Pinnacle Silver and Gold (PINN ) is initiating the underground rehabilitation of the historic mine workings at its El Potrero project in Mexico, with preparation of drill stations anticipated to begin next week.
Underground delineation drilling is then expected to commence by the second half of March, following extensive underground and surface channel sampling and 3D modelling.
Meanwhile, an application for the environmental permit required for surface drilling has been submitted and the company anticipates that the program could commence in approximately 90 days.
In addition, a second round of metallurgical testing is underway that will optimize the results of the first round of preliminary high level scoping testing, which achieved 95.1% gold recoveries. Head assays of a five-sample main zone composite returned 7.7 grams per tonne gold and 116 grams silver, implying a robust head grade for future operations.
A feasibility study for the extension of a powerline to the project site has been commissioned and will provide cost and time estimates for the installation, for submission to the Mexican authorities.
A community agreement has been signed with the local Ejido El Carmen covering all work that Pinnacle is undertaking to advance the project towards a production decision
“One year in, we are extremely pleased with the progress to date on the Potrero project,” said Robert Archer, chief executive of Pinnacle.
“The commencement of underground rehabilitation is a significant milestone in the advancement of the project as it is not often that the first drill program on a project comprises underground delineation drilling rather than surface exploration. We believe that the underground drilling program will be followed immediately by surface drilling. Following on the excellent results of our first round of metallurgical tests that returned an average of 95.1% gold recovery, this current round of tests will add mineralogical studies, more extensive gravity separation and optimization of leach tests. The feasibility study for the powerline extension will provide the details we need to get approval from the Comisión Federal de Electricidad and give us an estimate of costs and time required for this activity. Importantly, we have signed an agreement with the local Ejido El Carmen supporting our work on their land covering the northern block of the Potrero project where the mines and plant are located. With all of this work moving forward in parallel to de-risk the project, we anticipate being able to make a production decision before year-end.”
View from Vox
Since commencing work on the project one year ago, Pinnacle has made significant progress in following parallel tracks to fast-track the project towards a production decision, as the goal is to commence production as soon as possible. Having taken more than 800 systematic channel samples in the three historic mines along the Dos de Mayo vein trend, Pinnacle geologists have a very good idea of where the principal mineralized zones are located and now need to define their size, shape and average grade. It will be fascinating to watch as the results start coming in.