After reviewing an independent conceptual study for the Star Zinc Project in Zambia, Galileo Resources has decided to fast-track a drilling program. The aim is to upgrade the current non-compliant resource and to test the potential to increase the resource size.
The review of the 2015 study was undertaken by Galileo using current metal prices. It demonstrates a conceptual projected IRR of 77% with NPV of US$18 million at a 10% discount rate and a one-year payback on capital expenditure of US$9.1 million
The drill program, which is estimated to cost around US$350,000, is expected to include initial twin-hole drilling in the non-compliant resource to upgrade it to JORC 2012 compliance. This will be followed by new drilling to test the potential to extend the high grade resource east and west, and in new ground to the south.
The occurrence of high grade (>50% zinc) float, 200 metres south of the current open pit, presents an exciting prospective new target for mapping and exploration.
The conceptual study is based on open pit mining from the near-surface deposit, a mineral resource of 250,000 tonnes at 20% zinc for a mine life of six years.
Galileo’s CEO Colin Bird said, “I am pleased that we are advancing a fast track exploration program for the Star Zinc Project. Our initial review suggests that the project could potentially be developed as a viable standalone project without adding further to the resource. However, we believe that the resource could potentially be much bigger and therefore a large proportion of our exploration will focus on increasing the size of project resource and contained zinc metal.
“Our acquisition of this project includes, further down the line, an offtake agreement, compatibility and amenability of the Star Zinc ore permitting, with JV partner BMR Group, which is developing its Kabwe zinc tailings treatment project some 110km north of Star Zinc.
“The objective here would be to provide sufficient feed for Kabwe, while pursuing our quest for a much larger project resource.”