VANCOUVER – Kootenay Silver (KTN-V) always knew there was gold alongside the silver at its flagship Promontorio project in Sonora, Mexico, but without proof the gold was recoverable the company had always excluded the yellow metal from its resource estimates.
Now a series of metallurgical tests has shown that 70% of the gold can be pulled from Promontorio’s diatreme breccia-hosted mineralization, so Kootenay has officially added gold to its resource count. Adding luster to that golden shine, the gold made Promontorio’s resource fit into one large pit instead of the two smaller pits that the silver-only resource necessitated.
That single open pit now encompasses 44.5 million measured and indicated tonnes grading 27.77 g/t Ag, 0.35 g/t Au, 0.4% Pb, and 0.47% Zn, plus 14.6 million inferred tonnes averaging 24.95 g/t Ag, 0.28 g/t Au, 0.28% Pb, and 0.31% Zn. As such the planned pit contains a total of 51.4 million oz of silver, 638,000 oz of gold, 482 million lb of lead, and 558 million lb of zinc.
Kootenay also calculated an underground resource, which lies below the pit and used a cut-off grade of 45 g/t AgEq rather than the 20 g/t Ag equivalent cut-off used for the open pit resource estimation. The underground resource is much smaller, totaling 215,000 measured and indicated tonnes grading 22.89 g/t Ag, 0.28 g/t Au, 0.4% Pb, and 0.55% Zn plus 1.3 million inferred tonnes averaging 26.57 g/t Ag, 0.37 g/t Au, 0.36% Pb, and 0.38% Zn.
Kootenay’s metallurgical test work suggests that Promontorio’s rocks lend themselves to good recoveries. The planned processing circuit involves crushing and grinding followed by lead flotation to create a lead-silver concentrate, zinc flotation to produce a zinc-only concentrate, and finally pyrite flotation to recover the gold.
This process recovers 74% of the silver, 81% of the lead, and 88% of the zinc in Promontorio’s rocks. As for the other precious metal, 65% of the contained gold recovers to the pyrite concentrate while another 9% recovers to the lead concentrate.
Gold would be extracted from a pyrite concentration using cyanidation and pressure oxidation, a process that recovered 94% of the gold from the concentrate. As such Kootenay expects a mine at Promontorio would be able to recover 70% of the deposit’s gold. That will make a material difference in the economics of a mine, since Promontorio is now home to 663,000 oz gold.
That number will likely grow along with the total resource tonnage at the project, as Kootenay continues to drill at Promontorio and expects to update the resource again later this year. In fact, the gold focused resource update did not include any of the drilling completed since the previous calculation in August 2012.
Results released since then include notable hits outside of the resource envelope, such as 47 metres grading 31 g/t Ag, 0.67% Pb, and 0.66% Zn in hole 121, 60 metres of 31 g/t Ag, 0.58% Pb, and 0.6% Zn in hole 129, and 10 metres of 81 g/t Ag, 0.59% Pb, and 0.38% Zn in hole 135.
News of the gold focused resource update left Kootenay’s share price unchanged at 81¢. The company has a 52-week share price range of 62¢ to $1.25 and has 63 million shares outstanding.
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