The current inferred resource stands at 42mln tonnes at a grade of 0.9% copper equivalent.
There's a chance of increasing tonnage by 35 to 40% from some simple step-out drilling, while the opportunity to 'significantly' increase the resource lies in anomalies to the north and north east from currently defined zones, he explains.
Chief executive Dusty Nicol hopes the program of work will lead to an updated resource, which will form the basis of a scoping study or preliminary economic assessment earmarked to be announced by the second quarter of 2018 - which would impressively represent a mere 18-20 month journey from the inception of the firm through to a scoping study.
Historically large copper-silver project at Unkur
Historical data, some of which dates back further than 40 years, suggests that Unkur has the potential to be a globally significant silver and copper project, both in terms of size and grades.
Previous to the above, the most recent Russian resource estimate reckoned Unkur to contain 173,400 tonnes of copper in over 20 million tonnes of ore at grades running at an average of 0.85%, and Nichol reckons the new resource estimate will match this kind of figure, or exceed it.
This resource estimates resides in the highest P1 Russian categorization, but only goes down to a depth of 300 metres, which was deemed then to be the maximum depth an open pit could reach.
The actual mineralisation runs much deeper, as demonstrated by an earlier resource from 1979, which put the total metal contained at over 1 million tonnes of copper held in more than 142 million tonnes of ore.
In fact though, because of the technical limitations of the methods used in the historic work, it seems likely that the early estimates have considerably understated Unkur’s potential.
Discovery upside at the Unkur copper-silver project..
In 2016 the company drilled 16 new diamond drill holes for 4,600 cumulative linear metres. Among the highlights from the results were 40 metres grading 0.74% copper and 65.9 grams per tonne silver, which equates to a 1.34% copper equivalent, and five metres at 0.32% copper and 134.2 grams silver, equating to 0.77% copper equivalent.
The company also excavated five trenches across 309 metres of ground and completed 130 line kilometres of ground magnetic surveying.
So far, intersections of significant mineralisation have been encountered in drilling across a strike length of approximately three kilometres.
Peter Epstein of Epstein Research in July highlighted four important aspects of the resource.
- Most of it (79%) is near surface, including two higher grade pods of mineralization, which could be amenable to low-cost open pit mining and could be mined earlier in a prospective mine plan
- Mineralization is open in both directions along strike and down dip.
- There is now thought to be more than one layer of ore, not just a single mineralized zone.
- The mineral resource estimate only covers about half the known strike length
Mix of metals provides added value..
In the summer of 2016, when silver was priced at over US$17.00 per ounce and copper at around US$2.00 per pound, the value of the silver encountered in the company’s 10 drill intersections outweighed that of the copper.
In the six months that followed though, the copper price strengthened by 25% while the silver price dropped by around 8%. That meant that the value of the copper then outweighed the value of the silver contained, assuming 100% recoveries.
So, this deposit provides a natural hedge against movements in the metals markets, and will also allow a certain flexibility when it goes into production in terms of maximizing revenue.
Copper prices are currently enjoying a positive run in 2017, although the price did dip back a tad in September. Silver has been relatively stable this year.
The firm is still in talks over financing ahead of resuming its exploratiin work at Unkur, which it hopes to do before long.
Shares in Toronto are unchanged at 15 cents each.