Blackthorn Resources high grade silver hits add to case for Perkoa expansion

Thursday, September 22, 2011 by Jeff Coote

The latest drill results provide Blackthorn Resources with confidence as it moves towards a decision on enhancing the dynamics of the Perkoa Project with partner Glencore. Potential exists for expanding the ore throughput at Perkoa to 1Mt per annum.

Blackthorn Resources (ASX: BTR) has intersected high grade silver mineralisation from drilling an additional five holes at the Perkoa Project in Burkina Faso that will contribute to the review of the enhanced business case for the project.

On September 15 Blackthorn received an investment proposal from JV partner Glencore International Plc (LON: GLEN)(50.1%) for an enhanced business case for the Perkoa Project to include the production of silver and lead.

Glencore sees an attractive investment case for expansion at the project and expects a much improved return on investment compared with the zinc base case.

Blackthorn would be encouraged by the assay results as they confirm the extension of silver, lead and zinc mineralisation along strike at Perkoa.

Assay results have been received from an additional five holes, with highlights including:

Hole PS329

- 48 metres at 56.2 grams per tonne (g/t) silver, 1.9% zinc and 0.5% lead from 143 metres, including 20 metres at 74.6g/t silver and 0.73% lead, and 7 metres at 1.6% zinc and 23.7g/t silver.

Hole PS328

- 45.65 metres at 61.4g/t silver, 1.8% zinc and 0.5% lead between from 143.35 metres, including 22.65 metres at 60.4g/t silver and 0.55% lead, and 17 metres at 4.84% zinc and 60.9g/t silver.

Hole PS330

- 6 metres at 35.6g/t silver and 0.8% zinc from 72 metres, including 4.6 metres at 24.2g/t silver and 1.4% zinc from 139, and 3.37 metres at 25.2g/t silver and 1.54% zinc.

Blackthorn is targeting potential open-cut mining, extraction of separate silver and lead concentrate and increased processing plant throughput to one million tonnes per annum at the project.

Scott Lowe, managing director, said outstanding silver grades were intersected in some holes and "these assay results provide a high level of confidence towards enhancing the dynamics of the Perkoa Project and we look forward to discussing the next steps with our partner Glencore.

"There remains some work ahead to review and incorporate these recent assay results into the Perkoa mine model and to generate a robust mining scenario aimed at expanding the ore throughput at Perkoa to 1Mt per annum.”

Drilling was completed in late July 2011. The program comprised 14 cored holes totalling 2,387 metres, which includes two abandoned holes that did not reach target depth.

The company said there appears to be a distinctive geochemical zonation between silver-lead-zinc which tends to display an inverse relationship.

According to Blackthorn "mineralised zones that have higher silver grades tend to have lower zinc grades, and conversely zones of higher zinc grade tends to have lower silver grades."

Blackthorn is reviewing the detailed technical and financial information provided by Glencore including a financial model supporting the investment case.

A final decision to proceed will only be made after final assay results are received from the recent drilling campaign and the review is completed.

If Blackthorn Resources supports the investment proposal, financing will be available for the incremental funding via a project finance loan to be provided by Glencore.

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