Herencia Resources (LON:HER) shares were up nearly 25% by midday on AIM in reaction to the news of a significant upgrade to the Paguanta project’s underground inventory.
The company increased the size of the mining inventory by 33% to 1.66 million tonnes. As well as the increased tonnage, grades also improved with zinc grades up to 6.1% and lead to 2%, while the silver grade rose to 154 parts per million (ppm).
“To see such a positive uplift in both tonnage and grade, augurs well for our goal of achieving an initial stage one mine life of 5 years at an anticipated 400,000 tonnes per annum (tpa) ore throughput,” managing director Michael Bohm said.
Paguanta’s in-situ zinc and lead inventories increased by 54% and 49% respectively, while the silver inventory is now 102% higher. Furthermore Paguanta’s gold grades were estimated for the first time, at 0.26 parts per million.
Herencia emphasised that the significant upgrade was achieved with only 5,728m of new drilling.
The new inventory incorporated the results of 2010’s drilling program at Paguanta, and its completion marks the end of the year’s technical program.
"It is very pleasing to round out the technical phase of the 2010 program with such a significant upgrade to our underground mining inventory,” Bohm added.
“2010 has been an excellent year for the company.”
With just a simple glance at Herencia’s share performance in recent months, it is clear to see how successful the year has been.
The stock hit a new 52-week high following today’s news on London’s AIM market. In fact it is now at its highest level for almost three years.
As far as the share is concerned the past few weeks have been key, after Herencia confirmed the significant high-grade potential at Paguanta’s Doris project - located about 1,500 metres northeast of the main deposit.
On 10 September the shares jumped more than 60% with the confirmation of high-grade copper and silver at the Paguanta project’s ‘Doris’ prospect. Surface rock-chip sampling from the Chilean project returned copper grades up to 3.3%, and silver grading 617 grams per tonne (g/t).
This morning Bohm summarised the company’s progress and the key milestone’s made during the period.
“We have also added the high grade 'Doris' copper-silver prospect to our asset base, welcomed global metals group Nyrstar onto the shareholder register and seen commodity prices either consolidate, or in the case of silver, rise significantly.”
“We will now review all the information on hand with a view to making a decision on both the Feasibility Study and further work programs at Doris, by year end."
Additionally the company also reported that its Dense Media Separation (DMS) testwork has now been completed at Paguanta.
All samples responded to density separation for zinc, lead and silver, further testwork is required before a final decision is made on DMS.
DMS is being considered as part of the feasibility study.