More VMS mineralization for Atico in Colombia

VANCOUVER – In the midst of uncertain markets, Atico Mining (ATY-V) is bucking the trend with exciting drill results that keep adding to the junior’s share price momentum.

Atico is exploring the El Roble property, in the Chocó department of Colombia. The site has been home to an underground mine for 22 years, during which time the 400-tonne-per-day (tpd) operation churned through almost 1.5 million tonnes of mineralized material grading, on average, 2.5% copper and 2.5 grams gold per tonne.

In January 2011 Atico inked a deal to earn a 90% stake in El Roble by paying the Colombian owners US$2.25 million over two years – which it has done – and then sealing the deal with a US$14-million lump sum payment. That final payment would have been due in January but Atico paid US$1.2 million to extend the option period by a year, which means the lump sum is now due in January 2014.

The extension is giving Atico more time to understand just what El Roble has to offer. The property’s copper and gold mineralization occurs in volcanogenic massive sulphide (VMS) lenses and mining to date has tapped into just a few such lenses. But Atico believes there could be many more lenses of VMS mineralization at El Roble.

Its drills seem to agree. The company’s share price jumped almost 50% in late January when an underground drill at El Roble hit a new massive sulphide body north of the mine working that produced a 119-metre intercept grading 6.9% copper and 6.3 grams gold.

Now another set of drill results is keeping Atico’s share price elevated. Underground drills still probing the north end of the known deposit just encountered another new lens of VMS mineralization. Atico has called the new lens Ares, though the company believes Ares is a fault-offset portion of the main Zeus massive sulphide body.

Two holes tested Ares. Hole 28 returned 49.2 metres grading 4.11% copper, 2.32 grams gold, and 6.36 grams silver per tonne. Hole 29 returned 25.3 metres grading 3.19% copper, 1.81 grams gold, and 9.25 grams silver. With these results Atico has traced Ares 75 metres below the known base of the adjacent Zeus body.

Other holes tested the main copper-rich Zeus body, which is overlain by the gold-rich Aquiles body. Where the two bodies are connected, mineralization stretches across as much as 65 metres width. Hole 27 returned an intercept almost that wide: 50 metres grading 2.21% copper, 3.3 grams gold, and 12.93 grams silver.

Combined, these new results extend the limits of known mineralization 360 metres along strike and 350 metres below level 2000, the lowest production level in the El Roble mine.

Atico CEO Fernando Ganoza said his team is pleased with the progress: “Underground diamond drilling at the El Roble mine continues to add high-grade copper-gold mineralization below current mining operations,” he said. “The north end of the El Roble deposit is quickly becoming an area with great potential to add more massive sulphide volume.”

Atico has three drills turning at El Roble. Two rigs are working underground, testing below the 2000 level, while a third is drilling from surface on strike to the north.

There is much on-strike ground to be tested. Atico has traced the favourable contact between the mafic volcanic flows of the Barroso Formation and the overlying felsic tuffs and pelagic sediments of the Penderisco Formation for more than 10 km, which suggests there is considerable potential for lateral expansion in addition to the potential at depth.

If El Roble indeed offers all of the VMS mineralization that Atico seeks, the company says it will make the $14-million lump sum payment to solidify its 90% stake in the project. Atico would then plan to bring new discoveries into production quickly using the existing mine and mill infrastructure, which it would expand from 400 tpd to 3,000 tpd.

The latest drill results from El Roble had little effect on Atico’s share price, which fell 11¢ on the news before regaining half that ground the next day to close at 96¢. The company has a 52-week share price range of 40¢ to $1.13 and has 52 million shares outstanding.