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PNX Metals (ASX:PNX) thinks it’s found the formula to recover an additional 13,000 ounces of gold and 1 million ounces of silver from its Hayes Creek project in the Northern Territory.

It told the market today that it had been working on ways to improve recoveries from sulphide ore it is proposing to mine from the Iron Blow deposit at Hayes Creek.

The test work had seen it trial a new reagent — a substance that causes or promotes a chemical reaction – on tailings from Iron Blow, with the first pass result  showing improved recoveries of 26.6 percent gold and 19.9 percent silver.

PNX then subjected the resultant scavenger concentrate stream to three hydrometallurgical processing methods: intense cyanidation, ferric oxidation at elevated temperatures and pressure oxidation.

Intense cyanidation was the method ultimately settled on as the most economic, with it achieving additional recoveries of at least 10.7 percent gold and 17 percent silver.

“We are very pleased with the outcome of this test work as it is something we have been working on in the background for a while,” PNX managing director James Fox said.

“To have identified a potential new revenue stream from material that would otherwise end up in tailings is excellent.”

It said the new potential revenue stream would be incorporated into the Hayes Creek DFS, which is due for completion next year.

Meanwhile, PNX said that diamond drilling PNX has been undertaking since late-March and “thick intervals of massive sulphide mineralisation” had been intersected.

PNX said assays from cores taken as part of the drilling would be available from the end of this month.

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The Hayes Creek project is made up of several polymetallic and precious metals deposits including Iron Blow, Mount Bonnie and Fountain Head.

PNX produced a Pre-Feasibility Study for the project in 2017 — with the report saying a project producing an average of 18,300 tonnes of zinc, 14,700 ounces of gold and 1.4 million ounces of silver a year for 6.5 years could be on the cards.

The location of PNX's Hayes Creek project
The location of PNX’s Hayes Creek project

This would give Hayes Creek a net present value of $133 million using a 10 percent discount rate, with an internal rate of return of 73 percent and a payback period of just 15 months.

While those are positive numbers in their own right, PNX has been focused on developing mine life beyond 10 years with further drilling and development option studies.

This content is produced by Star Investing in commercial partnership with PNX Metals.  This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.