Kristie Batten: West Coast rides high on early silver results
One of Australia's top mining journalists, Kristie Batten, writes for Stockhead every week in her regular column placing a watchful eye on the movers and shakers of the small cap resources scene.
New-look West Coast Silver (ASX:WCE) is perfectly placed to capitalise on the rising silver price.
The company formerly known as Errawarra Resources announced the acquisition of the Elizabeth Hill silver project in the Pilbara in late March.
Elizabeth Hill produced 1.2 million ounces of silver from just 16,000 tonnes of ore grading 2194 grams per tonne silver in 2000 but closed due to a low silver price of just US$5 an ounce.
Spot silver hit a 13-year high of more than US$37/oz last week.
'Silver, in our opinion, is certainly on the rise,' West Coast executive chairman Bruce Garlick told Stockhead.
'There are not many pure silver mines in the world. This is one of them.'
West Coast has a couple of important head starts at Elizabeth Creek. The project is on a granted mining lease, allowing the company to get into production faster, and it already knows there is silver mineralisation present.
The project had a historical resource and West Coast's aim is to quickly define an inferred JORC-compliant estimate.
'We've got that on the table, hopefully, out of this drilling campaign,' Garlick said.
'If we don't do it this campaign, we'll certainly do it on the next one, so it's a great opportunity, in our opinion, and that's just on the Elizabeth Hill mining lease.'
A 1500m diamond drilling started late last month and two weeks ago, West Coast reported the results from the first two holes.
Assays included 5m at 313g/t, or 10 ounces per tonne, silver from 20m; 5m at 2822g/t, or 90.7oz/t, silver from 26m, including 2m at 6951g/t, or 223.5oz/t, silver; and 12m at 153g/t, or 4.9oz/t, silver from surface, including 1m at 973g/t, or 31.3oz/t, silver.
Anomalous lead, zinc and copper values were also returned, with further analysis to be carried out during the program to quantify the presence of these elements and their impact on project economics.
Further assay results are expected in 4-6 weeks.
Area consolidated
West Coast has become the first explorer to consolidate Elizabeth Hill and the surrounding 180 square kilometre land package.
'Munni Munni is a major fault that runs through that area, and when you get faults, invariably, you'll get various mineral deposits escaping from the core in the earth,' Garlick said.
Garlick pointed to the minerals prospectivity of the whole area.
The Whundo copper mine is only 5km from Elizabeth Hill, while the Radio nickel-copper deposit is also nearby, which also has a plant.
West Coast has engaged ERM Consultants to assist with geological modelling.
Garlick said ERM's assessment was that it was unlikely that Elizabeth Hill was a one-off deposit.
'We've got really three pillars as I see it. We've got the silver mine, or potential silver production, we've then got the near mine. And then we've got the regional exploration,' he said.
'ERM have done some good work in terms of project targets on the regional basis, and also near mine, and we're very encouraged by that, so this is not just a one-off silver deposit as far as we're concerned.'
The company has completed a regional soil sampling program, with samples being sent to the lab.
'What we're hoping is that there's other silver pods around in that area and it's just a question of uncovering them and being persistent – that's the key,' Garlick said.
'There's a fair amount on the go at the moment, and we're just knocking things off systematically.'
West Coast is well funded to carry out its exploration plans, having raised $3 million in a placement priced at 2.7c when the acquisition was announced.
Shares have more than tripled since then, closing at 8.6c on Friday.
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