Deep hole boosts Lewis Ponds potential

Recent drilling at the Lewis Ponds polymetallic project in southeastern Australia has extended the mineralized zone downdip and tripled the reserve potential, reports 100%-owner Tri Origin Exploration (TSE).

Hole TLPD-12, the best drilled to date, intersected 30 metres grading 4.27 grams gold per tonne, 151 grams silver, 7.16% zinc, 4.65% lead and 0.21% copper. TLPD-12 hit the massive sulphide zone at 450 metres below surface and 140 metres below the next-deepest intersection in Hole TLPD-6. Tri-Origin President Robert Valliant says the latest results indicate that both the grade and thickness of the gold-rich deposit are increasing with depth, where the zone is wide open.

Investors responded positively to the news, pushing Tri Origin up 25 cents to $1.05 on the day of the release.

Based on results of a dozen holes, Tri Origin has calculated a “geological mineral inventory” of 4.8 million tonnes grading 3.52 grams gold per tonne, 116 grams silver and 4.94% zinc, up from 1.5 million tons in March. The estimate includes a higher-grade portion of 2.4 million tonnes grading 5.79 grams gold, 162 grams silver and 6.3% zinc.

“Based on the market capitalization of companies with similar deposits, Tri Origin appears to be undervalued,” says James Pearson of Thomson Kernaghan and Company.

He uses Redfern Resources (TSE) as a loose comparison. Redfern has outlined mineable reserves of 7.7 million tons grading 1.4% copper, 1.07% lead, 6.42% zinc, 2.4 grams gold and 100 grams silver at its Tulsequah Chief deposit in British Columbia (see “Redfern arranges $5-million financing,” page 3). The company’s market capitalization is about $42 million whereas Tri Origin’s is less than $6 million.

Although the confidence level of reserves at Tulsequah Chief is much higher than at Lewis Ponds, Pearson believes Tri Origin could prove up a similar deposit with further drilling.

Valliant says the biggest surprise is the amount of gold in the deposit. “We originally thought there would be a gold credit, but now we see it as a gold deposit with associated base metals.”

Hole TLPD13, which tested the near-surface boundary of the deposit, intersected two metres grading 2.67 grams gold, 24 grams silver and 4% zinc at a depth of 90 metres. Results of Hole TLPD-14, together with three reconnaissance holes drilled on targets south of Lewis Ponds, will be reported when available.

The 20-metre-thick, stratabound deposit has been tested for 225 metres along strike and 400 metres downdip and remains open at depth. Massive to disseminated mineralization lies at the contact between Silurian-aged (Paleozoic) felsic volcanics and sediments.

“This deposit lies somewhere between a Bousquet No. 2 (a gold-rich massive sulphide deposit in northern Quebec) and a more typical felsic-hosted massive sulphide,” says Valliant, who directed the initial exploration program at Bousquet for Lac Minerals (TSE).

Valliant and the late Dennis Sheehan, former senior vice-president of exploration for Lac, formed Tri Origin in 1989 and made their first public offering at the beginning of 1992.

Several Australian companies have scoured the package of felsic volcanic rocks around Lewis Ponds property, but most of the past drilling tested the stratigraghpy to a depth of only 100 metres.

The next drill program at Lewis Ponds will continue to test the downplunge and downdip potential of the zone.

“We plan to keep going to establish the eyes, ears and body of the thing,” says Valliant.