Proceeds from a private placement are enabling Far West Mining (FWM-V) to resume its search for iron-oxide copper-gold deposits in the promising Candelaria belt of northern Chile.
In late July, Far West became a market sensation after announcing the intersection of 60 metres averaging 2.47% copper and 0.33 gram gold per tonne. News of the discovery immediately sent the stock soaring to $1.50 and has since propped it up another 77, though this puts it off 13 on the day.
Part of the day’s decline reflects the closing of the financing, which saw 6.2 million units issued at $1.30 apiece. A unit consists of a share and half a warrant, with a full warrant entitling the holder to purchase another share for one year, at $1.75.
Net proceeds are earmarked for Candelaria, which covers 468,650 ha of the metallogenic belt are which it is named. Among the belt’s notable claims to fame is the Mantoverde deposit of Anglo American (AAUK-Q), where, at last report, reserves stood at 85 million tonnes grading 0.67% acid-soluble copper.
Under terms of an agreement with BHP Billiton (BHP-N), Far West can earn 70% interests in select areas by sinking 2,500 metres of drilling there. The major retains back-in rights for 70% stakes in exchange for covering all future expenditures leading to the completion of feasiblity studies.
Recent efforts have been focused on the 4c3, 4c9, 4d1, 4b1 and 4b3 areas, where broad gravity or magnetic highs were outlined in earlier airborne surveys. The mineralized interval itself came from the 4c3 area, west of old mine workings, along the Santa Teresita fault.
Geologically, the 4c3 area is underlain by hornfelsed volcanic rocks that are intruded by mafic-to-felsic plutons and dikes. The mineralization is held in the intrusive rocks, where altered to quartz, carbonate and sericite.
The mineralized interval begins 28 metres down-hole and is completely oxidized. About half of the core is mixed with specular hematite, magnetite, limonite, chalcocite, copper oxides, quartz-veining and traces of chalcopyrite and bornite. The copper oxides are abundant in fractures, but are also be disseminated in the host rock, and individual grades vary between 0.27% and 15.25% over the 2-metre composite intervals. Only one composite exceeded a gram of gold, averaging 1.37.
Two other holes collared 705 and 1,700 metres north of hole 1 returned anomalous values only. The closer hole also pulled up strong quartz-sericite-carbonate alteration.
Far West likens the geological setting to Mantoverde, where copper mineralization is associated with specular hematitic breccia in brittle faulting belonging to the regional Atacama fault. It is through the fault that the mineralizing fluids travelled to precipitate in favorable rocks in the district.
At Target 4c9, which extends directly northeast of 4c3, three holes intersected zones of potassic and quartz-sericite alteration with associated pyrite and chalcopyrite. Copper assays ran up to 0.31% across 2 metres of core.
Results from four holes drilled at the 4d1 target were somewhat better, with 4 metres of one hole yielding 2.94% copper. Iron- and copper-oxides also are notable in several mine workings found in the area.
The 4d1 anomaly is associated with a splay off the Atacama fault, due south and on trend with the north-trending Mantoverde fault system. The splay is characterized by a broad package of mylonites (sheet-like bodies typically composed of quartz and alkali feldspar).
Three holes drilled at the 4b1 and 4b3 targets intersected a sequence of intercalated calcareous sedimentary rocks and volcaniclastics. Widespread ‘earthy’ hematite is the predominant alteration mineral, and only up to 0.23% copper over 2 metres of disseminated chalcopyrite from the 4b3 area.
The 4b1 and 4b3 targets lie southeast of the historic Santo Domingo iron-oxide copper-gold district.
In return for underwriting the placement, First Associates Investments, Canaccord Capital and Haywood Securities have been paid a 6.5% commission from the gross proceeds. First Associates with the lead underwriter.
The securities are subject to a fourth-month hold period, meaning none can be traded on the open market until mid-January.
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