Special Report: PNX Metals (ASX: PNX) has given the market a timely reminder of the quality of its Hayes Creek zinc-gold-silver project in the Northern Territory with the release of exceptional drilling results from the Iron Blow deposit.

The company recently undertook a three-hole, 650-metre diamond drilling program at Iron Blow to obtain samples for metallurgical testwork as part of the Hayes Creek definitive feasibility study (DFS) and to provide geotechnical data to assist in mine planning.

Assays results reported to the ASX on Thursday included 85.2m at 11.9% zinc, 4.2 grams per tonne (g/t) gold, 309 g/t silver, 1.9% lead and 0.5% copper from a depth of 116m and 48.1m at 5.7% zinc, 2.5 g/t Au and 91 g/t silver from 230.3m.

In a note to clients, Hartleys analyst Paul Howard said the true width of the Iron Blow mineralisation was not as great as indicated by the drilling, but the results “demonstrated the high-grade nature of the deposit”.

PNX also revealed that one of the holes had intersected the western lode at Iron Blow higher up-dip than previously tested, returning an interval of 21.42m at 1.98 g/t gold and 161 g/t silver from 2.3m.

The company said this new near-surface zone of oxide mineralisation warranted follow-up and could lead to a revised development strategy at Hayes Creek.

Investors pounced on the results immediately, sending PNX shares up 180% – from 0.5c to 1.4c – in early trade on Thursday before they settled back to finish at 0.8c.

Drilling in progress at PNX’s Hayes Creek zinc-gold-silver project in the Northern Territory. (Supplied)

Robust economics could be improved on

Iron Blow is one of two massive sulphide deposits that make up the Hayes Creek project, the other being Mt Bonnie.

Together, they underpinned a pre-feasibility study (PFS) completed in 2017 that had the project producing 119,000 tonnes of zinc, 95,000 ounces of gold, 9.3 million ounces of silver and 21,000 tonnes of copper-lead over an initial 6.5-year mine life.

The scenario envisaged in the PFS was that Mt Bonnie, with its resource at surface would be mined first as an open pit and would effectively fund the development of the underground Iron Blow mine.

Should the near-surface gold-silver mineralisation at Iron Blow develop into something more substantial however, a different plan could emerge.

“We are encouraged to see high-grade gold contained within predominantly oxide mineralisation at surface and the thick, massive sulphide intervals intersected by drilling are consistent with the geological model, adding confidence to the Mineral Resource,” PNX Managing Director James Fox said.

The company has also had exploration success at the nearby Fountain Head gold prospect, and is close to announcing a maiden resource for the deposit that could allow for its incorporation into the Hayes Creek DFS.

PNX is fully funded to complete the Hayes Creek DFS, having raised $5.48 million through a rights issue in May.

The company also updated the market around the Project Environmental approvals, saying that it has been informed that the project does not require further assessment and approval under the Australian government Environment Protection and Biodiversity Conservation Act 1999.

This means that environmental approvals will be handled solely by the NT Environmental Protection Authority.



This story was developed in collaboration with PNX Metals, a Stockhead advertiser at the time of publishing.
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