Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr
Issue link: https://emj.epubxp.com/i/342236
22 E&MJ; • JULY 2014 www.e-mj.com Antofagasta plc has signed an agreement with Argonaut Resources whereby Anto- fagasta can earn a 70% interest in Argo- naut's Lumwana West copper exploration 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 Antofa- gasta 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 1 involves spending $5 million by Antofa- gasta within one year in exchange for a 25% interest in the project. Phase II calls for exploration and devel- opment expenditures of $15 million by Antofagasta within four years of the com- pletion of Phase I at a minimum expendi- ture 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 feasi- bility 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 reimburse- ment 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 project, 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. ( www.argonautresources.com ) Exploration Briefs Cayden Resources is reporting positive results from an ongoing drilling program 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 min- eralization now stands at more than 400 m, and the maximum vertical depth is 110 m. Cayden is undertaking a two-phase drilling approach to each identified target. The initial phase will focus on exploration of multiple outcropping mineralized tar- gets, with a goal of confirming surface/ subsurface mineralization and structure identification. The second phase will focus on delineation drilling as well as fur- ther step-outs along strike where large vein systems are projected. ( www.caydenresources.com ) Global Cobalt Corp., a junior Canadian company, 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 campaign, 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 esti- mates for the deposit stand at 14.9 million mt of 0.26% cobalt-equivalent mineraliza- tion in nine sulphide bodies, with potential for expansion on strike and at depth. The Karakul deposit, located 5 km from the Russia-Mongolia border, is a hydrother- mal polymetallic sulphide deposit that is also attractive for its copper, bismuth, sil- ver and tungsten mineralization. At least five parallel, north-south trending, struc- turally controlled sulphide zones are delin- eated 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 Department, 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. 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, starting at 58 m, and a shorter interval, starting at 59 m, of 21 m grading 1.5% copper, 4.7 g/mt gold, and 34 g/mt silver. True widths of the mineralized intercepts had not been determined. ( www.marianaresources.com and www.condorresources.com ) Garibaldi Resources reported that first- ever diamond drilling at the La Patilla gold property in Sinaloa, Mexico, has returned encouraging gold values near-surface, including an interval grading 10.4 g/mt gold over 8.5 m within a wider 30-m inter- val grading 3.1 g/mt gold. First-pass metallurgical testing is now under way in advance of a planned phase-two drill program. Five of six holes drilled to test the La Patilla vein system intersected broad zones of mineralization along 75 m of strike length to depths of about 50 m. Mineralization remains open in all direc- tions, including at depth, and consists of gold-bearing quartz veins and breccia bodies in an epithermal, low-sulphidation system. The presence of mineralization in the wallrocks of the La Patilla vein system could be favorable for a bulk mining open- pit scenario with a relatively low strip ratio. Garibaldi has started a test program to determine the amenability of the mineral- ization to heap leaching. ( www.garibaldiresources.com ) REGIONAL NEWS - EXPLORATION ROUNDUP Antofagasta Earning-in to Argonaut's Zambia Project EMJ_pg04-27_EMJ_pg04-27 7/2/14 1:50 PM Page 22