Pacifico Minerals Shares Up 11.11% With Drilling Update
Small-cap metals miner Pacifico Minerals Ltd [ASX:PMY] has seen a spike in their share price today following a positive update on the Phase 2 drilling program at the Sorby Hills Lead Silver Zinc Project.
Pacifico acquired a 75% interest in Sorby Hills late last year, and conducted a Phase 1 drilling program that showed greater indicated resources than what was estimated in the pre-feasibility study.
Phase 2 focused more on combining this larger resource estimate with enhanced metallurgical results to improve the economics of the area. Results revealed potential to even further increase the mineral resources estimate, with observed zinc deposits pointing to potential future zinc production.
The market has reacted positively, pushing the share price up 11.11% in the first few hours of trading.
Results show ‘great potential’
Until this latest round of results, zinc mineralisation hadn’t been considered in the project economics, but it was observed a lot in the Phase 1 program, particularly in the northern most section of Sorby Hills.
The company believe this provides ‘great potential for the delineation of further zinc resources to add significant value and enhance Project economics’.
That said, the current struggling zinc price and concerns of an approaching market oversupply means this metal isn’t likely to be as great a value adder as they say. Check out this free report to see what we here at Money Morning believe is the next hot metal.
Aside from zinc, metallurgical test work on the project confirmed its potential to ‘produce high quality lead concentrate containing appreciable silver credits’.
Silver is set to be in greater demand in the electric vehicle sector in the future, so it’s good that Sorby Hills can provide a varied set of minerals.
Where does Pacifico sit as an investment?
While 11% is no doubt a decent increase, in terms of pricing, we’re talking a rise of just a tenth of a cent. Granted, that is the nature of small-caps, in that they are subject to such high volatility because of their small size.
But volatility isn’t always upwards, meaning these kinds of stocks can just as easily swing the other way. In fact, this happened with Pacifico, where it jumped 22% higher on market open today, before quickly settling.
Then again, Pacifico shares are currently up 150% in just six months, so it has shown potential to grow.
However, as already mentioned, if zinc will be the main focus of production, there isn’t a lot of market support behind the future of this stock.
For Money Morning
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