EuroZinc hits impressive grades — Infill drilling program boosts potential of Aljustrel

Infill drilling at the Feitais deposit, part of the formerly producing Aljustrel property in southern Portugal, continues to intersect zinc grades that are significantly higher than prefeasibility estimates.

EuroZinc Mining (EZM-V) holds a 75% interest in the massive sulphide deposit, with the remainder held by the Portuguese state.

The drill results have also expanded a recently discovered copper zone by about 240 metres along strike to the southeast. The holes were drilled on 50-metre centres.

Highlights are as follows:

• Hole FS-37 intersected 24.2 metres averaging 0.11% copper, 2.08% lead and 6.36% zinc, as well as 0.67 gram gold and 76.18 grams silver per tonne, starting at a down-hole depth of 263.5 metres (all intercepts are reported as true widths). This was followed by a 4.6-metre interval of 3.03% copper, 0.04% lead, 0.18% zinc, 0.81 gram gold and 14.28 grams silver starting at a down-hole depth of 302.8 metres.
• Hole FS-38 cut 14.6 metres averaging 0.09% copper, 2.59% lead, 7.29% zinc, 1.37 grams gold and 113.34 grams silver, starting at 234.6 metres down-hole. This was followed by a 10.77-metre section grading 1.01% copper, 0.04% lead, 0.12% zinc, 0.07 gram gold and 4.77 grams silver, starting 272.75 metres down-hole.
• Hole FS-39 intersected 3.6 metres averaging 0.06% copper, 2.27% lead, 3.18% zinc, 0.37 gram gold and 50.79 grams silver, starting at 323 metres down-hole.
• Hole FS-40 cut 23.1 metres averaging 0.16% copper, 2.26% lead, 6.52% zinc, 1.05 grams gold and 88.91 grams silver, starting at a down-hole depth of 237 metres.

Slightly more than half of the 12,000-metre drill program has been completed. EuroZinc reports that two surface drills are delineating the Feitais deposit and that underground drilling has just started on the nearby Moinho deposit. The feasibility study is on schedule and due for completion by year-end.

Meanwhile, the company has inked a deal with Resource Capital Fund for a US$4-million convertible loan facility. An initial tranche of US$1 million will be put towards the Aljustrel feasibility study. Resource Capital is managed by Continuation Investments, a firm associated with Europe’s Rothschild family.

The loan will mature on Dec. 31, 2002, and will have an interest rate of 1.5% over the London Interbank Offer Rate. It is to be paid semi-annually in cash or shares of EuroZinc. The company can prepay the outstanding balance of the loan at any time.

Money drawn down from the loan can be converted into shares of EuroZinc during the second and third years at 40 cents and 50 cents, respectively. Thereafter, the price rises to 60 cents until the loan matures.

EuroZinc recently appointed Ryan Bennett, a vice-president of Resource Capital, to its board of directors.