The Thomson Resources Ltd (ASX: TMZ) share price rallied on Wednesday after the miner posted an update on its Conrad Project.
The miner and its technical consultants have identified significant exploration potential at its silver project.
The Thomson Resources share price jumped 7.7% to close the day at $0.14 when the S&P/ASX 200 Index (Index:^AXJO) fell 0.3%.
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Conrad fires up the Thomson Resources share price
The miner said that Conrad is historically the largest silver producer in the NSW section of the New England Fold Belt.
The area's historic production of 3.5 million ounces (Moz) silver at a grade of approx. 600 g/t and significant co-products of lead, zinc, copper and tin.
The more bullish estimate for Thomson Resources' Conrad Project came through the assessment of holes completed post the previous mineral resource estimate and new mine modelling based on true width, rather than the previously artificially constrained mining widths.
Bigger and more prospective than originally thought
Previous exploration data at the project seemed to have underestimated the potential of Conrad.
For instance, six core holes were drilled within the Conrad mineral resource area in 2010 by its previous owner. These were not included in the 2008 mineral resource estimate.
Two of these holes intersected significant mineralisation with estimated true widths including 1.2 m @ 790.9 g/t of silver (Ag) and 1.6 m @ 159.5 g/t Ag.
Potential upgrade in the wings
Thomson has appointed AMC Resource Consultants to undertake the systematic mineral resource re-estimations.
"A re-validated 138 drill hole data database and a new 3D Lode and Alteration model has been built for Conrad by Thomson's technical consultants Global Ore Discovery and delivered to AMC to initiate the new resource calculation," said the miner.
"The average estimated true width for the intercepts within the Conrad Lode Model is 1.7m, suggesting that significantly more tonnes of mineralisation will be considered in the new mineral resource estimate when compared to the fixed 1.2 m mining width parameters applied in the 2008 mineral resource estimate."
Surging commodity prices adds fuel to the Thomson Resources share price
The recent surge in commodity prices also bodes well for the economics of the project. The price run may allow for lower cut off grades to be used for both the high-grade shoots and lower grade near surface Greisen Zone.
"New AgEq gram x metre modelling of the Conrad Lode system shows that several of the key mineralised shoots are open and untested below 350 m depth, indicating priority mineral resource extension drill targets," added Thomson.
"VLF-EM geophysical surveys completed in 2010 of 7.5 km along the trend identified conductivity anomalies coincident with the known lodes and a series of high priority conductivity anomalies along the 5 km trend south-east of the known lodes. These represent priority exploration drill targets."
