AQM gets first resource estimate done on Zafranal

Just four months after making a deal to hold on to its 50% stake, AQM Copper (AQM-V) has its first resource estimate for the Main Zone of the Zafranal project in Peru.

The company says measured and indicated resources came in at 301 million tonnes grading 0.47% copper and 0.08 grams gold. Inferred resources stand at 51 million tonnes grading 0.32% copper and 0.06 grams gold. A 0.2% copper cut-off grade was used in the calculation

AQM Copper cut a deal with Teck Resources (TCK.B-T, TCK.A-T, TCK-N) which prevented Teck from diluting AQM down to a 40% stake. AQM remains as the operator at Zafranal until a production decision is made.

A key element to the initial resource estimate is that the measured and indicated category contains 0.22% leachable copper – which should reduce Capex cost and operation costs at any future mine.

AQM’s president, Bruce Turner said the estimate “represents one of the largest initial copper resource estimates reported in the last several years in Peru.”

Despite that, the news failed to inspire a market rally as AQM’s shares were off 18% or 21¢ on 700,000 shares traded.

Turner went on to point out that the country is bracing for a major increase in copper production in the next 5-10 years.

That increase will come largely thanks to the very region where Zafranal sits, as the project is situated on the northwestern extension of Peru’s Southern Porphyry copper belt near the city of Arequipa.

The resource was calculated using both historical drilling data along with the 53,308 metres drilled by AQM over the course of last year – the majority of which was diamond drilling.

The company says mineralization in the Main Zone extends over a 2,800 metre strike length, is up to 600 metres wide and up to 500 metres thick.

It also said the supergene blanket represents between 50 to 150 metres of thickness.

That supergene mineralization made up the measured portion of the estimate, while the bulk of inferred material corresponds to Hypogene mineralization and is along the border of the copper envelopes and within deep extensions defined by limited drilling.

AQM says the zone is open in several directions and at depth.

The company plans to direct the drills outward from the delineated zone in an effort to expanding the zone’s resource over the course of the year.

Teck discovered the Main zone at Zafranal in 2003. While the company outlined a conceptual resource through 11,805 metres of drilling, at the time, it didn’t believe the project had the kind of tonnage that it needs to build a mine.