Inmet Mining’s Balboa zone excites the market

A high-grade intercept of 124 metres of 2.32% copper and 2.28 grams gold per tonne in the Balboa zone at Inmet Mining‘s (IMN-T) Cobre Panama project is making Balboa a “contender” UBS Investment Research associate analyst Matt Murphy wrote in a research note to clients.

“Mining access to the Balboa zone is likely a considerable time away, and the pit is still not part of the initial mine plan,” Murphy writes. “We have already assumed above reserve grade mining from Balboa, however if further drilling proves Balboa to be a higher-grade ‘feeder’ system to Cobre Panama, it could radically alter the project’s potential.”

Other highlights from the latest 12 holes include 199.5 metres of 0.95% copper and 0.43 gram gold included in a broader interval of over 363.9 metres of 0.65% copper and 0.26 gram gold.

After a total of nineteen drill holes so far, the deposit remains open to the west and Inmet’s president and chief executive Jochen Tilk noted that the drill results so far “demonstrate that the geologic system which contains Cobre Panama is capable of producing high-grade mineralization.”

“Cobre Panama already represents a world-class deposit expected to commence construction in less than 12 months,” he continued in his statement. “The addition of the Balboa discovery and potentially other targets endorse our view of the outstanding potential for Cobre Panama to become one of the world’s largest copper producers.”

Inmet has earmarked $9 million for drilling this year with four rigs and an additional two rigs that are capable of deeper holes are on the way, the company says.

The company plans to drill another 20,000 metres to test the margins at 200-metre centers, with infill drilling on 100 metre centers.  It has also started metallurgical work. The Balboa discovery covers an area of 1,000 metres by 800 metres and remains wide open to the west, northwest and southwest.

Colin Burge, Inmet’s senior geologist, notes the drill results from Balboa suggest “potential that we haven’t seen before” and says that the 124 metres of 2.32% copper found in drill hole number ten could “represent the deeper, higher grade roots of Cobre Panama.”

“Looking at Hole 10, the very high bornite content as veins and disseminations and the lack of iron pyrite suggest that we may be starting to find the core of a quality system,” he outlined in a press release announcing the results.

Inmet expects the Cobre Panama open pit to produce 289,000 tonnes of copper and 108,000 ounces of gold per year during the first sixteen years of a thirty-year mine life. Cobre Panama contains measured and indicated resources of 3.27 billion tonnes grading 0.36% copper, 0.06 gram gold and 0.007% molybdenum.

Shares of Inmet surged 3.98%  or $2.66 to close at $69.50 per share with 1.1 million shares trading hands following news of the assay results on May 31.

Inmet closed at $70.83 per share on June 3 and Murphy of UBS Research has a 12-month target price on the stock of $75.