Southern Hemisphere Mining Ltd
- ASX Code: SUH
- Market Cap: $25.0M
- Shares on Issue (SOI): 736,240,044
- Cash: $2.95M (as of 31 December 2024)
Southern Hemisphere Mining Ltd (ASX: SUH) Advances Llahuin Copper-Gold-Molybdenum Project with Promising Drill Results
Summary of the Announcement
Recent exploration efforts by Southern Hemisphere Mining Ltd at the Llahuin Copper-Gold-Molybdenum Project in Chile have yielded encouraging results that suggest significant potential for resource expansion. The 2024 reverse circulation (RC) drilling program encompassed 2,728 metres across 26 holes, revealing noteworthy intercepts:
- 128m @ 0.41% CuEq from 16m, including 32m @ 0.57% CuEq (hole 24LHRC067).
- 30m @ 0.42% CuEq from surface, plus 26m @ 0.56% CuEq to end-of-hole (24LHRC068).
These findings build upon earlier impressive results such as:
- 105m @ 0.64% CuEq from surface (24LHRC065).
- 132m @ 0.48% CuEq from surface (24LHRC058).
Importantly, several holes terminated while still within mineralisation, indicating the possibility of resource continuity at greater depths. The company plans to commence diamond drilling in the first half of 2025 to further explore these deeper mineralised zones. The strike length of the Cerro-Ferro system has increased by 15%, now extending over a continuous 2.2 kilometres and remaining open to both the north and south.
Why Is the Llahuin Project a Strategic Asset for Southern Hemisphere Mining?
The Llahuin Project is strategically located in Chile's Coquimbo region, an area renowned for its prolific copper production. This advantageous positioning, along with the project's resource characteristics, underscores its development potential.
Chile's Copper Dominance
Chile is the world's leading copper producer, accounting for approximately 28% of global output. The country's stable mining jurisdiction, well-developed infrastructure, and favourable regulatory framework provide an ideal environment for mining operations. In recent years, Chile has been at the forefront of copper smelting innovations, enhancing its global competitiveness. Moreover, Chile's prominent position among the top copper-producing nations underscores the strategic importance of projects like Llahuin.
Proximity to Key Projects
Llahuin is situated just 8 kilometres east of the El Espino copper-gold project, which is currently under development by Pucobre and Resource Capital Funds. El Espino serves as a significant benchmark for Llahuin's potential, considering its planned open-pit mining design and substantial investment of $490 million. The success of El Espino reinforces confidence in the region's mineral endowment and infrastructure.
Long-Term Growth Potential
With near-surface mineralisation, Llahuin offers the prospect of cost-efficient open-pit extraction in the initial stages. The deeper mineralised zones suggest opportunities for underground mining as the project advances. The project's easy access to major infrastructure—including roads, power lines, and local water sources—further enhances its development prospects.
What Sets the Recent Drilling Activity at Llahuin Apart?
The 2024 RC drilling program has delivered robust copper-gold grades and demonstrated broader and more consistent mineralisation than previously recognised.
High-Grade Results
Standout intercepts such as 105m @ 0.64% CuEq from surface (24LHRC065) and 128m @ 0.41% CuEq from 16m (24LHRC067) highlight significant grades over extensive intervals. These results suggest that the mineralisation is both substantial and continuous, which is favourable for large-scale mining operations.
Mineralisation at Depth
Several drill holes concluded while still in mineralised zones, underscoring the potential for additional resources at depth. The upcoming diamond drilling, scheduled for Q1 and Q2 of 2025, aims to extend these findings and confirm the continuity of mineralisation.
Water Discoveries
Groundwater was encountered between 40 metres and 60 metres in multiple holes, with one test indicating a flow rate of 40 litres per minute. Although the water is not potable, its quality appears suitable for future operational needs. This onsite water availability could reduce operational costs and logistical challenges associated with water sourcing.
Technological Advancements in Exploration
Utilising advanced geophysical techniques, including an almost completed magneto-telluric (MT) survey, Southern Hemisphere Mining is refining its exploration targets. Such technologies enhance subsurface exploration accuracy, potentially leading to more efficient and successful drilling campaigns. Innovations similar to revolutionary hybrid drilling rigs are transforming the way companies approach mineral exploration, improving both efficiency and environmental impact.
How Does Llahuin Compare Economically?
Economic factors are pivotal in assessing the viability of a mining project. Llahuin's geological profile, favourable jurisdiction, and proximity to operational mines contribute positively to its economic prospects.
Low Strip Ratio Potential
The presence of shallow mineralisation reduces the need for extensive waste removal, leading to a lower strip ratio. This directly translates to reduced operational costs in open-pit mining scenarios, improving the project's profitability.
Regional Infrastructure
Llahuin benefits from established infrastructure, including nearby roads, power lines, and water sources. This reduces the upfront capital expenditure required for mine development. The existing infrastructure also facilitates easier access for personnel and equipment, enhancing operational efficiency.
Regional Precedents
The success of neighbouring projects like El Espino demonstrates the viability of copper-gold projects in the region. El Espino's planned annual production of 26,000 tonnes of copper and 13,000 ounces of gold, backed by a $490 million capital expenditure, underscores the confidence investors have in the Coquimbo region's mining potential.
Geological Context: Why It Matters
Understanding the geological setting is crucial in evaluating a mining project's long-term potential.
Porphyry Copper-Gold-Molybdenum System
Llahuin is characterised as a porphyry copper-gold-molybdenum system. Porphyry deposits are among the most significant sources of copper and often host large, low-grade but bulk-minable ore bodies. These deposits can support mining operations for several decades. For a deeper understanding of such deposits, exploring the formation and economic impact of porphyry and epithermal deposits can provide valuable insights.
Mineralised Zones and Geometry
Recent drilling has revealed consistent mineralisation, often remaining open at depth. The broad halos of moderate-grade mineralisation surrounding higher-grade zones offer potential for selective mining strategies. The continuous 2.2-kilometre strike length, with documented expansions, demonstrates both continuity and growth potential, enhancing the project's attractiveness.
Analysis of Recent Results and Their Implications
The 2024 drilling results align with earlier resource expansion estimates at Llahuin, reinforcing the project's potential.
Strike Expansion
The expansion of the Cerro-Ferro system by 300 metres brings the total strike length to 2.2 kilometres, with the mineralisation remaining open-ended to the north and south. This suggests that further exploration could uncover additional resources, increasing the project's scale.
Economic Feasibility Strengthened
The discovery of onsite water and the confirmation of relatively shallow resource bases improve the project's logistical and cost profiles. These findings enhance the economic feasibility of developing Llahuin into a profitable mining operation.
Advanced Geophysical Insights
The near-completion of the MT survey is expected to finalise deeper drill targets, providing more precise data for future drilling. These advanced geophysical insights can lead to more efficient drilling programs and potentially significant resource additions.
Future Plans and Timelines
Southern Hemisphere Mining has outlined a comprehensive exploration and development plan for 2025:
- Diamond Drilling: Extension of 2024 RC drilling through diamond tails in Q1 and Q2 to probe deeper mineralised zones.
- Geophysical Integration: Utilisation of MT survey data to strengthen exploration targeting and resource delineation.
- Step-Out Drilling: Ongoing exploration of strike extensions at both ends of the Cerro-Ferro system to uncover additional resources.
- Economic Studies: Continued refinement of mining studies, incorporating logistical factors such as onsite water availability and infrastructure readiness.
These planned activities are expected to enhance the resource estimate and contribute to the project's overall development strategy.
Investment Thesis
Llahuin presents a compelling investment opportunity, aligning with the increasing global demand for copper driven by decarbonisation and electrification trends. With major industry players like Rio Tinto boosting investments in copper and clean energy by 2025, the outlook for copper remains robust. Key investment highlights include:
- Scalability: The project's large, shallow deposits are suitable for open-pit mining, with potential for underground mining at deeper levels.
- Strategic Location: Situated in a region with extensive mining activity, excellent infrastructure, and supportive regulatory frameworks.
- Data-Driven Exploration: The integration of drilling results, geophysical surveys, and hydrogeological studies enhances the confidence in resource estimates.
- Regional Confidence: The success of neighbouring projects like El Espino reinforces investor confidence and highlights the region's appeal.
Compelling Summary: Why Follow Southern Hemisphere Mining
Southern Hemisphere Mining's continued success at Llahuin, evidenced by robust drilling results and an active exploration program, positions the company favourably within the copper-gold sector. With further studies and drilling campaigns planned to de-risk the asset, Llahuin represents an attractive opportunity for investors interested in capitalising on copper's long-term potential.
The project's alignment with global trends towards sustainable energy and electrification, coupled with its strategic location and promising geological features, makes it a noteworthy asset in Southern Hemisphere Mining's portfolio. As the company advances its exploration and development efforts, stakeholders can anticipate significant milestones that could enhance shareholder value.
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