Broken Hill Potosi

The Potosi project, located approximately two kilometres north of the existing North Mine at Broken Hill, currently contains a mineral resource of 1.6 million tonnes at 13.0 per cent zinc, 3.1 per cent lead and 43.1 g/t silver.

The mineral resource includes two mining zones – Potosi North and Potosi Extended, and these represent approximately 50 per cent of the targeted mineralised zones along strike.

geology

The Potosi resource comprises several narrow, ribbon like lenses that can be traced almost continuously from near the base of the Potosi Pit to north of the Flying Doctor deposit.  The mineralisation is typically high grade mainly zinc lodes with lesser lead lodes. 

The mineralisation displays characteristics of being stratiform and structurally emplaced. The mineralised lodes are typically high grade with a very sharp contact with essentially no halo of low grade mineralisation.

development

Perilya is undertaking the staged development of Potosi.  This follows completion of a pre-feasibility study and receipt of state and local government approvals for the project to proceed.

Construction of the Potosi exploration decline to access high grade material commenced in January 2007.

The Potosi exploration decline had advanced to more than 1000 metres beyond the portal entrance by the end of the December 2007 quarter.  Key equipment has been delivered, the workforce appointed, the surface infrastructure is in place and raise boring of the first ventilation shaft is complete.

Ore production has commenced, heralding the third underground ore source to the concentrator.

A drilling campaign is targeting extensions to the existing 1.6 Mt resource beyond Potosi Extended and in the gap between Potosi North and Potosi Extended.

looking forward

The ongoing development costs to the base of the ore body are likely to be a self funded exercise. As a third source of ore within striking distance of the existing under utilised processing facility at Broken Hill, Potosi provides considerable options value.    It is anticipated that the combined ore feed from the North Mine and Potosi will be approximately 90,000 tonnes in the second half of the FY2008, ramping up to approximately 350,000 tonnes in FY2009.

The Potosi resource is open in a number of directions and contained within a total mineralised zone approximately three kilometers in strike length.   Perilya is targeting a resource along the Potosi strike of over 4 million tonnes at 10-12 per cent zinc and 3-5 per cent lead and 40-50 g/t silver.