BeMetals (BMET.V) released an updated resource estimate for its South Mountain polymetallic project in Idaho earlier this month. The measured and indicated resources increased by almost 22% to 188,000 tonnes while the inferred resource more than doubled to just over 750,000 tonnes. The grades are actually pretty decent, as you can see in the table below. On a zinc-equivalent basis, the M&I resource comes in at 20.36% ZnEq while the bigger inferred resource has an average grade of 18.10% ZnEq.
The main problem at South Mountain will be to drill out a resource that would be large enough to warrant a development scenario. Even at a throughput of just 400 tonnes per day, the combination of M&I&I resources (on a pro-forma basis, you obviously aren’t allowed to throw all different resource categories onto one big pile) would barely be sufficient to keep the production going for six consecutive years.
While the resource increase is quite good considering only 5,000 meters have been drilled, one could wonder if BeMetals isn’t jumping the gun a little bit by immediately moving forward with a PEA, which is expected to be completed in just a few months from now. The grade is excellent, the size is only so-so, but who knows, the PEA may actually be a positive surprise.
Disclosure: The author has a small long position in BeMetals. Please read our disclaimer.
