Alta Zinc (AZI.AX) has released an updated resource estimate on its Gorno zinc project Italy. While the updated resource contains a sulphide and an oxide portion, we are disregarding the oxide portion of the resource as it will be more difficult to actually recover all main metals. As the oxide resource counts for less than 15% of the global mineral resource estimate, it’s better to just disregard it at this point until the viability can be proven. The updated resource was based on 85 drill holes for a total of just over 6,200 meters drilled in the past 15 months.

Looking at the sulphide resource, Gorno now hosts a total of 6.8 million tonnes of which 4 million tonnes are classified as an indicated resource. The total (indicated + inferred) resource contains 470,000 tonnes of zinc, 120,000 tonnes of lead and 7.1 million ounces of silver at a grade of respectively 6.9%, 1.8% and 33 g/t.

The resource remains open in several directions, and Alta Zinc is currently drilling in the areas beyond the limits of the current resource and if those dots could be connected, Alta Zinc has a decent shot at outlining a 10 million tonne sulphide resource. At the current grade, that should be sufficient to design an economic development scenario.

We weren’t sure about Gorno before but with the current sulphide-hosted resource, the additional exploration potential and the good ZnPb grade of almost 9% (with a potentially attractive silver kicker if the silver gets recovered in the lead concentrate), the project is looking increasingly interesting.

Disclosure: The author has no position in Alta Zinc. Please read our disclaimer.

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