Peel Mining shares have jumped as much as 73 per cent following exceptional zinc drill intercepts at a new discovery in NSW.

Peel Mining has timed its discovery of the new Southern Nights prospect perfectly with the zinc price at 10-year highs.

Zinc has risen 32 per cent this year, hitting a high of $US3369.50 per tonne last week on strong global demand and tight supplies.

The metal is used to galvanise steel and is benefiting from Chinese infrastructure development and higher steel prices.

The  Southern Nights site is just south of Peel’s Wagga Tank zinc-lead-silver-gold-copper deposit near Cobar in central NSW.

Mineralisation at the prospect ranks as the best the company has encountered to date, Peel told investors. Subject to tests it could be the best intercept encountered since Peel’s  inception a decade ago.

Three of four holes drilled at the recently identified Southern Nights prospect intersected broad zones of zinc-lead-silver mineralisation. Two of these intersected very- high-grade zinc-lead-silver rich sulphides including massive sulphides.

While assays are pending, preliminary results from a portable XRF instrument include:

  • 21 metres at 24.5 per cent zinc, 8.6 per cent lead and 102 grams per tonne silver from 194 metres; and
  • 70 metres at 4.8 per cent zinc, 1 per cent lead, 18 grams per tonne silver from 128 metres including 8 metres at 14.9 per cent zinc, 2.2 per cent lead, 15 grams per tonne silver from 188 metres.

Results are expected within two weeks. Drilling is continuing at Southern Nights with a minimum 10 further drill holes planned in the near-term to test for strike extensions.

The news sent Peel’s shares into orbit, up as much as 73 per cent to 38c before cooling to 31c in lunchtime Thursday trade.

Peel is worth roughly $52 million and had about $6 million cash at end of June.