Inca Pacific goes it alone at Magistral

As a result of paying US$2.1 million to a former partner, Inca Pacific Resources (IP-V) is now sole owner of the Magistral copper-molybdenum project in Ancash, Peru.

The Vancouver-based junior intends to carry out a bankable feasibility study of the project, which at last count had a resource of 105 million tonnes grading 0.74% copper, 0.052% molybdenum and 3.9 grams silver per tonne, based on a cutoff grade of 0.5% copper. Of this total, 64 million tonnes are in the measured and indicated category, whereas 42 million tonnes are inferred.

Inca Pacific and former partner Anaconda Peru, a wholly owned subsidiary of Chilean copper miner Antofagasta, have together spent more than US$6 million at Magistral. The work has included 24,640 metres of diamond drilling in 76 holes, geotechnical analyses, preliminary metallurgical testing, mine design studies, and environmental and socio-economic studies.

Last spring, Anaconda Peru elected not to exercise its right to increase its stake in the project to 65% from 51%, which it could have done by completing a bankable feasibility. The partners then opted to offer the project for sale, with Inca Pacific retaining the right to purchase its partner’s interest if a sale were not completed in 180 days.

In early February 2004, Inca Pacific signed an agreement to buy its partner’s 51% interest, and the deal was completed in early March.

Inca Pacific expects the independent bankable feasibility study to be completed within two years. The first phase will consist of field work, infill drilling, an upgraded resource estimate, and a scoping study — all to be completed by September of this year.

The second phase will include follow-up drilling and a preliminary feasibility study, scheduled for completion in March 2005. The third phase will include all activities needed to prepare and complete the final feasibility study by March 2006.

Anaconda Peru’s preliminary evaluation of the project examined a 15,000-tonne-per-day, open-pit operation with capital costs of about US$131 million. The mine life was estimated at 15 years, with annual production of 45,000 tonnes copper, 2,000 tonnes molybdenum, and 500,000 oz. silver.