June 2016, Quarterly Activities Report
  • Successful Capital Raising of A$6,500,000 to fund resource drilling and regional exploration;
  • Drilling results have de‐risked the project by confirming the presence of additional mineralisation extending to depth
    • Very high grade zinc‐lead mineralisation over encouraging widths continue to be obtained from drilling of the Main Manto Horizon sulphide mineralisation below Level 7
    • Encouraging results continue to be received from drilling the Tres Amigos mineralisation. Drilling planned from surface to target the up‐dip extensions
  • Regional exploration on the mineralised corridor which hosts the Plomosas mineralisation has commenced
    • Detailed geophysical heli‐mag and gravity exploration surveys commenced over the mineralised mine corridor
  • Metallurgical testwork to commence on the sulphide mineralisation with encouraging results for the semi‐oxidised sulphide material received

Consolidated Zinc Limited (CZL:ASX) is pleased to present the following quarterly report.

CORPORATE

During the June quarter the Company raised A$6.5 Million through an over‐subscribed placement to new and existing sophisticated investors. Full details of the raising have been provided in the ASX announcement of 6 May, 2016. The issue was strongly supported by existing shareholders and led by DJ Carmichael. The funds are hallmarked for expanding the underground resource drilling program in the sulphide mineralisation below Level 7 and the commencement of regional exploration on the mineralised corridor which hosts the Plomosas mine.

OPERATIONS AND DEVELOPMENT - PLOMOSAS PROJECT, MEXICO CUEVITAS EXTENSIONAL DRILLING - LEVEL 7 DEEPS

Underground drilling and development continued in Level 7 during the quarter. 18 drillholes, LV7DD013 to LV7030, were completed in the quarter for 1417.25m. Drilling has demonstrated continued mineralisation over several hundred metres of strike and up to 50m down‐dip. The progress of the drilling and results as they came to hand were provided in ASX announcements dated April 7, May 23 and June 14.

Drilling highlights for the quarter are summarised in Table 1, with further hole details in Table 3 below. Additional drillholes for which assay results are awaited are also included in Table 3, some of which were completed after the quarter.

Figure 1 illustrates the spatial relationship of the intercepts to date within the mineralised horizon with the pierce points depicted as "grade x True width" symbols to illustrate the relative strength of these intercepts. This also illustrates the pinch and swell nature of the mineralisation which will become more obvious as the infill and extensional resource drilling program continues. The mineralised horizon highlighted in Figure 1 is for Level 7 only.

Figure 1: Planned and actual pierce point of holes drilled from Cuddies 7.1 and 7.2 showing strength of intercepts obtained.

Significantly, the drilling to date continues to demonstrate that high grade mineralisation extends below Level 7 (Figures 1,3) which, at approximately 240m below surface, was the deepest ore drive developed at Plomosas. This is a major step in technically de‐risking the project and additional results received post the end of the June quarter provided further evidence for the extension of mineralisation to the north.

This provides additional confidence for the ongoing investigations into the underground developments in sub‐level 7 and sub‐level 8.

Table 1. LEVEL 7 DEEPS

Highlights of resource definition drilling results received

Hole ID

From (m)

To (m)

Inter section (m)

TW* (m)

Zn %

Pb %

Ag g/t

Comment

LV7DD009**

68.45

Includes:

68.45

73.95

75.30

69.45

75.30

6.85

1.00

1.35

4.70

0.69

0.93

14.44

30.59

24.40

6.88

16.90

8.77

42.58

127.00

42.10

Intermittent massive sulphide with manto and breccias (interval includes 3m of low grade)

LV7DD010**

67.50

Includes:

67.50

70.65

69.65

3.15

2.15

2.10

1.10

37.86

47.92

4.18

5.09

48.96

63.03

Massive sulphides within brecciated manto zone

LV7DD012**

57.15

Includes:

57.15

61.25

58.70

4.10

1.55

3.30

1.25

25.20

37.18

12.66

17.25

70.73

101.00

Massive sulphide within breccia

L7VDD017

47.55

50.85

3.30

2.60

15.16

10.02

69.77

Intermittent massive sulphides in brecciated marble. Infill hole.

LV7DD018

57.60

Comprises:

57.60

58.60

59.60

60.65

62.15

58.60

59.60

60.65

62.15

4.55

1.00

1.00

1.05

1.11

3.36

0.74

0.74

0.77

1.11

33.72

41.94

36.41

37.36

23.90

14.32

16.90

16.85

14.90

10.50

82.29

111.00

97.10

86.40

50.40

Massive sulphide. Hole terminated in abandoned workings.

L7VDD020

17.85

19.35

1.50

1.17

32.09

18.10

84.50

Mineralisation intersected below Level 7 stopes

L7VDD021

9.75

11.65

1.90

1.87

32.12

16.75

108.00

Mineralisation continuation from hole LV7DD020

L7V023

59.3

67.8

8.50

3.02

34.99

15.40

158.52

Massive sulphide intersected below Level 7 drives

L7V026

59.3

67.8

8.50

3.02

34.99

15.40

158.52

Massive sulphide within breccia

L7V030

38.25

52.05

13.80

TBA

TBA

TBA

TBA

Massive sulphide within breccia

*TW is True Width and represents the best estimate of the intercept based on the geological interpretation of the sequence.

**Holes LV7DD009 to LV7DD012 were completed in the previous quarter but assays received in the June 2016 Quarter.

Holes LV7028 to LV7030 were also completed within the quarter but assay results are awaited. Holes LV7031 to LV7032 were completed subsequent to the quarter and assays are awaited.

A third drilling position to the north of the first two drilling positions (Cuddies 7.1 and 7.2) was also commenced during the quarter and is expected to be completed in July 2016. Drilling is planned from this position to extend the drilled panel by a further 100m to the north. The completed and planned development for drilling positions on Level 7 are shown in Figure 2.

Figure 2. Completed and proposed development locations from Level 7 opening up the down dip and northern and southern extensions of the mineralisation.

Consolidated Zinc Limited published this content on 29 July 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 11 August 2016 12:37:05 UTC.

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