Alicanto Minerals Ltd (ASX:AQI) has maintained a Speculative Buy rating with a A$0.25 price target by PAC Partners after drilling returned high-grade zinc and silver intersections described as "exceptional" that further strengthen the potential of Sala Silver-Lead-Zinc Project in Sweden.
The results are important for two reasons - firstly, they will form part of the maiden JORC-compliant resource estimate scheduled for the coming months and secondly, the strong zinc assays complement the potential of the silver and lead while taking advantage of the mining infrastructure required to mine the silver.
PAC Partners said it will have a better understanding of the project upon release of more assay results leading into the publication of a maiden resource at Sala, which is expected in early 2022.
Subject to further exploration results PAC believes Sala could be conceptually valued at anywhere between A$60-260 million in the short-medium term.
The following is an extract from PAC Partners research update:
KEY POINTS
- Alicanto Minerals (AQI) own the highly prospective Greater Falun and Sala projects in the Bergslagen district, Southern Sweden. The area is home to world class deposits including Garpenberg (168.5mt @ 3.4% Zn, 1.6% Pb, 0.3g/t Au, 98.0g/t Ag), and Zinkgruvan (46.9mt @ 9.0% Zn, 3.6% Pb, 2.0% Cu, 78.7g/t Ag). The high-grade Sala silver/zinc project has never been systematically explored since the mine closed in 1960’s.
- AQI has released assays from the initial six holes from the maiden drilling campaign at Sala. Results include narrow high-grade mineralisation within broader lower grade intersections.
- Highlights being;
- 3.9m @ 313g/t Ag, 9.6% Zn and 3.2% Pb
- 14m @ 30g/t Ag and 7.6% Zn
- 4m @ 62g/t Ag and 6.9% Zn
- 3.8m @ 9g/t Ag and 7.7% Zn
- Results correlate with a small and sporadic drilling campaign completed by the previous owners in 2012.
- Drilling is ongoing with a further 10,000m of diamond drilling planned. The Company believes they could be in a position to release a maiden resource at Sala in the new year.
- Exploration activities at Greater Falun have included geophysical surveys, desktop reviews and target identification. Further targeting work will be completed into the new year with the next set of drilling scheduled for Q12022.
- AQI has $3.2m cash at back as at August 2021 which will be enough to complete the current Sala drilling campaign.
INVESTMENT VIEW – SPECULATIVE BUY
It’s fair to say the progress has been slower than we expected at the Greater Falun project. The exploration strategy to unlock the secrets of the skarn hosted mineralisation is a challenging one and will take some time. We remain confident that a discovery will be made in the district. With this in mind and knowing the technical challenges involved at Greater Falun, AQI acquired the high-grade silver/zinc Sala project. Given the exploration success so far, Sala could now be considered the primary asset in the stable and we are encouraged by the first six holes at Sala with high grade hits, many at mineable widths. We will have a better understanding of the project upon release of more assay results leading into the publication of a maiden resource at Sala, which is expected early 2022. Subject to further exploration results we believe Sala could be conceptually valued at anywhere between $60-260m in the short-medium term. With drilling ongoing and exploration news to come we maintain our speculative buy rating.
CATALYSTS
Sala Assays Q4 2021 – Assays from ongoing drilling campaign are expected in Q4 2021.
Further geophysics/drilling at Greater Falun – Drilling will focus on Sala in the short term while more desktop work and target identification is completed at the Greater Falun project. Drilling should recommence in Q1 2022.
Maiden Sala resource – The Company believe a maiden resource for Sala could be published in Q1 2022.