Page 60 - pd297-Sept21-mag-web

neW soUth WALes sPotLIGht

Bowdens underground takes shape

uch is the confidence inside Silver Mines coveries of 52.91 moz silver, 108,000t zinc Given the dearth of silver deposits in Aus-
SLtd, the company has launched a scop- and 79,300t lead. tralia, McClure admitted there was still con-
ing study into the underground potential of its Revenue projected from 16.5 years of jecture over the origins of Bowdens.
Bowdens silver project even before produc- production from Bowdens is forecast at “It is a real head scratcher as to why it sits
ing a resource update. $US1.42 billion. here in NSW,” he said. “In Australia, silver is
Silver Mines announced the launch of the McClure said approval for the project was usually a by-product, the only other silver-
scoping study in August, citing the “ongoing imminent. dominant deposit is Cannington in Queens-
outstanding drilling success” on the project. “This is not a big coal project, it is not in land.”
The company is already in the latter stages a difficult area, and we own 100% of the Despite presenting a geological conun-
of permitting for the open pit component ground,” he said. drum, Bowdens’ uniqueness does have its
but as managing director Tony McClure ex- Community opposition to new coal and advantages, particularly given the recent
plained, the addition of an underground di- gas projects is strong but McClure believes performance of the silver price.
mension could have a major impact on the the low-impact nature of Bowdens has al- “With Cannington set to close Bowdens
project, 26km east of Mudgee, New South lowed Silver Mines to buck the trend and is the largest undeveloped silver project in
Wales. Australia and one of the larg-
“If we are able to supple- est in the world,” McClure
ment the open pit feed with said. “Because of that we
high-grade material from have seen some large North
an underground mine it af- American and European in-
fects the economics greatly,” stitutional investors looking at
McClure told Paydirt. “The the company.”
underground component The last 18 months have
doesn’t affect ongoing open been a remarkable period
pit development and it is for silver and silver equities.
a very clear value-add ex- A retail-led run on commod-
ercise from the results we ity markets pushed the spot
have been getting.” Drilling on underground targets at Silver Mines’ Bowdens project has delivered price from $US12/oz to more
The results come from some notable intercepts, including 4m @ 980 g/t silver than $US29/oz in late 2020
an ongoing 30,000m drilling with several smaller spikes
programme designed to test underground garner community support. in the early months of 2021. The spot surge
extensions to the Bowdens resource. The “The pressure on coal projects is not go- dragged equities along with it.
programme started in June, delivering a ing away but the spotlight is on projects like McClure conceded the spot price spike
string of high-grade hits, including 4m @ ours and McPhillamys [gold project owned went beyond market fundamentals but he
980 g/t from 311m, 5.2m @ 369 g/t silver by Regis Resources Ltd] to get up and pick said Silver Mines hadn’t been blown off
equivalent from 274m, 8.3m @ 354 g/t sil- up the slack,” he said. course by the movements.
ver equivalent from 263m, 13m @ 264 g/t The success of the underground drill- “It didn’t really affect us and actually we
silver equivalent and 8m @ 543 g/t silver out confirms the potential Silver Mines saw came out the other side in better shape,” he
from 307m. when it acquired Bowdens in 2016. Former said. “We have had a good run in the last
“From the outset the deeper drilling owner Kingsgate Consolidated Ltd had 12 months but that has been more about the
showed the deposit continued at depth,” spent considerable time and money on the project than the silver price, that one or two
McClure said. “We are producing grades in project but with distractions elsewhere in the days of speculations was only a tiny part of
ounces per tonne rather than grams and it portfolio there was a lack of in-depth work the market.
was obvious from what we have been see- on geological models. McClure said it had “In the longer-term shareholders both big
ing that we could move ahead with a scoping taken Silver Mines five years to build its un- and small are playing in a market with a ro-
study before we complete the resource.” derstanding. bust outlook and that blip didn’t sway them
The study will be headed by GR Engineer- “There had been a reasonable amount one way or the other. Eighteen months
ing Services Ltd and Entech. done by Kingsgate, a complete drill-out, re- ago we had 3,000 shareholders, today it
“We still don’t know the extent in the three source and feasibility study but all that histor- is around 12,000; that is very unusual for a
zones we are drilling out at the moment, but ical work was focused on the top 100-200m, company like ours.”
we know it has good geometry and it is wide there had been very little effort put into un- Regardless of short-term changes, Mc-
so by doing the resource and scoping study in derstanding why it was there and what was Clure remains convinced silver and there-
tandem we should be ready to move straight underneath,” he said. fore his company are in for a sustained pur-
into feasibility study once the drill-out and Silver Mines is now closing in on an an- ple patch.
scoping study are complete,” McClure said. swer to the deposit’s genesis. In June, the “Several of the US and European banks
If positive, the underground feasibil- company completed the first stage of a R&D are bullish on silver and on the ASX we are
ity study will reinforce the economics of the programme designed to better understand the only pure silver stock available,” he said.
open pit development at Bowdens which the Permian volcanics and basement Palae- “Cannacord raised $30 million for us in Feb-
could start next year. ozoic rocks at Bowdens. While the deposit it- ruary but the raising had applications for
A 2018 base case feasibility study (using self is epithermal, the company is using new more than $100 million. There is remarkable
an average of $US20.90/oz) had AISC of technologies (including machine learning) to interest in silver plays and that interest is not
$US12.94/oz and an initial capex of $US184 develop hypotheses to aid the search for a going away.”
million to produce average concentrate re- primary porphyry source. – Dominic Piper

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