Pinnacle boosts Silver Coin resource

Vancouver – A preliminary economic analysis of Pinnacle Mines‘ (PNL-V) Silver Coin project in northwest British Columbia has increased the project’s gold count while highlighting the “excellent potential” that the deposit will continue to grow.

The new study used data from 714 drill holes totalling almost 86,000 metres to calculate a new resource estimate for the gold-silver-zinc sulphide deposit. The project is now home to 12.3 million measured and indicated tonnes grading 1.89 grams gold per tonne, 8.04 grams silver per tonne, and 0.32% zinc, plus 15.3 million inferred tonnes averaging 1.52 grams gold, 8.43 grams silver, and 0.3% zinc, using a cut-off grade of 0.75 gram gold. When the cut-off grade is lowered to 0.25 gram gold, the measured and indicated resource climbs to 27.3 million tonnes grading 1.1 grams gold, 6.33 grams silver, and 0.23% zinc while the inferred count grows to 49.2 million tonnes grading 0.76 gram gold, 6.6 grams silver, and 0.22% zinc.

According to the study, the Silver Coin project carries a net present value (NPV) of US$58.3 million, using a 10% discount rate and a gold price of US$850 per oz. Increasing the gold price to US$900 per oz. brings the NPV to US$88.5 million. The project would utilize sulphide flotation followed by a cyanide leach circuit to produce a directly saleable gold-silver dore.

“There is excellent potential to grow the Silver Coin resource,” wrote the independent authors of the Silver Coin report. The resource remains substantially open to the north and northwest and many of the best intercepts in recent drilling come from the north end of the deposit. While topography and rock conditions suggest that drilling costs will be higher in some areas of the north, drilling on the northern third of the deposit has been extremely productive to date, yielding approximately 400,000 ounces of gold per 100 metres of strike.”

Two years ago three companies held ownership stakes in the Silver Coin project. Since then Pinnacle has been working to consolidate ownership. In mid-2008 the company acquired the 40% stake in the key claims at Silver Coin owned by Tenajon, now part of Creston Moly (CMS-V), by handing over 13.5 million shares in exchange. A year later Pinnacle upped its interest to 70% by paying co-owner Mountain Boy Minerals (MTB-V) $440,000. The companies also agreed Pinnacle can increase its stake to 80% by spending another $4 million on exploration; Pinnacle can also now negotiate on behalf of both partners with any interested parties.

The project lies 25 km north of Stewart.

Pinnacle’s share price gained 1¢ on news of the new Silver Coin resource to close at 16.5¢. The company has a 52-week trading range of 3¢ to 36¢ and has 92 million shares outstanding.