Magistral drilling pulls high-grade copper

Vancouver — Junior Inca Pacific Resources (IP-V) and its partner, Anaconda Peru, have completed 80% of a 14,000-metre drill program at the Magistral copper porphyry-skarn property in the South American country.

The drilling is part of a US$3-million exploration program launched and managed by Anaconda Peru, a wholly owned subsidiary of London-based Antofagasta. The drilling is intended to define a high-grade core. The following are the latest results from the western portion of the intrusive complex:

– Hole 44 intersected 6 metres grading 3.98% copper and 0.04% molybdenum, starting at 100 metres down-hole. This was followed by a 22-metre section of 0.58% copper and 0.06% molybdenum.

– Hole 45 cut 14 metres of 3.04% copper and 0.01% moly, starting at 86 metres down-hole.

– Hole 46 intersected 208 metres grading 0.74% copper and 0.04% moly, starting at 282 metres down-hole.

– Hole 47 cut 148 metres averaging 0.65% copper and 0.07% moly, starting at 10 metres down-hole. This included a 22-metre section of 1.29% copper and 0.03% moly.

– Hole 48 hit 78 metres of 0.81% copper and 0.03% moly, starting at 192 metres down-hole. Included was a 20-metre interval grading 1.39% copper and 0.03% moly.

– Hole 49 returned 100 metres grading 0.48% copper and 0.11% moly, starting at 358 metres down-hole.

– Hole 50 cut 120 metres of 0.65% copper and 0.09% moly, starting at 370 metres down-hole.

– Hole 52 intersected 64 metres grading 0.63% copper, with no molybdenum values, starting at 334 metres down-hole.

These latest results confirm the inferred resource estimate of 190 million tonnes grading 0.83% copper and 0.06% moly. The resource lies in a saddle-shaped body of mineralization that measures 1.2 km long by 125 metres wide. Drill-tested with 27 holes totalling 8,500 metres, the mineralization has been defined to 350 metres below the surface and remains open at depth.

Anaconda’s objectives include: keeping capital costs under US$280 million; lowering the 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.

Structural and stratigraphic mapping and analysis of drill core and skarn outcrops at Magistral indicate similarities with other large copper skarns in Peru, particularly Antamina, 160 km to the southeast, where proven reserves stand at 313 million tonnes averaging 1.3% copper, 1.06% zinc, 0.03% molybdenum and 14.13 grams silver per tonne.

This year’s activities involve a 14,000-metre drill program (using four diamond rigs), as well as metallurgical, engineering and environmental studies. The aim of the program is to bring the project to the prefeasibility stage.

Through Anaconda, Antofagasta can earn a 51% interest in the project by spending US$2.9 million this year. Once this is done, the company can increase its ownership to 65% by advancing the property to the feasibility stage within two years.

In December 1998, the government of Peru auctioned Magistral. Inca Pacific won the bid by agreeing to spend US$2.1 million and pay US$750,000 by January 2002.

Once vested, Inca Pacific will have seven years to complete a feasibility study and develop the project. The government will retain a net profits royalty.