Investigator Resources (ASX:IVR) shares jumped 20% today after the company achieved a massive improvement in the intrinsic value of its Paris project in South Australia by increasing resources 60% to 33 million ounces of silver.
Investigator stock was last trading at A$0.012 as Paris grew its resource base to 8.8 million tonnes at 116 g/t silver for 33 million ounces of contained silver.
This represents both a major increase over the tonnages of the maiden resource (20 million ounces of silver) and a slight improvement in the robust maiden grade estimate of 110 g/t silver.
The resource was defined using a cut-off grade of 50 g/t silver.
Paris silver mineralisation is irregularly distributed between the surface and about 160 metres depth within a flat elongate clay-altered breccia body that extends over nearly 1.5 kilometres in length.
Understanding of the highly variable distribution of the mineralisation – typical for this style of deposit – benefited from the application of more sophisticated modelling.
“The upgrade was made possible firstly by adding some of the northern extensions drilled after the maiden resource in 2013, but primarily through the increased confidence in the geological model,” Investigator managing director John Anderson said.
“This enabled the fresh geostatistical approach to better model the mineralisation for the high-grade zones and the margins, while not imposing any preconception about pit designs.”
Investigator is currently is scoping a work program to convert Paris resources from the inferred to an indicated confidence category.
This work is expected to require only a modest drill program.
A boost for Paris
A major increase in Paris resources reinforces confidence in the project’s potential to support a large, open pit mine.
The shallowness and high grade of the deposit were confirmed by the expansion and underline Paris’ prospectivity for supporting this more economic mining model.
Preliminary independent metallurgical testwork – which has indicated silver recoveries of between 65% and 97% using conventional extraction process – could be further enhanced given the increasingly robust nature of the mineralisation.
The size of Paris could more generally be an indication that the surrounding region is significantly mineralised with economically viable silver. This view is further supported by the fact that recent exploration of Paris-style lead systems in the area has delivered intersections grading up to 91.9 g/t silver.
The larger silver resource also provides a stronger platform for leading a varied output of precious and base metals at the site. Paris has production potential in copper, gold, nickel, zinc and lead as well.
Diverse potential
A geological review of Paris last month emphasised that the latest silver resource re-estimation should also support the project’s base metal potential.
Work on Paris’ geological framework has confirmed widespread ultramafic nickel sulphide potential at the site as well as enhanced porphyry and skarn copper potential.
A heritage survey is underway to gain drill access for new priority copper targets at the project’s Nankivel West area while the majority of nickel targets are already cleared.
Investigator has likewise filed applications for large tenements with additional copper and nickel potential based on breakthrough government research in the region.
A previously reported review of 2011 and 2014 scout drilling in the Diomedes area recognised nickel intersections in nine widespread holes with initial petrology identifying an ultramafic host.
Also, broad intervals of anomalous zinc, lead or copper were intersected at the Nankivel West, Helen West and Peterlumbo Hill areas, with the best intersections all coming returning 12 metres at 1.28% zinc, 3 metres at 0.81% lead and 9 metres at 0.07% copper.
A full review of the drillhole geology and metal zoning is being undertaken to seek vectors to porphyry targets warranting further exploration definition. Drilling of the established skarn targets is proposed for early in 2016 after the heritage survey is finalised.
Analysis
The silver resource upgrade at Paris, along with positive metallurgical testwork undertaken previously, strengthens the value of Investigator’s key asset.
The large 60% increase in silver resources at an even higher average grade bodes well for the development of operational flowsheets and more ambitious mine designs in the future.
Investor interest in the resource expansion reveals an understanding in the market that this milestone could lead to the development of more economic operational plans.
Additional price catalysts for investigator could be generated by planned follow-up work at Paris, including an effort to improve the confidence level of the existing resources and an exploration push focused on prospective base metal targets.
A heritage survey is already underway to gain drill access for new priority copper targets at the project’s Nankivel West area and the majority of nickel targets are already cleared.
The larger silver resource also benefits from a macro warming of sentiment for the white metal, which is emerging as a commodity evenly split between the sectors of safe haven wealth storage and high-tech innovation as local operators enjoy a favourable exchange rate for the Australian dollar.
As new technological applications become increasingly marketable, silver is realising unmatched versatility as a strategic niche material in the same vein as rare earths, graphite or lithium.
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