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North River Resources spikes 12 per cent as market applauds latest Namib data

Published: 20:51 30 Aug 2012 AEST

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Shares in North River Resources (LON:NRRP) rose 12 per cent in early trade after it unveiled what it described as “encouraging” channel sampling results from its Namib lead-zinc project.

The group is currently assessing the potential of the former underground operation, which was mined from 1965 to 1992.

Samples returned zinc grades of 17.7, 18.9 and 20 per cent; lead grades of up to 0.7 per cent were detected as was silver (up to 77 parts per million). However there was an intersection that graded 226 parts silver as well as 20.5 per cent zinc, 0.1 per cent lead.

“Impressive grades of the channelled areas and a potential continuation of the mineralisation at deeper levels give management confidence that mining of the deposit was previously abandoned due to reasons other than depletion of the existing resource,” said City broker Fairfax in note to clients.

Earlier North River also revealed increased vein intensity and density the 7½ Level and 8 Level underground in the south section of the mine.

The company reckons there is potential for “significant semi-massive to massive zinc-lead mineralisation” below the previously mined areas.

Separately, it said the completion of a comprehensive structural mapping programme of surface and dewatered underground areas of mine will “facilitate an updated mineralisation model”.

Final tests of the preliminary metallurgical test work programme are now being completed to be incorporated into a conceptual engineering study scheduled for next month. 

The company will also to release the results of an airborne geophysical study on the area.

Managing director David Steinepreis said: "A great deal has been achieved by our exploration team since the mine was dewatered in March 2012, and our development plans continue at pace as we focus on the completion of our conceptual engineering study.  

“This study will be a key milestone in the development of the project, and will serve as a tool which will be used to determine the optimum path to recommencing production at Namib lead-zinc mine.  

“We remain positive about the wider exploration potential of the Namib Project, and are anticipating the receipt of our airborne geophysical survey analysis, which will further facilitate the development of an exploration campaign on the Namib Project licence area."

At 11.25 am, the shares were changing hands for 0.96 pence, representing a rise of 0.11 pence.

Ocean Equities in a research note said dewatering the mine down to Level 8 has given North River the opportunity to more aggressively explore the deeper and higher grade areas of the mine. 

The discovery of the increasing density of the high grade shoots with depth is not surprising, the broker added, particularly given earlier interpretations of the ore shoot distribution.

And it is a “reasonable assumption” that there is good potential for a more substantial high grade mineralised zone under the previously mined areas, Ocean went on to say.

“We eagerly await the results for the airborne survey,” it added. 

“Earlier mining in this area was conducted on a relatively ad hoc basis, with miners simply following the high grade ore shoots. 

“There is good potential for near surface high grade mineralised zones on North River’s licence area that could only be revealed through an airborne survey.”

Completing a conceptual technical study on the Namib mine will be an important step for the company as it will set a road map for North River’s re-development of the mine, Ocean reckons. 

“Given the high grade nature of the ore at Namib, combined with the existing infrastructure and the favourable metallurgical properties already demonstrated from first pass ore testing, there is good potential for North River to design a small scale but economically viable mine project at Namib,” it concluded.

 

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