Anaconda awaits scoping study for Magistral project

Anaconda Peru has completed the final four holes of a 26-hole, 8,500-metre drill program at the Magistral copper-molybdenum porphyry/skarn deposit, held by Inca Pacific Resources (IP-V).

With this year’s exploration expenditures now completed, Anaconda, a wholly owned subsidiary of London-based Antofagasta Minerals (ANFGF-O), can vest a 30% interest in the property by paying Banco Minero del Peru, one of the underlying option-holders, an additional US$400,000. The Magistral property was optioned to Antofagasta in October 1999.

Through Anaconda, Antofagasta is earning a 51% interest in the property by conducting a US$5.7-million work program. Once this has been completed, the company can increase its ownership to 65% by bringing the property to the feasibility stage within two years.

Recent drilling was aimed at defining the extent of the low-grade core of the porphyry, as well as targets outside the main body of mineralization.

Hole 24 was drilled as a reconnaissance hole outside of the area of known mineralization, and encountered 20 metres of 0.78% copper and 0.01% molybdenum, starting at a down-hole depth of 42 metres. The hole also intersected 100 metres grading 0.35% copper and 0.01% moly, 122 metres down-hole.

Holes 25 and 26 tested the low-grade core of the porphyry, though both failed to cut significant intersections.

Hole 27 was mineralized over its entire length and returned 137 metres grading 0.59% copper and 0.04% moly. This included a 21-metre interval that averaged 1.38% copper and 0.04% moly, starting at a down-hole depth of 13 metres.

Drill samples have been sent to Bondar Clegg in Vancouver, B.C., for analysis.

The main body of mineralization at Magistral is 1.2 km long and 125 metres thick, and extends to a depth of 350 metres. The mineralization remains open at depth.

Anaconda is preparing an internal scoping study to determine whether or not it should proceed with exploration. A decision is expected by the end of November.

Structural and stratigraphic mapping and analysis of drill core and skarn outcrops at Magistral indicate similarities with other large copper skarns in Peru, particularly Antamina (500 million tonnes averaging 1.2% copper, 1% zinc, 0.03% molybdenum and 11 grams gold per tonne), 160 km to the southeast. These similarities include structural setting, age and composition of host rocks and intrusives, mineralogy and mineral zonation, and the copper-molybdenum association.

Cerro de Pasco explored a limited portion of the skarn aureole at Magistral between 1969 and 1973. In the 1970s, the assets of Cerro de Pasco were nationalized and exploration abruptly ceased at Magistral. No work had been conducted at Magistral for almost three decades.

In December 1998, the government of Peru auctioned Magistral. Inca Pacific successfully won the bid by agreeing to spend US$2.1 million and paying US$750,000 by January 2002. Once vested, Inca Pacific will have seven years to complete a feasibility study and bring the deposit on-stream. The government will retain a net profits royalty, estimated to equate to a 0.5-3% net smelter return royalty depending on metal prices at that time.