The program of three holes for circa 850 metres at the copper, gold and cobalt project began this week.
Silver City's shares are trading 12.5% higher intra-day, at $0.036.
It is testing deeper extensions of mineralisation down-dip and down-plunge of previous intersections.
The three holes are likely to take up to four weeks to complete with first results expected in late January to early February.
More extensive follow-up planned
Silver City is planning a subsequent, more extensive follow-up program to test down-plunge extensions.
This will also include preliminary drilling of new geophysical and geochemical targets to the northeast.
The second round program is following up circa 2700 metres of drilling completed in September 2017 that identified a number of high-quality targets.
These holes encountered encouraging copper, gold and cobalt grades hosted in magnetite-rich rocks.
A steep southwest plunge to mineralisation was also confirmed.
Best result was 4 metres at 6.1% copper, 4.23 g/t gold, 13 g/t silver and 220 ppm cobalt from 188 metres.
This included a 1 metre intersection at 11.3% copper, 10.7 g/t gold, 25 g/t silver and 405 ppm cobalt from 191 metres.
Historical intersections assessed
This campaign was designed to assess extensions to a number of high grade intersections drilled by BHP Billiton plc (ASX:BHP) and Shell at the prospect in the late 1980s and early 1990s.
A consulting geologist’s report indicated that the mineralisation was of the iron oxide copper-gold type not previously recognised in the Broken Hill district.
Samples from Silver City’s drilling have been sent for metallurgical assessment.
Initial work is assessing the mineralogy and recoverability of copper, gold and cobalt from a range of mineralisation styles.
Cobalt of particular interest
Of particular interest to the company will be the test results for cobalt.
A number of intersections from the 2700 metre campaign contain elevated cobalt with little or no copper-gold hosted in magnetite-pyrite rich rock.
These include 5.2 metres at 0.14% cobalt from 400 metres, 2 metres at 0.08% cobalt from 48 metres and 0.75 metres at 0.29% cobalt from 333.6 metres.
The magnetite-rich rocks throughout the prospect are elevated in cobalt with surface rock samples returning grades to 0.15% cobalt.