NGEx cuts 7.77% copper at Lunahuasi in Argentina

A new phase of drilling at Lunahuasi is scheduled to start in October. As of the first quarter, NGEx held $124.2 million in cash.

Drilling by NGEx Minerals (TSX: NGEX; US-OTC: NGXXF) has returned a highlight result of 8.3 metres grading 7.77% copper, 4.01 grams gold per tonne and 191.2 grams silver at the company’s Lunahuasi polymetallic project in northwest Argentina. 

That intercept, in hole DPDH041 and drilled from 266.7 metres depth, also included 38.1 metres at 5.06% copper, 1.98 grams gold and 63.9 grams silver, NGEx said Wednesday in a statement. Another hole, DPDH040, cut 133.3 metres grading 1.01% copper, 0.95 gram gold per tonne and 44.5 grams silver from 523 metres depth. The project sits in the Vicuña district, just east of the border with Chile.

Grades at Lunahuasi “are among the highest reported in the Vicuña district and confirm the persistence of multiple, discrete, high-grade lenses within a broader porphyry environment,” National Bank Financial mining analyst Rabi Nizami said Wednesday in a note. He has an “outperform” rating on NGEx.

After setting a new 52-week high of $16.74 apiece Wednesday morning in Toronto, NGEx fell 0.7% to $15.79 Wednesday afternoon. That gave the company a market value of about $3.3 billion.

Mars, Saturn, Jupiter

NGEx also said it named three of the project’s new high-grade zones Mars, Saturn and Jupiter. The trio represents “the first group of what will ultimately become several distinct high-grade zones within the Lunahuasi deposit,” NGEx said.

The naming “reflects increasing confidence in geological continuity,” Nizami said. “These large high-grade structures present the opportunity to develop Lunahuasi as a focused, high-grade underground mine that could be advanced more rapidly than the other Vicuna projects which represent bulk tonnage open pits on longer dated development paths,” he added.

Other highlights released Wednesday include hole DPDH042, which cut 48.9 metres grading 4.87% copper, 3.29 grams gold and 54.7 grams silver from 281.7 metres depth. Hole DPDH043, meanwhile, intersected 89.6 metres at 1.54% copper, 1.03 grams gold per tonne and 14.4 grams silver from 198.4 metres downhole.

“Results to date indicate that these are just the first three of many additional zones that we have discovered in isolated drill intersections, and we are confident that additional closer spaced drilling will ultimately help to define them,” NGEx CEO Wojtek Wodzicki said in the release. “With results from the final four holes of the program still to come and planning well underway for our fourth drill campaign, set to start in October, we are in a very strong position to continue increasing the value of this unique asset.”

More to come

The results are part of a 25,000-metre drilling campaign that concluded in May. Full assays for another four holes, representing 2,360 metres of drill core, are still pending, Vancouver-based NGEx said.

Lunahuasi sits about 6 km north of Lundin Mining (TSX: LUN) and BHP’s (ASX: BHP) joint Filo del Sol deposit and 8 km west of Lundin’s Josemaría. Both are major copper-gold projects nearing pre-feasibility or construction.

“Lunahuasi continues to deliver in headline intercepts, consistency and growth,” Canaccord Genuity mining analyst Peter Bell said Wednesday in a note. “NGEx’s concessions are in a very prospective part of the world, and we believe this early success at Lunahuasi sets the stage for an exciting exploration story that is heightened when compared to nearby projects such as Filo del Sol.”

Other zones at Lunahuasi will require further drilling and better geological understanding before they are assigned names, Desjardins Securities mining analyst Bryce Adams said in a note.

A new phase of drilling at Lunahuasi is scheduled to start in October. As of the first quarter, NGEx held $124.2 million in cash.