Gold and tin explorer Thomson Resources (ASX: TMZ) is joining the growing primary silver exploration sector by acquiring two historic mine projects in northern NSW, once Australia’s silver elephant country.
Silver Mines (ASX: SVL) is vending the Webbs and Conrad silver projects in return for a 19% stake in Thomson, that company saying it wants to focus on its flagship Bowdens advanced silver project.
Thomson has firm commitments for a $6 million placement at $0.062 per share.
Additionally, Silver Mines managing director Anthony McClure will join the Thomson board.
Both projects have JORC-compliant resources
Webbs and Conrad have both seen historic, high-grade silver production and both have historic resources.
Thomson claims Webbs has some of the highest grades of any undeveloped silver project in Australia, with a former JORC 2004 resource of 1.5 million tonnes at 345 grams per tonne silver equivalent for a contained 16.5 million ounces.
Conrad has a historic resource of 2.65Mt at 206g/t silver equivalent for a contained 17.5Moz.
Thomson says that the acquisitions complements its existing portfolio of gold assets.
Drilling is already under way at its Chillagoe gold project and rigs will soon begin drilling at the Yalgogrin and Harry Smith projects.
Will move quickly into silver production
Thomson executive chairman David Williams describes the deal as “transformational” for his company.
“With these acquisitions, Thomson has added an additional layer of diversification to its existing high-quality exploration portfolio and, with a focused effort, Thomson will be able to move quickly into becoming a silver producer,” he added.
Webbs is located 65km northeast of Inverell.
Silver mineralisation was discovered there in 1884 and, until 1901, miners produced 550,000t of ore at an average 23oz/t.
Silver Mines acquired the project is 2006 and has drilled 314 holes for 30,000m
Conrad former major producer
The Conrad mine, 25km south of Inverell, was once among the largest NSW silver producers.
A recorded 175,000t of ore were mined for 3.5Moz of silver, along with lead, zinc, copper and tin by-product.
Recorded average grades were around 600g/t, 8% lead, 4% zinc, 1.5% copper and 1.5% tin.
Production, which mined to a maximum depth of 267m, began in 1891 and stopped in 1912 for what are believed to be industrial relations problems.
The former Broken Hill South mined there in 1947 and further mining took place between 1955 and 1957.
In 2009 the then owner, Malachite Resources (ASX: MAR) formed an alliance with Chinese investment group Nanyang Mining Resources to restart mining at Conrad but that was short-lived.