New Pacific Holdings Corp. (“New Pacific” or the “Company”) acquired the RZY early stage silver-lead-zinc project in April 2013. Located in Qinghai Province, China, approximately 237 kilometres via paved and gravel roads from the capital city of Yushu, Tibetan Autonomous Prefecture, the Project is situated on a high plateau with an average elevation of 5,000 metres above sea level.
New Pacific owns 100% of Fortress Mining Inc. (“FMI”), a private company. The Project is FMI’s primary asset. The Company made an initial payment of US$3.5 million to acquire FMI from Silvercorp Metals Inc. (“Silvercorp”), less 20% of its participating interest in the project. Pursuant to the terms of the agreement New Pacific had an option to acquire the remaining 20% participating interest within two years for an additional payment of US$5 million, but such option has since lapsed. Please see our news release dated December 21, 2012 and April 8, 2013 for further information about the transaction.
In 2007 FMI and the Qinghai Geological Survey Institute (“QGSI”) established a Sino-Foreign Co-Operative Company; Qinghai Found Mining (“QFM”), with a term of 30 years. FMI owns an 82% interest and QGSI owns an 18% carried interest in QFM. Currently, QFM’s assets consist of approximately US$2.0 million in net cash and a 67% interest in the Project. In April 2011, QFM entered into an exploration agreement with its shareholder, QGSI to jointly explore the Project. To date, FMI has invested US$3.5 million in QFM and QFM has spent US$1.5 million on exploration and development expenditures on the Project.
Known mineralization of the Project is silver-lead-zinc veins controlled by altered structure zones developed in the lower Permian marine clastic sediments. Multiple silver-lead-zinc mineralized zones hosted in an altered structure zone with a strike extent of 6.5 kilometres and width of 25 to 100 metres have been identified by historical surface work conducted by QGSI including trenching, pitting, geology mapping and geophysics surveying. The geochemical profile indicated that the silver-lead-zinc mineralization is likely in situ and not floats of dispersion from sources in the surrounding mountainous area. The soil geochemical anomaly also indicated there could be another mineralized zone to the north in a flat area about one kilometre from the mountains.
In 2006, Silvercorp retained Golder Associates Ltd. (“Golder”) to complete a National Instrument 43-101 (“NI 43-101”) report on the Project and it conducted a site visit between October 15 and 25, 2006. Samples taken by Golder from trenches and shallow pits are listed in Table 1 below. The results indicate that silver-lead-zinc mineralization exists at RZY.
Table 1 Assay Results of Check Samples by Golder
|Sample #||Location||Ag (g/t)||Pb (%)||Zn (%)||Description|
|327||5.28||1.33||grab sample, disseminated sulphides|
|―||―||―||grab sample, wallrock|
|RZY001||TC1||836||17.18||15.33||grab sample, disseminated sulphides|
|RZY002||QJ2||105||2.2||4.5||grab sample, wallrock|
|RZY003||TC2||3,015||17.64||11.93||grab sample, disseminated sulphides|
|RZY004||QJ1||723||1.49||0.29||grab sample, wallrock|
In 2011 Silvercorp, acting through QFM and QGSI, conducted surface geology mapping and an induced polarization (“IP”) geophysical survey program. The IP survey commenced along the western portion of the 6.5 kilometre long mineralized zone and was completed in 2012. The survey results indicate the existence of an area of high polarization to the north of the altered structured zone, and a separate minor zone of high polarization to the south. These high polarization areas may be related to mineralized alteration zones at depth.
In 2012, seven trenches were completed by QFM. Silver-lead-zinc mineralization was identified in all trenches. The mineralization is characterized by lead-zinc sulphides and pyrite as well as oxides such as litharge and limonite. The galena is blocky or massive and is associated with quartz-carbonate veins. The width of lead-zinc mineralization exposed in trenches ranges from a few metres to more than 10 metres with individual galena-quartz veins of a few centimeters to half a meter wide. Assay results from the trenches completed in 2012 confirmed the presence of high grade silver-lead-zinc mineralization as indicated by historical results (see Table 2 below). The assay results of the new trenches are shown together with the historical results in Table 2. High grade silver is mostly associated with high grade lead and zinc which is the case of blocky or massive lead-zinc sulphides with quartz veins, but some high grade silver intervals contain relatively low values of lead and zinc, which may mean there are multiple distinct variations of mineralization.
Table 2 Assay Intervals of Trenches and Pits
|Section||Trench/Pit No.||Interval (m)||Ag (g/t)||Pb (%)||Zn (%)||Note|
“QJ”- shallow pit
Historical assay results were analyzed by the Qinghai Geological Central Laboratory
Silvercorp’s historical assay results were analyzed by SGS labs in Tianjin, China
To test the depth potential of the mineralization exposed by surface workings, over 890 metres in five drill holes were drilled in 2012. Multiple altered structure zones with narrow galena-quartz veins were hit in holes, but no massive or blocky lead-zinc sulphide quartz veins, as observed in the trenches on surface, were intercepted. Although assay results of drill cores indicated the mineralization occurs in the major east-west structural zones in the Permian clastic sediments and is continuing at depth (see Table 3 below), the width and grades of drill intercepts are inferior to the results of the surface trenches and pits. However, given the strike extent of the mineralization, and the high-grade nature of the silver-lead-zinc mineralization indicated by samples from the trenches and pits, New Pacific believes there is enough evidence to support the transaction and justify continued drilling at the Project in 2013.
Table 3 RZY Drill Intercepts 2012
|Section||Hole_Id||From (m)||To (m)||Interval (m)1||Ag (g/t)||Pb (%)||Zn (%)|
|24||ZK2401||no significant results|
|note: assay results were analyzed by SGS labs in Tianjin, China|
The 2013 Exploration Program
The 2013 drilling program at the Project intersected significant silver-lead-zinc-antimony-copper-tin mineralization in two mineralization zones: the known main mineralized structure zone (“Zone 1”) was discovered by historical exploration; and a new mineralized structure zone (“Zone 2”, previously a target of interest based upon its soil geochemical anomaly), was confirmed this year by surface trenches and drilling to the depth. The new zone is located about 300 metres to the north of, and parallel to, the main zone. Highlights of the most prominent drill results for each zone include (note - widths are core length not true widths):
The assay results are summarized in Table 1 below. Mineralization style of Zone 1 and Zone 2 are similar and both zones are hosted by altered shear structures developed in Permian turbidite sediments and are generally characterized by massive and disseminated sulfides of galena-sphalerite-pyrite in altered sandstone and dacitic dykes. The 2013 drilling program covered only a two-kilometre long section of the entire six kilometre long known mineralized zones on a drill grid of one hundred metres by two hundred metres, aiming to test the size and nature of the silver-lead-zinc mineralized structure and to confirm the assay results of historical trenching and drilling. With successful drill results of 2013 the Company believes that the Project may have the potential of hosting significant silver dominated polymetallic resources, and the Company plans to commence resource definition drilling at the known mineralized Zone 1 and Zone 2, and, in addition, plans to continue with regional exploration to identify more mineralized zones at other prospects of the Project during the 2014 field campaign.
Table 1: Assay results
For further details see news release of January 14, 2014.
Randy Cullen, P.Geo., is the Qualified Person on the Project as defined under National Instrument 43-101. He has reviewed and approved the contents of this webpage.
Last updated January 4, 2016.