With an updated resource for its past-producing zinc-silver-gold-copper South Mountain project expected in April, BeMetals (TSXV: BMET) has also started a preliminary economic assessment (PEA), which is scheduled for completion by September.
“These studies are part of the critical path towards advancing South Mountain to a potential mine construction decision stage given continued positive results,” John Wilton, BeMetals’ president and CEO, said in a release.
Alongside these project updates, the company has also released assay results for one drillhole that conforms “significant” extensions of mineralization in the DMEA zone, one of two main zones at South Mountain, located in Idaho.
The intercept returned four mineralized intervals, such as 30.9 metres of 4.66% zinc, 103.9 g/t silver; 1.59 g/t gold; 0.39% lead and 0.17% copper; and 4.4 metres of 7.11% zinc, 108.7 g/t silver, 0.14 g/t gold, 0.22% lead and 0.68% copper. The drillhole appears to suggest good continuity of mineralization intersected in 2019 and supports potential for deeper extensions to these zones.
The resource update will incorporate drilling completed in 2019 and 2020; the release notes that BeMetals’ 2019 and 2020 drilling campaigns confirmed the high-grade nature of the polymetallic mineralization at the site and extended the DMEA and Texas zones.
A 2019 resource for South Mountain defined 154,100 tonnes (169,900 tons) grading 17.66% zinc-equivalent (10.66% zinc, 149 g/t silver, 2.09 g/t gold, 0.8% lead and 0.69% copper) and 329,500 tonnes (363,200 tons) at 16.63% zinc-equivalent (9.7% zinc, 174 g/t silver, 1.49 g/t gold, 1.2% lead and 0.7% copper).
Mine Technical Services has been tasked with delivering the PEA. A metallurgical test work program is under way on samples from DMEA and Texas to refined a 2014 process study and provide input parameters for the PEA.
South Mountain is in southwestern Idaho, approximately 110 km from Boise. The project was mined between the late nineteenth century and the late 1960s; smelter records suggest output of 53,642 tons grading 14.5% zinc, 363.42 g/t silver, 1.98 g/t gold, 2.4% lead and 1.4% copper.
BeMetals entered into an option agreement with Thunder Mountain Gold (TSXV: THM) in 2019, to acquire up to a 100% interest in the project. To complete the acquisition, BeMetals was required to make an initial US$100,000 payment, needed to purchase 2.5 million shares of Thunder Mountain, and issue 10 million shares to the vendor. Four US$250,000 cash payments are due on the 6, 12, 18 and 24-month anniversary dates. BeMetals would also need to complete a PEA for South Mountain and make a final value payment of the greater of US$10 million or 20% of the after-tax net present property value derived in the PEA. The final payment would be reduced by US$850,000 to account for previous payments and capped at 50% of BeMetals’ market capitalization.
For more information, visit www.BeMetalsCorp.com.