Latest assay results from drilling at W Resources PLC's (LON:WRES) at La Parrilla have reinforced belief there is a large ore body to the south.
Hole IRC1-44 shows continuity and very high grades of both tungsten and tin from surface in areas previously categorised in the mine plan as waste, the company said.
Hole IRC1-44 located 25 metres (m) to the south of high-grade Hole IRC1-40 has reported assay results of 40m at 0.496% WO3 (tungsten trioxide) and 0.112% Sn (tin) while Hole IRC1-41 has reported 11m at 0.126% WO3 and 0.02% Sn.
The La Parrilla tungsten project is located in south-west Spain, with first production earmarked for the end of this year after the company recently secured a finance package to pay for fast-track development of the asset.
Initial mining is expected to start in the fourth quarter around the high-grade hole IRC1-40 using the existing facilities producing at 400 tonnes of concentrate a year.
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"It is clear from these initial results that there is a large lateral extension of the La Parrilla ore body to the south,” said Michael Masterman, chairman of W Resources.
“Hole IRC1-44 following on the heels of Hole IRC1-40 drilled in 2015 has exceptional grades of tungsten and tin from surface at over four times the grade of the ore body. We expect that incorporation of this new data in the mine plan will increase initial production grades, reduce stripping ratios, and reduce unit operating costs. We have a zone of significantly higher grade mineralisation accessible at surface, which should underpin a successful start-up of the La Parrilla mine," Masterman added.
Yuen Low, analyst at Shore Capital, noted: "For us, the key takeaway was that Hole 44 indicates continuity of good grades from surface in a lateral extension of the La Parrilla orebody to the south in areas previously regarded as waste.
"Having a zone of higher-grade mineralisation accessible at surface should enable WRES to increase initial production grades, reduce strip ratios and lower unit costs."
Shares gained just over over 2% to 0.505p.