Filo Mining reports ‘highest-grade copper’ to date from Filo del Sol  

Shares of Filo Mining (TSX: FIL) rose to their highest in May as the company reported high-grade assay results from the Breccia 41 zone of its 100%-controlled Filo del Sol project in South America. 

Highlights from Filo del Sol, which straddles the Argentina-Chile border, included drillhole FSDH057, which cut 289.1 metres grading 1.18% copper, 0.68 gram gold per tonne and 36 grams silver starting from 498 metres, and 11.1 metres grading 9.11% copper, 8.87 grams gold and 230.4 grams silver starting from 776 metres.  

“Hole 57 extends the bonanza-grade Breccia 41 mineralization another 175 [metres] to the north,” the company’s CEO Jamie Beck said in a press release. “Prior to reaching target depth, the hole ended in the highest-grade copper we’ve ever reported at Filo del Sol.”  

The Filo del Sol project is comprised of two adjacent land holdings: the Filo del Sol property in San Juan Province, Argentina, and the Tamberias property in Region III, Chile. The project area is covered under the Mining Integration and Complementation Treaty between Chile and Argentina, which provides the framework for the development of cross-border mining projects.  

Based on a 2019 prefeasibility study, which used prices of US$3 per lb. copper, US$1,300 per oz. gold, and US$20 per oz. silver, it has an estimated after-tax value of US$1.3 billion at an 8% discount rate, with an internal rate of return of 23%.  

The asset is expected to produce an annual average of 67,000 tonnes of copper, 159,000 oz. gold and 8.7 million oz. silver over a mine life of 14 years. The study pegged the project’s initial capital cost at US$1.27 billion.  

Wide-spaced drilling over the past two years led to the discovery of the high-grade Aurora zone. A section within that zone, named Breccia 41, was found to have “distinguishably elevated grades” last year after its discovery hole FSDH041 returned 163 metres at 5.43% copper equivalent (2.31% copper, 2.07 grams gold per tonne, and 183 grams silver) from a depth of 780 metres.  

The ongoing drilling program includes seven diamond drill rigs and a reverse-circulation rig and has been designed to explore the area around the FSDH041 drill hole.  

The company expects to continue drilling throughout the year, Trevor D’Sa, Filo’s VP of corporate development and investor relations, told The Northern Miner in an email. “The focus will be on drilling for the foreseeable future and defining the edges of this remarkable deposit,” he replied when asked when Filo intends to release the project’s feasibility study. 

In February, BHP (NYSE: BHP; LSE: BHP; ASX: BHP) invested $100 million in Filo Mining and in the process ended up owning 5% of the company. Lundin Mining (TSX: LUN) is Filo’s majority owner.  

Scotiabank analyst Eric Winmill described the company’s latest update as “impressive” and its results as positive for FIL shares. 

  “Filo remains well-funded for year-round exploration following the $100 million equity financing from BHP,” he wrote in a research note to clients. 

Haywood Securities analyst Geordie Mark believes that Filo had expanded the project beyond expectations due to the drillhole.  

“With one simple hole, FSH057, has changed the paradigm of system knowledge again and unleashed both unprecedented grade for the system,” Mark wrote in a research note to clients.  

“We see value arising not only from the [prefeasibility], but also from resource expansion, and further discovery potential on the property. We believe the resource base and grade potential of the system holds ample value for M&A interest,” he added.  

At mid-day in Toronto, Filo Mining was trading at $20.79, up $4.17or 25.09%, within a 52-week trading range of $4.05 and $24.81. The company has 121.4 million common shares outstanding.