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34 E&MJ; • JUNE 2014 www.e-mj.com Antofagasta plc has signed an agreement with Argonaut Resources whereby Antofagasta can earn a 70% interest in Argonaut's Lumwana West copper explo- ration project in northwest Zambia by spending $18.9 million on exploration plus the amount required to complete a feasibility study. If the project is feasible, Argonaut is either carried into production or bought out prior to construction. Argonaut will be the operator until an election by Antofagasta to take over as operator during Phase II of the project. A major drilling program of more than 8,500 m started at Lumwana West in May. The Argonaut-Antofagasta agreement outlines five phases of development: Phase I involves spending of $5 million by Antofagasta within one year in exchange for a 25% interest in the pro- ject. Phase II calls for exploration and development expenditures of $15 million by Antofagasta within four years of the completion of Phase I at a minimum expenditure rate of $2.5 million/year. Antofagasta can earn an effective 51% interest in the project by completing Phase II. Phase III involves the completion of a feasibility study. Antofagasta may conduct additional work necessary to start the feasibility study, such as a preliminary feasibility study, prior to electing to start the definitive study. Antofagasta will have up to two years to complete additional work and four years to complete the feasibility study. Antofagasta can earn an effective 70% interest in the project by completing the feasibility study. Phase IV is the period following the delivery of the feasibility study but prior to the development decision. Argonaut may elect not to contribute or to dilute during this period, subject to certain reimbursement conditions to be paid out of future dividends. Phase V is the period after a develop- ment decision when, if Argonaut decides not to fund its pro-rata share of the pro- ject, Antofagasta may elect to either carry Argonaut into production, with Argonaut's development costs being funded by 60% of future dividends, or buy out Argonaut's interest for its pro-rata share of the pro- ject's net present value. Argonaut is an ASX-listed Australian junior company. Antofagasta will become a cornerstone shareholder in Argonaut via a $1.1 million placement. ( www.argonautresources.com ) Exploration Briefs Cayden Resources is reporting positive results from an ongoing drilling pro- gram at the El Barqueño gold property in Jalisco, Mexico, where it holds an option to earn a 100% interest. The company is currently drilling the Peña de Oro target with two rigs, and, as a result of the success of the program, has increased planned drilling on the target to 6,000 m. Drilling highlights at Peña de Oro have included an intercept of 27 m of 4.46 g/mt gold from surface. The strike length of mineralization now stands at more than 400 m, and the maximum ver- tical depth is 110 m. Permitting efforts are ongoing throughout the El Barqueño concessions to allow better access to multiple targets identified by Cayden that it plans to drill over the next 12 months. As a result of the considerable El Barqueño land position, totaling more than 460 km 2 , and identification of large, mineralized vein breccia and stock- work systems, Cayden is undertaking a two-phase drilling approach to each iden- tified target. The initial phase will focus on exploration of multiple outcropping mineralized targets, with a goal of con- firming surface/subsurface mineralization and structure identification. The second phase will focus on delineation drilling as well as further step-outs along strike where large vein systems are projected. ( www.caydenresources.com ) Global Cobalt Corp., a junior company headquartered in Vancouver, British Columbia, has commissioned Wardell Armstrong International to complete an NI 43-101 compliant resource report on its Karakul cobalt project in the Altai Republic of south-central Russia. The report will be based on the results of a 45- hole, 7,398-m Global Cobalt drill cam- paign, along with historical Russian data. Global Cobalt suggests the Karakul deposit has the potential to be the world's largest source of primary cobalt outside of the central African copper belt. Historic non-NI 43-101 compliant Russian estimates for the deposit stand at 14.9 million mt of 0.26%-cobalt- equivalent mineralization in nine sul- phide bodies, with potential for expan- sion on strike and at depth. The Karakul deposit is located 5 km from the Russia-Mongolia border. It is a hydrothermal polymetallic sulphide deposit that in addition to cobalt is attractive for its copper, bismuth, silver and tungsten mineralization. At least five parallel, north-south trending, structural- ly controlled sulphide zones are delineat- ed and open at depth. ( www.globalcobaltcorp.com ) Mariana Resources initiated a 2,000-m drilling program at the Soledad gold- silver-copper prospect in Ancash Depart- ment, Peru, in early May. The program is Mariana's first work toward completion of a 70% earn-in agreement signed with Condor Resources in early April. Per the agreement, Mariana can earn a 70% interest in Soledad by completing cumulative exploration work of $4 million and making cumulative cash payments of $1.1 million to Condor, all prior to October 31, 2017. The agreement includes a mandatory drill program of 2,000 m to be completed prior to October 31, 2014. On May 20, Mariana reported assays from a 33-m intersection in the first hole drilled in the program of 1% copper, 3.2 g/mt gold, and 23 g/mt silver, start- ing at 58 m, and a shorter interval, start- ing at 59 m, of 21 m grading 1.5% cop- per, 4.7 g/mt gold, and 34 g/mt silver. True widths of the mineralized intercepts had not been determined. Drill targeting at the Soledad project is based on IP, magnetics, mapping, and geochemical sampling by Condor and mapping, channel sampling, and grid- based geochemistry by Mariana. ( www.marianaresources.com and www.condorresources.com ) REGIONAL NEWS - EXPLORATION ROUNDUP Antofagasta Earning-in to Argonaut's Zambia Project EMJ_pg04-45_EMJ_pg04-45 6/4/14 9:00 AM Page 34