Lest anyone doubt it, the Irish mining scene is very much alive and kicking.
At Europe’s largest zinc mine, at Tara in County Meath, production is picking up again after a slight drop-off in the previous quarter as underground expansion continues. What’s more, Tara’s owners Boliden (STO:BOL) and Teck Resources (TSE:TECK.A) have also recently started exploration on the surrounding ground in the hope of proving up more metal.
Meanwhile, to the north, one of the largest mining companies on London’s Aim market, Dalradian, was this summer the subject of a now successfully concluded takeover bid by a US$4.5bn investment fund, Orion Mine Finance. Dalradian is looking to develop substantially a gold mine which will be the largest in the British Isles by some margin.
Elsewhere, Hannan Metals is drilling for zinc in County Clare and Glencore for zinc at the Pallas Green project in Limerick, in what could be potentially the second biggest mine in Ireland.
And across the tenement line, joint venture partners Connemara Mining (LON:CON) and Group Eleven Resources (CVE:ZNG) have been building the resource base at the Stonepark project to the point where it’s now known to contain 5.1mln tonnes at 11.3% zinc and lead combined with more to come.
“Stonepark is where we’d expect to see a lot of our newsflow coming from over the next few months,” says Connemara chief executive Patrick Cullen.
“Our best grades have been 25% zinc over 4.5 metres, or 32% zinc and lead combined. That’s really high grade in what we already knew was a high area. Now we have to follow it up.”
He notes that across the tenement line while the Pallas Green project has remained at roughly 42mln tonnes of mineralisation over the past few years the grade has been going up. That can only mean that Glencore has been finding higher grade ore as it has been going along, and jettisoning lower grade material from its resource calculation.
The thinking is that the same sort of effect might in time become apparent at Stonepark.
“Ours is only a maiden resource,” he says, “but anecdotally the two projects are very similar, they’re joined at the hip.”
First things first though, a rule of thumb for mineralisation like that on display at Stonepark is that 10mln tonnes at 10% are enough to justify a mine. Connemara is more than halfway there on the tonnage, and is already punching above the line in terms of grade. But more resource ounces would be welcome, and to that end, further drilling is now underway.
At this stage, Group Eleven as the operator is running a fairly limited campaign amounting to between 1,200 metres and 2,000 metres. The thinking is that this work will provide geological information that will be used in planning a much larger drilling campaign that’s slated for next year.
In support of that work, the government’s airborne geophysical survey, Tellus, is currently flying Limerick at the moment. The results say Cullen will help tie up a lot of piecemeal work undertaken over the years by Connemara, and provide pointers for future work.
Perhaps more intriguing even than the ongoing drilling and Tellus work is the hypothesis that is likely to drive the next major phase of exploration. The target is what Cullen calls the “hotspot,” the geological focus and source of all the mineralisation in the area, including Pallas Green.
There are good grounds for thinking that this hotspot might lie under the wider Stonepark licence, and Group Eleven is midway through an exercise it’s calling the “Big Think” in the course of which it plans to examine in depth all the geological data available on the area going back around 100 years.
All of which means there’s plenty to look forward to from Connemara in the coming months. There are other assets in the portfolio too, notably at Mine River and Inishowen, where exploration work and evaluation of the gold potential continues.
But for the immediate future, all eyes will be on Stonepark.
“We’re within budget, we’ve still got cash in the bank, we’re in the right place in terms of jurisdiction, and the right place to benefit if sentiment takes a turn for the better,” says Cullen.
He remains confident that Ireland is a great place to go mining. It’s not just a question of all the companies that are active. It’s also a question of cost.
At the current zinc price of US$2,700 per tonne or so he’s more than happy.
“In Ireland,” he says, “US$2,500 per tonne is a good price for zinc. We don’t need zinc to be at US$3,000 to be sustainable.