven for feeling a little undervalued at about 40 a share.

The Canadian junior says back-of-the-envelope calculations on the roughly US$47 million of value it has in metals in the ground should prompt investors to take a second look at the company.

Today Puma released a National Instrument 43-101 resource estimate on the central portion of its Hach massive sulphide lens on the northern edge of the Bathurst mining camp of New Brunswick.

It shows an indicated resource of 364,000 tonnes containing more than 1 million oz. silver, 11 million lbs. zinc, 5 million lbs. lead and 6,200 oz. gold in the centre of the Hach lens at a cut-off grade of 1% zinc equivalent.

The high-grade portion of the deposit contains an indicated resource of 110,000 tonnes grading 217 grams silver per tonne, 2.5% zinc, 1.5% lead and 1.1 grams gold per tonne at a cut-off grade of 3% zinc equivalent.

“We crunched the numbers this morning and with over 1 million oz. of silver at about $19 per oz. that values us at about US$21 million just for the silver alone,” says Christian Guilbaud, a company spokesman.

Guilbaud notes that when you then factor in values for zinc, lead and gold, those numbers lift the company’s value in the ground to about US$47 billion.

“We’re talking about a recovery rate of 84% and that gives us a value of about US$40 million gross coming out of the mill, which values us at $1 per share.”

Currently Puma is trading at less than half that amount and has a 52-week trading range of 22 to 59. It has 39.9 million shares outstanding.

Given the project will most likely be an open-pit mining operation, “it wouldn’t be very costly,” he says. “We think we can get pretty decent profit.”

The resource estimate only covers a 100 metre by 50 metre segment of the central portion of the Hach lens (earlier drilling had confirmed mineralization in extension zones on either side of the Hach lens.)

Puma is moving ahead with a prefeasibility study, which is due out in the next several months, Guilbaud says.

The NI 43-101 resource estimate was based on 33 diamond drill holes totaling 5,849 samples and 21 channels totaling 569 samples.

The Nicholas Denys property is close to the infrastructure of the Cariboo, Restigouche, and Brunswick No. 12 Mines, as well as a lead-silver-gold smelter in Belledune.