Peel Mining (ASX: PEX) has continued its run of good fortune after resource drilling at its wholly-owned Wagga Tank project in New South Wales unearthed a “stunning” and “awe-inspiring” thick zinc polymetallic intersection.
The intersection was unveiled at the Southern Nights prospect and returned 18.2m at 40.3% zinc, 15.7% lead, 0.97% copper, 356 grams per tonne silver and 2.77g/t gold from 182m.
According to Peel, the intersection is the highest-grade zinc-rich the company has revealed since it was incorporated.
The company claims the Southern Nights prospect is emerging as one of Australia’s “most significant zinc polymetallic discoveries” in recent years.
“The ultra-high-grade massive sulphides returned from WRTCDD150 are awe-inspiring, highlighting the prize that the Cobar Basin can deliver, and reaffirming the company’s recent decision to acquire the royalty associated with the project,” Peel managing director Rob Tyson said.
Peel is carrying out a 20,000m reverse circulation and diamond drilling campaign across the project and hopes to publish a maiden JORC resource before the end of June next year.
The program is testing extensions to the mineralisation which remains open along strike and at depth.
“With funding secured and 100% unfettered ownership, Peel can expeditiously drill test this area to better determine its geometry, scale and evident economic potential,” Mr Tyson added.
Southern Nights prospect at Wagga Tank
Wagga Tank is about 130km south of Cobar in NSW and Peel began drilling the project in late 2016.
Previous drilling at the Southern Nights has returned numerous high-grade intersections including massively thick 142.1m intersection grading 7.39% zinc, 3.76% lead, 0.15% copper, 101g/t silver and 0.54g/t gold.
Other notable drill results from the project were 26m at 25.45% zinc, 9.92% lead, 215g/t silver and 1.19g/t gold, and 38m at 7.97% zinc, 2.44% lead, 0.5% copper, 54g/t silver and 0.63g/t gold.
Demand for zinc has continued to outstrip supply during the first nine months of 2018, with the market experiencing a 305,000t deficit during the period.
The market deficit is despite a 1.2% growth in production.
According to the International Lead and Zinc Study Group, world demand for refined zinc metal will rise by 0.4% to 13.74Mt in 2018 and a further 1.1% to 13.88Mt in 2019.
The group anticipates global demand will continue to outpace supply in 2018, with a 72,000t deficit forecast for 2019.
Although far from its high of more than US$3,500 per tonne in the latter half of last year, the zinc price is currently sitting above US$2,550/t and remains higher than its US$1,500/t low in 2015.
The market reacted positively to the news, with Peel’s share price reaching $0.415 by midday – up more than 33%.