Blackthorn Resources: Perkoa first ore and expansion decision due within weeks

Wednesday, November 16, 2011 by Angela Kean

With first ore from the Perkoa Project just weeks away the enhanced business case has the potential to boost the project even further. A decision will be made on the expansion in early December.

Blackthorn Resources (ASX: BTR) and joint venture partner Glencore International (LON: GLEN) continue to add value to the Perkoa Zinc Project in Burkina Faso, this time through a proposed expansion of operations which is on target for mid-2012.

Blackthorn is continuing to receive and assess information in relation to the investment case proposed by Glencore in September 2011 to enhance operations at Perkoa.

The enhanced business case proposes an increase in mine capacity and expansion of operations to include open-cut mining to extract and process silver, lead and zinc ore adjacent to the current underground mine development.

Managing director Scott Lowe said all of the information received to date supports a decision to enhance the Perkoa Project.

“We are very excited by the potential for adding value to the current project through the changes that Glencore has proposed,” he said.

Blackthorn was previously expecting to make a decision regarding the company’s support for the improvements and finance of its share of incremental capital by mid-November, but there has been some delay in information being received.

The company now expects a final decision to be made early December, however the target date for the commissioning of the Perkoa Project still remains on track for mid-2012.

“The delay in finalising Blackthorn’s assessment will not delay the commissioning of the zinc project or the expanded operation, as Glencore is proceeding with essential work for the improvements. This is a very positive indication,” Lowe said.

“Of course we are looking forward to the production of first ore from Perkoa in coming weeks which will represent a major milestone in the history of the project.”

First ore

First development ore from a cross-cut driven off the main decline is expected by the first week of December.

The decline has now advanced a total of 532 metres and the weekly development rate is now meeting or exceeding budget. Two drilling jumbos are in place and underground work is proceeding.

Last month Blackthorn confirmed high grade silver and lead mineralisation along strike and adjacent to the existing ore body which adds significant upside to the project.

Importantly, the presence of high-grade silver and base metal mineralisation is consistent with the assumptions used in the enhanced business case for expanding the Perkoa mine and increasing production throughput to 1 million tonnes annually.

The Blackthorn and Glencore joint venture is a high grade, underground zinc mine that is currently under construction and is being managed and operated by Glencore which has a 50.1% interest, with Blackthorn’s interest 39.9%.

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