Vendetta Mining (VTT.V) has released the long-awaited results of its first pass metallurgical test work on the Pegmont Lead-Zinc project in Australia. The company had sent over three batches of mineralization and in all three cases, the ALS lab in Tasmania was able to produce a separate marketable lead and zinc concentrate, which is exactly what the company needed to see.
With an average zinc grade of approximately 50% in the zinc con, the quality of the concentrate meets the industry standards (48-52% Zn), whilst the average grade of the lead concentrate is also of standard marketable grade at 66-70%. What’s perhaps even more important is the average zinc recovery rate of 62% at the Burke Hinge Zone (which is the company’s open pit target), increases to 76% on the Lens 5 samples as the recovery profile appears to track well with overall zinc head grade.
Another interesting fact is the 81% recovery rate of the lead from the transition mineralization. Whilst the lead recovery is excellent, the zinc recovery rate is quite low at 19.3% but Vendetta doesn’t feel the submitted sample is representative for the entire BHZ Transition zone. Also keep in mind this transition ore will have to be mined anyway so even if none of the minerals could be recovered, Vendetta would have to incur the mining expenses anyway. And whilst the company is focusing on finding 12-15 million tonnes of sulphide ore, the transition ore could be processed anyway, either during the commissioning phase, or at the end of the mine life (this is yet to be determined).
With these metallurgical test results, Vendetta Mining has taken another major step forward as the lab confirms the company will be able to produce two concentrates from the Pegmont rock. The inability to produce such a differential concentrate could have been a critical flaw for the project, however, Vendetta can now put another check mark on the Pegmont project and in doing so has passed a major derisking milestone. We also have the impression these recovery rates and concentrate results are also pretty similar to South32’s (ASX:S32) Cannington operation (which has an additional silver credit). Developing a scenario wherein the ore would be processed at a nearby mill has been Vendetta’s main focus, and we are pretty certain South32 is keeping an eye on Pegmont’s progress.
Vendetta Mining had a booth at the most recent PDAC conference in Toronto last week, and it looked like the met results didn’t go unnoticed as several representatives from different large companies stopped by. But let it be clear Vendetta isn’t in the market for a joint venture and we have the impression the company would only entertain a ‘100% joint venture’, a total sale of the company. Eric Coffin might very well be right when he said this company will be gone in 12 months, and we sincerely hope all shareholders will benefit from a potential future sale of Vendetta. Every single shareholder of Underworld Resources made money when CEO Michael Williams sold that company to Kinross Gold, and we expect him to do the same with Vendetta Mining.