Scoping study for Penasquito

Vancouver — Assay results from a 4,600-metre drill program over the Penasquito base metal property in Mexico have prompted Western Copper Holdings (WTC-T) and its Lima-based partner, Mauricio Hochschild & Compania, to launch a scoping study.

The 14-hole program tested the continuity and extent of mineralization previously hit in the Chile Colorado zone. Results are outlined below:

– Hole 9 scissored the mineralization cut in hole 8 (90.1 metres grading 0.69 gram gold and 53 grams silver per ton, plus 0.4% lead and 1% zinc) and returned 125 metres grading 0.47 gram gold, 28 grams silver, 0.11% lead and 0.93% zinc from a down-hole depth of 112 metres.

– Hole 10 was collared 110 metres north of hole 8, along the southern contact of the Azul pipe. It cut two mineralized zones grading 0.48 gram gold, 17 grams silver, 0.31% lead and 0.74% zinc over 88 metres from 44 metres down-hole, and 0.98 gram gold, 39 grams silver, 0.44% lead and 2.1% zinc over 82 metres from 164 metres down-hole.

– Hole 11 was collared 100 metres southwest of hole 2 (168 metres averaging 0.8 grams gold, 71 grams silver, 0.4% lead and 2% zinc) and drilled vertically. It cut 125 metres grading 0.23 gram gold, 49 grams silver, 0.51% lead and 0.83% zinc from 221 metres down-hole.

– Hole 12 was collared 750 metres northeast of Chile Colorado along the northern margin of the Azul pipe. It scissored a previous drill hole (297 metres averaging 0.38 gram gold, 66 grams silver, 0.87% lead and 1.1% zinc) and hit 150 metres grading 0.19 gram gold, 57 grams silver, 0.68% lead and 1.4% zinc from 292 metres down-hole.

– Hole 13 was drilled 1.7 km north of the Chile Colorado zone along the northern margin of the Outcrop breccia prospect. It returned 31.4 metres averaging 0.31 gram gold, 75 grams silver, 1.57% lead and 0.67% zinc.

– The final hole of the program, no. 14, was collared on the west side of the Azul pipe, some 500 metres northwest of Chile Colorado. It returned 142 metres grading 0.24 gram gold, 26 grams silver, 0.17% lead and 0.6% zinc from 105 metres down-hole.

Based on these promising results, Mauricio Hochschild has started a scoping study which will consider both bulk and selective underground mining. The study, slated for completion by the end of February, will include deposit modelling, resource estimations and in-house metallurgical tests.

Situated along the southern edge of the Azul breccia pipe, the zone has been defined by drilling over an area 500 metres long, 350 metres wide and 150 metres deep. Polymetallic mineralization occurs in veins, stockworks and disseminations in Cretaceous sandstones.

Western Copper acquired the 32.5-sq.-km property through a 1998 agreement with Kennecott, a subsidiary of London-based Rio Tinto (RTP-N). The deal includes eight projects scattered throughout the states of Zacatecas, San Luis Potosi and Guanajuato. To acquire a 100% interest in these properties, Western Copper must spend a minimum of US$1 million annually over five years. Kennecott retains a 51% back-in right or royalty on any individual property. To date, the company has spent US$6 million on 26,000 metres of drilling and other exploration work.

Earlier this year, a deal was struck allowing Hochschild to earn up to 68% of the property by spending US$1.75 million on exploration and development over three years.