(MENAFN- ProactiveInvestors) ’ () and earn-in operator Compañia Minera Zahena S.A.C. (Zahena) have observed visible copper mineralisation in new holes drilled at the Ilo Norte Project in Peru.
Copper mineralisation exists as chalcopyrite filling fractures and replacing favourable beds in volcano-sedimentary rocks and also as disseminated chalcopyrite.
This follows on high grade intersections including 6 metres at 3.1% copper and 0.45 grams per tonne gold that were reported in June.
The new drilling brings the total number of holes drilled by Zahena in 2014 up to 16 for a total of 12657.9 metres.
Assays are expected to be received in January 2015.
There is potential mining access to deeper the high-grade orebody underground from a steep slope adjacent to mineralised area.
Outlining the highly prospective nature of the district there is over 560000 tonnes of copper production annually and 125 billion pounds of copper in published resources and reserves within 100 kilometres of Ilo Norte.
Ilo Norte benefits from existing infrastructure being just 5 kilometres from a sealed highway 10 kilometres from a major copper smelter and 25 kilometres from the port city of Ilo.
“We are pleased with the progress of our partner Zahena as they continue to test this large copper-gold target which is revealing more evidence of copper mineralisation over an increasingly wide area” managing director Chris Gale said:
“We look forward to updating the market with more detailed information as it becomes available including assay results as they are provided by Zahena.”
Drilling Results
The four holes completed IN-018A IN-019A IN-019B and IN-021 are located in the north eastern part of the drill pattern completed in June.
These holes were drilled to follow up high grade intersections of copper reported in June and also to test the intersection of a number of northwest and northeast trending structures believed to be important controls on the mineralisation at Ilo Norte.
Visible copper mineralisation was observed over significant intersections in IN-018A and IN-019A though no significant intervals with visible copper mineralisation were observed in IN-019B or IN-021.
Copper mineralisation was observed as chalcopyrite (copper sulphide) filling fractures and replacing favourable beds in volcano-sedimentary rocks in drill hole IN-018A and also as disseminated chalcopyrite in drill hole IN-019A over 34 metres from 767 metres.
Assay results are expected to be provided by Zahena in January when an update including detailed logging will be released.
Ilo Norte
Ilo Norte is an advanced exploration project that is prospective for copper-gold mineralisation in the heart of a major copper producing region.
The project hosts a very large alteration system which is at least 10 kilometres long and several hundred metres thick.
At least 3 square kilometres of intense alteration (magnetite-pyrite-albite-kspar) has been defined between Latin’s drilling in 2011 and the drilling undertaken earlier in 2014.
This supports the potential to discover significant high grade mineralisation within the overall alteration envelope in particular towards the North East of the area drilled which is completely obscured by recent cover.
The significance of such high-grade copper intersections with associated gold is their structural control.
Where such mineralised structures intersect one another and where they intersect favourable stratigraphic horizons there is potential to form a significant tonnage high grade copper ore body (with associated gold) with considerable depth extent.
Potential mining access to such an ore body would most likely be underground.
This takes advantage of the steep slope to the immediate south-west of the mineralised area which drops from 1400 metres altitude at the drilling area down to 400 metres altitude over only three kilometres towards the south-west.
Potential joint venture
Zahena is spending US$9 million to earn 79% of Ilo Norte under the earn-in option.
wholly-owned subsidiary Peruvian S.A.C. (PLR) is to receive staged payments over 4 years totalling US$3.65 million.
Following exercise of the option a Newco will be formed where PLR retains 30% ownership.
Zahena will have a limited option to buy out PLR’s 30% interest for a cash sum to be negotiated plus a 2% Net Smelter Return royalty on all mineral sales.
Analysis
The visible copper mineralisation intersected in new wells at Ilo Norte provides further support evidence of copper mineralisation over an increasingly wide area.
Assay results are expected to be provided by Zahena in January when an update including detailed logging will be released
Zahena’s continued success at Ilo Norte places ' in a position to potentially monetise the project quicker than anticipated.
The company's subsidiary PLS is to receive staged payments over 4 years totalling US$3.65 million as part of Zahara's earn-in option for 70%.
Given that Zahena previously completed in just four months its first eighteen months of drilling commitments while intersecting high grade copper in a copper and infrastructure rich region it would be expected that Zahara will continue to earn-in and complete the commitments well within the four year period.
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