PEM reports increase in resources and ore

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    Perilya reports increase in Broken Hill mineral ore resources and ore reserves

    Perilya (ASX:PEM), the New South Wales zinc, lead and silver miner has revealed the updated 2009 Ore Reserve and Mineral Resource statement for its Broken Hill Operation.

    The company said that its Ore Reserves had increased by 28% to 12.86 million tonnes containing 6.0% zinc, 4.5% lead and 48 g/t of silver and its Mineral Resource by 8% to 20.86 million tonnes containing 9.4% zinc, 7.4% lead and 92 g/t of silver, as at 30 June 2009.

    The news led shares in the company to increase slightly to 50c.

    Importantly, the Ore Reserves and the mining plan associated with this Reserve, establish a production life at the Southern Operations at current mining rates of over ten years.

    In addition, significant Mineral Resources outside of the reported Ore Reserve could be converted to Ore Reserves at a later date; providing further opportunity to extend the life of mine at Broken Hill.

    The security of the Ore Reserves has increased as a result of continued improved operational performance and improved net revenue now received for silver as a result of the silver transaction completed in July.

    Perilya managing director Paul Arndt said the Ore Reserve and Mineral Resource increase was validation that Broken Hill remained a world-class asset and would be a significant base metals producer for a long period of time.

    Last year Perilya set itself two tasks with the release of the Reserve and Resource statement," Mr Arndt said.

    "These were to reduce our net cash costs to under US$.60 per pound and to mine in a sustainable way to replace Ore Reserves as we mined.

    "I am pleased to report that with the achievement of a net cash cost for the September quarter of US$.38 per pound and the addition of 28 % to the reserve base we have well and truly achieved these goals."

    He said all the hard work over the past twelve months to lower operating costs, increase productivities and get better recognition in the pricing for the company's full metals suite gave him confidence about its long term future.

    "Our task going forward is to ensure this improvement is sustained and to sensibly progress the expansion opportunities that lie before us at Broken Hill," Mr Arndt said.

    Since Perilya acquired the Broken Hill deposit in 2002 a total of 12.9 million tonnes of ore has been mined containing 1.3 million tonnes of contained zinc and lead.

    The Ore Reserves have been consistently replenished through classification of areas as economic during development planning and Resource extension drilling.

    Further evaluation of additional target areas for potential inclusion in the resource is underway.

    The company expects a decision on the studies of some expansion projects for Broken Hill will be ready by early next year.

    Perilya is targeting combined production of 120,000-130000 tonnes of contained zinc and lead per annum and 1.6 million to 1.7 million ounces of silver per annum.

    http://www.proactiveinvestors.com.au/companies/news/3257/perilya-reports-increase-in-broken-hill-mineral-resources-and-ore-reserves-3257.html

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