Special Report: The untapped exploration potential of PNX Metals’ large Northern Territory tenement holding has been highlighted by a respected mining analyst as the company seeks to enhance the economics of its flagship Hayes Creek zinc polymetallic project.

The company (ASX:PNX) completed a preliminary feasibility study on Hayes Creek, 170km south of Darwin in the Pine Creek region, in July last year, confirming it to be a robust project generating $266 million in pre-tax net cashflow over an initial 6.5-year period.

But the company is eager to extend the life of the project out beyond 10 years and bolster its financial metrics.

To this end, it has been busily drilling a number of promising targets within trucking distance of Hayes Creek in an effort to prove up additional sources of feed.

In August, Hartleys analyst Paul Howard visited Hayes Creek and some of the exploration sites, coming away enthused about the region’s gold endowment and the likelihood of exploration success.

“While the Hayes Creek plant will produce a polymetallic concentrate that includes sulphide gold, there are numerous free gold mineral deposits and occurrences within the broader area including Cosmo-Howley, Woolwonga, Brocks Creek, Fountain head/Tally-Ho and Goodall with around two million ounces produced historically,” he wrote in a recent note to clients.

“PNX is very excited about the gold opportunities around the broader Fountain Head and Tally Ho area where it acquired tenure in a land swap with Canadian company Kirkland Lake in early 2018.

“From our field inspections, it is very apparent just how under-explored the region is.”

The Banner prospect, which lies about 1.5km north-east of the historic Fountain Head/Tally Ho pits, is where PNX drilled an impressive 6 metres at 39.5 grams per tonne (g/t) gold from a depth of 54 metres in August.

The company also drilled beneath the historic pits and looks to have extended the mineralisation, returning results including 16 metres at 1.4 g/t gold from surface at Fountain Head and 2 metres at 4 g/t gold from 21 metres and 5 metres at 4 g/t gold from 107 metres at Tally Ho.

“We eagerly await the results of ongoing drilling around Fountain Head/Tally Ho, as well as Moline, and have been encouraged by the prospectivity, both regionally and within PNX’s ground,” Howard said.

As a result of the site visit, Howard increased his valuation on the company’s exploration portfolio and added a “discovery scenario” to his 12-month price target, which is 2.2c. He has a “speculative buy” rating on the stock.


This special report is brought to you by PNX Metals.

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