Mineral & Financial Investments Ltd (LON:MAFL) expects a “significant” expansion in the known size of the deposit at its 75% owned Lagoa Salgada zinc project in Portugal, where drilling by investee company Ascendant Resources (TSE:ASND) has produced several encouraging results.
The Lagoa Salgada volcanogenic massive sulphide project, which is being funded and guided by 25%-owner Ascendant as part of a deal where the Canadian company can take up to an 80% stake.
After drilling 15 holes, Ascendant anticipates delivering a new resource estimate in the third quarter of the year and a preliminary economic assessment by year end, with the mineral resource currently at 10mln tonnes.
The results with multiple holes included significant length intercepts of greater than 20% zinc equivalent (Zn Eq) mineralization and as high as 30.14% Zn over 12.2m.
If Ascendant successfully takes Lagoa Salgada, where M&FI's 75% stake is owned via its wholly owned TH Crestgate subsidiary, through to the end of the feasibility study stage and makes staged payments to Mineral and Financial of US$6mln, of which US$250,000 has already been received, it will earn in a stake of 80%.
M&FI chairman Jacques Vaillancourt said: “The north zone represents the vast majority of the current mineral resource estimate, yet Ascendant's management is highly confident it can expand and upgrade this deposit as well as the central and south zones."
Ascendant are also, Vaillancourt said, “very optimistic” with the exploration potential on the 8 km gravity anomaly in the northern portion of the property and are applying the same diligence and strategy as successfully applied elsewhere.
“With the 2019 program exceeding our expectations thus far, we look forward to additional results to come over the summer months as well as providing an updated Mineral Resource in the third quarter."