Anaconda drills Magistral

Vancouver — Anaconda Peru, a wholly owned subsidiary of London-based Antofagasta (ANFGF-O), has kicked off a US$3-million exploration program at the Magistral copper-molybdenum project, north of Lima.

Anaconda has earned a 30% interest in the property from Inca Pacific Resources (IP-V) and stands to gain an additional 21% by completing this year’s program. The company can increase its ownership to 65% by preparing a bankable feasibility study within two years.

A 14,000-metre program of diamond drilling will attempt to define a previously identified high-grade zone. Anaconda also plans to perform a series of metallurgical engineering and environmental studies to advance the project to the prefeasibility stage. Construction of access roads to the first 12 drill pads is nearing completion.

Last year’s drilling outlined an inferred geological resource of 190 million tonnes grading 0.83% copper and 0.062% molybdenum. This resource was calculated by Anaconda Peru using a manual method, since the density of drill holes was not sufficient for a geostatistical evaluation.

A scoping study by Anaconda indicates potential for an open-pit operation capable of producing 25,000 tonnes per day over a 16-year mine life. The stripping ratio is a moderate 2.6-to-1, with operating costs pegged at US54 per lb. copper. Based on a 10% discount rate, the net present value of the project before taxes is US$130 million.

Magistral represents a saddle-shaped body of mineralization measuring 1.2 km long by 125 metres wide. The deposit was drill-tested with 27 holes (8,500 metres) and defined to 350 metres below the surface. It remains open at depth. Anaconda says the success of the project will depend on three factors: keeping capital costs under US$280 million; lowering operating costs to less than US50 per lb. copper; and upgrading the geological resource (190 million tonnes grading 0.83% copper and 0.06% moly) to the drill-indicated category.

At last report, Inca Pacific had 32.5 million shares fully diluted and $350,000 in working capital.