GEOLOGY
OVERVIEW
The Upper Silesian region is host to a world-class district of Mississippi Valley-Type zinc-lead deposits. Stratiform mineralization occurs largely within a sub-horizontal to gently dipping dolomite unit of Middle Triassic age within a unit referred to as the Ore Bearing Dolomite (OBD), which hosts most of the historical zinc-lead mines in the district as well as Pomorzany mine, which operated to 2020. In the area of the Zawiercie concessions drilled by Rathdowney at Project Olza, mineralization within the OBD typically occurs at depths of 100 to 200 metres.
Mineral Resources and Exploration Potential
The current inferred mineral resource is based on both Rathdowney and historical drilling, including additional historical data received to July 2014.
The results presented at a range of cut-offs are shown in the table below.
A 2% Zn cut-off was used for the estimate, which is consistent with other Mississippi Valley Type deposits with similar infrastructure and with the costs of mining and processing for the project as described in the Preliminary Economic Assessment, effective date December 31, 2014. The PEA uses median forecast metal prices for Zn US$1.00 -1.10/lb and for Pb of US$0.95-1.00/lb, preliminary average life-of-mine recoveries of 89% Zn and 88.5% Pb and total on-site mining + milling costs of $47.42/tonne milled.
The estimate was completed using a systematic approach encompassing domain modeling based on lithology and grade, detailed geostatistical analysis of the drill hole data and interpolation and inverse distance (ID2) methodology, with resource classification determined using continuity measures from variography.
Reasonable prospects of eventual economic extraction were assessed prior to the resource tally: For all modelled zones, assayed intersections were assessed on a hole-by-hole basis to ensure an adequate mineable thickness. Based on proposed mining method and preliminary recoveries, grade-thickness criteria were assessed for all estimated blocks. Mineralized zones of insufficient thickness and/or grade were discarded. Blocks meeting these criteria were further assessed based on proximity both to other mineable zones and likely potential development - small, isolated groupings of blocks were also discarded and did not contribute to the overall resource tally. Since the company is advanced in its documentation and mitigation planning for environmental assessment, its design and positioning for mine and materials handling facilities are being done with environmental considerations and local opportunities, and it has engaged with stakeholders throughout its project work, it is not expected that there will be extensive legal, political, environmental or other issues that could materially affect the potential development.
The estimate was audited, verified and restated by independent Qualified Person L. Roberts, MAusIMM(CP) of SRK for the PEA.
Mineral Resources that are not mineral reserves do not have demonstrated economic viability.
Historical drilling at Olza had also identified zinc-lead mineralization in a number of other areas on the property. Although drilling in these areas was commonly done on irregular or widely-spaced grids, this historical information, coupled with the results of Rathdowney's drilling, highlights the excellent potential to add mineral resources through further work.
Silver was not analyzed during historical drilling, and so was not estimated in the initial mineral resource. However, results from Rathdowney's drilling indicate the presence of important concentrations of silver within the mineralization, which has the potential to add value to Project Olza.