Levon Resources (LVN.TO) has announced new drill results from its Phase 4 drill program on the Aida claim, a part of its Cordero project in Mexico. The company drilled 24 holes for a total of almost 13,100 meters. The results of the most recent 10 holes reveal the mineralization could very well extend at depth as silver was encountered at a depth of up to 1,000 meters. Even though the title of the press release is a bit misleading (as one would think the 36 meters at 255.96g/t was encountered at surface), there are some interesting intercepts. However, if one has a closer look at the drill results, it becomes clear a large part of the silver-equivalent grade is caused by the by-products.
As such, the higher grade intercept of 36 meters AgEq has most of its value coming from zinc and lead, and the main issue with that is the fact the expected recoveries for both base metals will be lower than the recovery of the silver.
On the positive side, now the volcanic feeder system has been discovered with wider and higher grade mineralization, Levon now has a better understanding of the geological model of the Cordero resource and this will have an impact on the total resources, the pit outline and the economics of Cordero. A lot more work needed to be done as the PEA was absolutely unimpressive, and we doubt the project will be built if the silver price doesn’t move up to at least $24/oz.
> Click here to read the press release
Disclosure: The author holds no position in Levon Resources. Please see our disclaimer for current positions.
