Tethyan Resources (TETH.V) has released the assay results of its drill program at the Kizevak project in Serbia much earlier than we expected, considering the drill program ended just two weeks ago. We think Tethyan requested the lab to apply the rush procedure, and with a good reason.
In the second hole of the drill campaign, the company intersected an absolutely stunning result of 12 meters containing 22% zinc, almost 10.3% lead and 5.5 ounces of silver per tonne of rock. Using a zinc price of $1.1/lb, a lead price of $1/lb and a silver price of $15/oz, this rock has gross value of in excess of US$830/tonne. Of course, the net value will be substantially lower as you’d still have to take the recovery rates and payability percentages into account, but 12 Meters at a combined 32% ZnPb is massive. And if the recovery rate isn’t too low, the silver credit could actually take care of the mining costs…
The assay results from the three other holes are also very encouraging. The 43 meters of 4.3% zinc and 2.49% lead is interesting, and in a low-cost country like Serbia, a combined grade of 6.7% ZnPb should be viable. However, it’s more important to highlight the shorter (but still very wide) interval of 13.1 meters of 16.33% ZnPb with a silver credit of almost 2 ounces per tonne.
This is an extremely encouraging start of the exploration program at Kizevak. And although these four holes were drilled close to each other (which prevents Tethyan from building tonnage), it does confirm the company’s exploration strategy as the mineralization from the past-producing Kizevak mine appears to be continuing towards the southeast onto Tethyan’s land position.
We expect to catch up with CEO Baker soon, and will provide a more in-depth update after our conversation.