A major upgrade of the already rich Bowdens silver, lead, zinc and gold prospect in NSW now looks on the cards after Silver Mines Ltd
(ASX:SVL) revealed a significant new discovery in an ASX filing on Monday.
The Bowdens prospect is already the subject of a plan by Silver Mines to spend more than $250 million on a two million tonnes per year open cut operation near Mudgee, in central NSW.
The company says “Bowdens Silver is the largest undeveloped silver deposit in Australia with substantial resources and a considerable body of high-quality technical work already completed. The project boasts outstanding logistics for future mine development.”
The open cut project is based on a maiden ore reserve of 29.9 million tonnes at 69.0 grams of silver to the tonne, 0.44% zinc and 0.32% lead. Silver mines aid a feasibility study has demonstrated that the project will produce an average of 3.4 million ounces of silver a year, together with approximately 6,900 tonnes of zinc and 5,100 tonnes of lead a year.
“Due to higher silver grades in the early stages of mining, average production during the first three years of operation will be approximately 5.4 million ounces of silver per annum and 6,000 tonnes of zinc per annum and 5,200 tonnes of lead per annum,” The company says.
Silver Mines says the open cut project mineral resource, 275 million ounces silver equivalent (including 97 million ounces silver equivalent Ore Reserve). That silver equivalent reserve is made up of silver, lead, zinc and gold.
The open cut project is now with the NSW government for approval.
But now Monday’s statement, Silver Mines revealed that a two-year drilling campaign at Bowdens on potential underground prospects, had proved up what could be a significant extension of the mine, or a separate mine all together.
The new areas lie directly under the open cut resource, according to the statement from Silver Mines. The measured, indicated and inferred reserves contain a further 49 million ounces of silver equivalent, at a cut-off grade of 150 grams to the tonne silver equivalent.
The underground has reserves (measured, indicated and inferred) of 6.37 million tonnes. The average grade is 209 ounces to the tonne silver equivalent, which is made up of 63 grams to the tonne silver, 1.84% zinc, 0.97% lead and 0.29 grams to the tonne gold.
Silver Mines CEO Anthony McClure said in Monday’s ASX statement, “Since the discovery of the three zones directly under the planned open pit, the drill-out has been hugely successful.”
“The potential for a contiguous underground operation, in addition to the planned open pit operation, has firmed significantly as we further prove this large mineral system. We will now move to the completion of the underground mining scoping study.”
Mr McClure added, “Although Mineral Resources at Bowdens now totals over 315 million ounces of silver equivalent, both the open pit and underground resource areas remain open. In addition, it is very encouraging to now see a higher tenor of gold in the system as we move south and east.”
Silver Mines will now run a scoping study on the underground discoveries (which remain open with potential for more gold to be found as well as silver in several areas to the south and west of the three new zones of interest).
“The Scoping Study will consider potential underground mining scenarios beneath the planned open-pit development, currently in the final stages of the approval process (with the NSW Government).
“Although yet to be determined, a concept may be for a planned underground development to commence operations in around years 3-4 of the open-pit development to supplement plant feed with high-grade material at a rate of up to 500,000 tonnes per year.
“An alternative would be for an underground development at the end of the open-cut mine life.”
The shares rose 3% to 17 cents.
