Key highlights

• Southern Hemisphere Mining is extending a historical diamond hole at its Llahuin Copper-Gold-Molybdenum Project in Chile.

• The drilling aims to test for a feeder zone beneath the Cerro deposit and had reached 640 metres in the 2 November update.

• This update covers why the company is going deeper, the next target, and the management expectations.

Southern Hemisphere Mining (ASX:SUH) is extending a historical diamond hole at its wholly owned Llahuin Copper-Gold-Molybdenum Project in Chile to test for a feeder zone beneath the Cerro deposit. In an ASX update on 2 November, the company said drilling had reached 640 metres and that it expected first assays later in November.

The hole, DDLLA028, originally ended at 401 metres. The extension aims to reach about 750 metres. It is described as

Why go deeper?

In porphyry copper systems, the shallower parts are often lower grade, while the intrusions and structures that fed the system can sit at depth and may host higher-grade mineralisation. Finding that feeder can transform the understanding of a deposit's size and grade.

The target is based on copper isotope analysis by consultant VectOres, reported on 30 September. Copper isotope ratios can vary with distance from the source of mineralising fluids, so they are used as a vectoring tool. The technique is still relatively specialised, and its predictions need to be confirmed by drilling. That is precisely what the deep hole is designed to do.

Part of a broader programme

The deep hole forms part of an initial programme of about 2,000 metres designed to extend the existing mineral resource estimate at the Cerro Ferro and Ferro South zones. The current resource stands at 218.2 million tonnes at 0.38% copper equivalent.

That is a large, low-grade resource, typical of porphyry deposits. Projects at such grades depend on scale, low mining costs and good recoveries. Discovering higher-grade material at depth could improve the economics, although deep material may also be more expensive to mine.

The next target

Southern Hemisphere has flagged a recently identified copper-gold target as next in line for drilling after DDLLA028. It features historical reverse circulation hole RCLLA009, which returned 8 metres at 3.67 g/t gold from 45 metres. The company says that interval has never been assayed for copper or any other elements.

Historical data can be valuable, but the original sampling and assay methods should be verified. Re-testing the area with modern drilling would establish whether the gold grade is reproducible and whether copper is also present.

Management's expectations

Chairman Mark Stowell said the company was encouraged by progress on the deep hole extension and expects to add more to Llahuin's potential before year-end. That is a forward-looking statement, and results may or may not support it.

Company context

Southern Hemisphere describes itself as a critical minerals explorer focused on copper, gold, molybdenum and manganese projects in Chile. Chile is the world's largest copper producer, with established infrastructure and mining expertise, although permitting and water access can be challenging.

Reading the results when they arrive

When assays are released, investors should look for the depth and grade of any mineralisation below 401 metres, whether grades increase with depth, and whether the company reports true widths. A deep hole that intersects only weak mineralisation would still provide geological information, but would not confirm a feeder zone.

What to watch

Key items are the first assays from DDLLA028, the remainder of the 2,000-metre programme, drilling at the RCLLA009 target and any update to the resource.

Why extending an old hole makes sense

Deepening an existing hole, rather than drilling a new one from surface, can save time and money because the upper part of the hole has already been drilled. It does carry technical risks, including hole deviation and ground conditions at depth. Diamond drilling to about 750 metres is a meaningful technical and financial undertaking for a small explorer. The approach nonetheless allows a direct test of the isotope-based model at relatively low cost.