BHP Billiton, Corriente form alliance

Last year, Corriente Resources (CTQ-T) teamed up with Lowell Mineral Exploration and Billiton to explore porphyry copper projects in southern Ecuador. Now Corriente has joined forces with newly created mining giant BHP Billiton (BHP-N) to explore base metal projects all over the world, starting with the Mumbwa copper-gold project in Zambia.

“We view this alliance as more than just another property deal; it’s a new model for long-term relationships between junior explorers and senior mining companies,” says David Whitehead, formerly chief executive of exploration and development for Billiton. “Our decision to propose the alliance to Corriente results from the superb work they have done on the Ecuador projects during the past year.”

Ken Shannon, Corriente’s chief executive officer, is equally enthusiastic about the alliance. “We feel that the addition of the Mumbwa district to our current holdings of copper porphyry deposits in Ecuador continues to position [us] as a premier copper exploration company,” he says. “We’re excited about the commercial potential of the Mumbwa district, especially since the projects are advanced and drill-ready.”

BHP Billiton describes the Mumbwa district as “the most prospective iron oxide copper-gold project in Zambia.” Several granite-related iron oxide breccia systems have been identified on the property, the most advanced being the Kitumba prospect.

Kitumba consists of a complex magnetic anomaly overlain by an extensive iron-oxide breccia system comparable in size to Australia’s famous Olympic Dam deposit. The breccia system at Kitumba hosts a 12-by-4-km copper-gold geochemical and geophysical anomaly, and covers several historic copper occurrences. The best known of these, dubbed Sugar Loaf, was tested by drilling that returned copper mineralization, including 100 metres grading 1% copper and 20 metres of 3.9% copper.

Because of the large extent of the mineralized breccia system at Kitumba, the partners are optimistic about the property’s potential to host a substantial iron oxide copper-gold deposit. The area of interest also covers other previously identified breccia systems with geophysical and geochemical anomalies.

Although the exploration alliance is, at present, based only on a letter of intent, the companies expect to seal their partnership with definitive agreements in due course. BHP Billiton has already agreed to provide up to US$3 million as a “lead order” position in future financings. These will take place in stages over the next five months and will result in Corriente having sufficient funds to explore an expanded portfolio of advanced projects. It can then focus exclusively on the work programs without worrying about keeping the treasury full in these challenging times.