Alicanto’s maiden Sala resource is a signpost to more zinc-silver

Alicanto has released a much-anticipated maiden resource of 311,000t zinc, 15Moz silver and 44,000t lead that ranks its Sala project as Sweden’s largest active undeveloped zinc-silver deposit.

That this was achieved just a little over 12 months from its taking ownership is a strong validation of the company’s capabilities as well as the strength of the project’s zinc dominant (69%) mineralisation, which is highlighted by very high grade and wide intersections.

Another major takeaway from the maiden resource and one that bodes well for Alicanto Mineral’s (ASX:AQI) future mining plans is the contiguous nature of the higher grade portion of the Sala resource when a 4% zinc equivalent cut-off is applied (rather than the featured 2.5%ZnEQ).

This higher cut-off results in a 4.5Mt resource grading 4.5% zinc, 58.4 grams per tonne (g/t) silver and 0.5% lead for contained metals of 201,000t zinc, 8.5Moz silver and 23,500t lead, most of which is contained within a coherent near surface high-grade breccia zone that makes for an attractive first target for mining.

The polymetallic skarn that hosts the Sala system also has geological similarities with the major producing underground mines in the area such as Boliden’s Garpenberg, which has a cut-off of just US$50 ($74.12) per tonne.

“This is an outstanding maiden Resource which demonstrates the growing scale and quality of the Sala project,” managing director Peter George said.

“The fact that we established such a substantial Resource in just over a year of taking ownership also highlights the strength of the mineralisation and the immense ongoing growth potential.

“We believe there is significant inventory growth to come, with the mineralisation open in every direction and numerous highly prospective targets to drill.

“We will maintain the pace of drilling to unlock the full value of this asset, creating significant value for Alicanto shareholders in the process.”

Feeding the hunger for zinc

Alicanto’s maiden inferred resource estimate for Sala couldn’t be better timed as sanctions on Russian zinc supply have put even more pressure on Sweden – already Europe’s largest producer of the industrial and battery metal – to increase supplies.

This is likely to prove challenging as existing producing mines such as Garpenberg and Zinkgruvan are already getting deeper amidst declining asset bases with no other new discoveries.

Taken together, it is likely that any future Sala development plans will receive a favourable hearing from the Swedish government, especially since the country is already leading the transition to net zero in the region with 98% of its electricity coming from renewable sources.

Incidentally, this also makes zinc produced in Sweden some of the greenest (if not the greenest) around, which adds further to its value especially given its role in enabling green technologies such as solar and wind along with growing interest from the battery sector.

Growth potential

Sala is an intrusion-related zinc-silver-lead skarn deposit located within the Bergslagen volcanic region, which also hosts Garpenberg and Zinkgruvan.

The inferred resource covers the Prince Lode immediately south of the historical Sala mine and the continuation of the silver dominated Sala mine.

While the current resource calculated at the 2.5% ZnEq cut-off of 9.7Mt at 3.2% zinc, 47.3g/t silver and 0.5% lead represents a solid start, there is still plenty of room to grow with the resource of 15.5Mt at 2.5% zinc, 38.8g/t silver and 0.4% lead at the 1.5% ZnEq cut-off indicates.

Not only does the mineralisation remain open in all directions, but recent drilling has identified a new structure parallel to Sala which highlights the potential for Alicanto to find repeats of Sala-style mineralisation.

That this new structure hosts high-grade sulphide mineralisation just 120m from surface just adds to its attractiveness.

This article was developed in collaboration with Alicanto Minerals, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.