Filo Mining’s (TSX: FILO) ongoing drilling program at its Filo del Sol copper project in Argentina has extended the strike length of the emerging Aurora zone to 1.6 kilometres.
The Vancouver-based company, part of the Lundin Group, has released the results from two more holes which extend the zone by 180 metres.
Hole FSDH061 intersected 701.2 metres of 1.13% copper equivalent (0.81% copper, 0.33 gram gold per tonne and 9.1 grams silver per tonne), including 406 metres grading 1.36% copper equivalent (0.97% copper, 0.4 gram gold and 11.1 grams silver) from 508 metres.
The company said in a news release that a technical issue cut the hole to a depth of only 1,093 metres, with the last 21 metres returning 1.03% copper equivalent within a veined and potassically altered porphyry.
Hole FSDH063 returned 844.2 metres of 0.53% copper equivalent (0.29% copper, 0.25 gram gold and 6.5 grams silver), including an interval of 142 metres grading 0.71% copper equivalent (0.36% copper, 0.26 gram gold and 18.1 grams silver). Mineralization is believed to be continuous between the holes reported, with the Aurora zone remaining open to the north and south.
“As we ramp up drilling into the South American spring and summer, we will continue a combination of larger step-out holes to try to find the edges of the mineralized system, along with step-out and infill holes to try to define the size of this remarkable Aurora Zone fully,” said CEO Jamie Beck.
The company also reported it was forced to halt drilling for a period due to the harsh winter experienced in the Andes, with heavy snowfalls and strong winds impacting operations since June. Drilling is ramping up with six rigs operating and two additional rigs expected to be added in September.
Drilling targets a combination of large step-out holes focusing on the system edges and step-out and infill holes on the Aurora Zone.
The program could potentially see up to 11 rigs turn later in the season, which would enable 40,000 metres of drilling completed in the next twelve months, noted Haywood Capital Markets analyst Geordie Mark in a memo to clients.
“We see value potential arising not only from the exploitation of the defined resource but also from the incremental resource expansion, as well as the discovery potential of the high-grade copper-gold-silver mineralization to depth as well as within satellite occurrences within proximal alteration systems, and the discovery potential from distal porphyry-related alteration systems,” wrote Mark.
Canaccord Genuity Capital Markets analyst Dalton Baretto also sees the news in a “modestly positive” light, adding that while no drilling exists between holes 61 and 60 along strike at this time, management has indicated that three holes between the gap further to the west (FSDH037, 43 and 51), all showed mineralized profiles typical of the edges of the system.
“As such, there appears to be a reasonable probability that the Aurora zone could extend all the way to the Bonita zone. That said, we note that Hole 61 did not intercept any of the ultra-high-grade mineralization associated with the breccia around holes 41 and 55C,” wrote Baretto in a note to clients.
He adds that with management still focused on trying to find the edges of the Aurora system and develop a geological model, there is currently no timeline on an initial resource for the zone.
BMO Capital Markets analyst Rene Cartier said the extension of the Aurora Zone, and its high grade continued to highlight the remaining exploration potential at Filo del Sol, with further planned deper drilling set to test for more high-garde porphyry material. BMO expects Filo’s equity to outperform with a price target of $30 per share.
On Wednesday, Filo’s Toronto-quoted shares last traded at 18.33, giving it a market capitalization of $2.2 billion. The stock has gained 106% over the past 12 months.