North River Resources has provided an update on its drilling campaign to increase reserves and resources at the Namib Project: 4,828m has been drilled over 66 holes since the most recent resource statement of August 2014, with 52% (34) encountering significant intercepts. Drilling was primarily undertaken within the upper half of the North Orebody, as well as below the historic South Mine (~200m below surface). High-grade intercepts from below the Southern and adjacent Junction orebodies included:
- NLDDK070 — 3.6m at 15.6% Zn, 1.0% Pb
- NLDDK071 — 7.3 at 14.9% Zn, 3.2% Pb & 4.5m at 9.3% Zn, 13.6% Pb
- NLDD062 — 3.8m at 10.9% Zn, 8.7% Pb
- NLDD061 — 5.7m at 16.8% Zn, 6.9% Pb
- NLDD056 — 8.7m at 9.6% Zn, 3.7% Pb
The accelerated infill and expansion drill programme as per the November 2015 revised work programme is underway, with the company advising that results will be released in due course.
RFC Ambrian COMMENT: The company has indicated that these results will facilitate targeting for the approximately 3,800m resource expansion drilling programme, as announced in mid-November 2015, which is looking to delineate mineralisation below both the northern and southern sections of the orebody. The company is aiming for an updated JORC-compliant resource statement by the end of 2Q16, which will incorporate all drill results following on from the August 2014 published figures.
We calculate that, running our models at current spot prices, 25% and 50% increases in mining inventory should boost the project’s NPV10 approximately twofold and threefold respectively. At the DFS price deck of US$2,400/t zinc and US$2,300/t lead (ie, in line with long-term consensus), we estimate that 25% and 50% rises in the mining inventory should raise the project NPV10 by closer to 40% and 75% respectively. Hence, we see the addition of resources at Namib as having the potential to be highly value accretive, and look to further newsflow regarding both progression towards receipt of the Mining Licence and further drilling results in the run-up to the anticipated resource statement update within 1H16.
Extensions to Known Resources and New High-grade Targets at Namib
