Levon Resources (LVN.TO) has announced a resource update on its Cordero silver-lead-zinc project in Mexico. The updates resource estimate (based on 244 holes and almost 120,000 meters of drilling) now contains more than 500 million ounces of silver, 9.5 billion pounds of zinc and more than 5 billion pounds of lead. Unfortunately the average grade is still quite low at less than 18g/t silver and 41g/t Silver-Equivalent and this will make the project uneconomical at the current commodity prices.
There’s a lot of silver, lead and zinc at Cordero, but we’re afraid the project will need to see a substantially higher silver (or by-product) price increase before it will be developed. Investors could see the project as a call option on the silver price, as at a silver price of $30/oz, the economics will substantially improve.
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Disclosure: The author holds no position in Levon Resources. Please see our disclaimer for current positions.
