Alien Metals Limited’s (LON:UFO) proposed acquisition of Pilbara-based silver mine Elizabeth Hill is an exciting addition to an expanding portfolio of mining interests says research house First Equity.
The formerly-producing mine complements the group’s Mexican silver assets and follows the recent addition of Western Australia iron-ore projects at Hancock Range and Brockman.
Due diligence work is currently underway at Elizabeth Hill, which will involve analysis of drilling data collected by current owner Karratha Metals.
“Elizabeth Hill was previously in production between 1998 and 2000, with production of 1,170,000 ounces of silver, with a high head grade averaging 70 oz/t.
“It was mined during a period when silver prices were in a 10-year slump, trading in the region of US$4.5 to US$6.6 p/oz, compared to today’s much-improved price environment of US$16.7 p/oz.”
Exploration upside potential exists at depths below the known mineralisation and outside of the mine area to the east and west of Elizabeth Hill., says the research group.
The mine was noted for its high-grade nugget finds, including one of the largest silver nuggets ever found in Australia.
That giant weighed 180kg and was discovered in 2000.
Elizabeth Hill is also situated in an established mining district with full infrastructure and a port 25km away.
The cost of the acquisition is £322,000 plus a loan of £62,000.
If completed, the acquisition will represent Alien Metal’s most advanced project says First Equity, which has a ‘buy’ recommendation on the shares.