Constellation takes a shine to Philippine copper

Denver-based Constellation Copper (CCU-T) has agreed to acquire the Hinoba-an copper-gold-molybdenum porphyry deposit on Negros Island in the Philippines, from privately held Hinoba Holdings.

The proposed deal calls for Constellation to issue Hinoba Holdings 52 million shares. The newly minted shares would represent a 9.9% stake in the company following the transaction. Hinoba will also nominate one representative to Constellation’s board of directors.

At last count, Zinc and Copper Corp. of Australia figured Hinoba-an’s measured and indicated resources at 240.6 million tonnes grading 0.37% copper, based on a cutoff grade of 0.25% copper.

During the mid-1990s, former owner International Pursuit (now Apollo Gold [APG-T]), sank some 45,170 metres worth of diamond drilling and 10,906 metres of reverse-circulation drilling. Metallurgical test work indicated that simple flotation would recover some 90% of the copper to produce a concentrate grade of 24-25% copper. Preliminary engineering and design work suggested the deposit could support an open pit at a strip ratio of 1.2 to 1.

Constellation says that previous studies at Hinoba-an did not fully consider credits available from the gold, silver and molybdenum contained in the deposits. Recently, 16 random core samples returned an average of 0.075 gram gold, 0.72 gram silver per tonne plus 41 parts per million (ppm) molybdenum.

In addition to reviewing the project’s technical data, Constellation plans a program of sampling and drilling with an eye toward pinning down the gold and molybdenum content. Constellation notes that if the average grades hold up over the entire deposit, they would represent some 600,000 oz. of gold, 6 million oz. of silver, and 20 million lbs. of molybdenum. Drilling will also aim to confirm copper grades.

The deal is expected to wrap up by Feb. 15, subject to final due diligence, documentation and regulatory approval.

Shares in Constellation Copper were 1.5, or nearly 14%, higher at a 52-week high of 12.5 in early afternoon trading in Toronto following the news on Jan. 7.