Alien Metals Ltd (LON:UFO) said it has entered an exclusive arrangement to potentially buy the silver tailings project at Elizabeth Hill.
Alien has signed a 60-day exclusivity agreement with Wombat Resources Pty Ltd, the owner of the historic tailings on site within the Elizabeth Hill mining licence in Western Australia, and will use the time to undertake further assessment of the tailings in situ and potentially negotiate an acquisition of the rights and title to the tailings project.
Recent sampling of the tailings undertaken by Alien have returned "very encouraging" results, it said, with silver grades up to 1,270 grammes a tonne (g/t). The 84 samples taken returned an average grade of 472 g/t.
"We have been aware of the potential of historic silver tailings at Elizabeth Hill for some time," said Bill Brodie Good, chief executive and technical director of Alien Metals. "Knowing that the Elizabeth Hill silver mine's historic operations were somewhat inefficient and being very high-grade with abundant native silver we felt that, despite previous reprocessing activities, there is likely significant value remaining in the silver tailings."
"Over the coming months, the company will undertake further sample work and analysis to better understand the most efficient and cost-effective processes to extract the silver from the tailings," he added. "We believe that the silver tailings project could generate near-term cashflow which could help underpin a range of exploration activities at Elizabeth Hill and the Munni Munni North project."
The partly retreated tailings are from the original silver mine operations at Elizabeth Hill.
Alien said its preliminary assessment indicates that there remains about 16,000 tons of tailings on site, based on tonnage of ore extracted from the mine, although it will carry out further work during the exclusivity period to confirm available tailings for reprocessing.
The AIM-listed company also said it it awaiting the results and a final report from an airborne magnetic survey at the Munni Munni project in Australia. It expects to receive the report by mid-March.