Apoquindo hits copper in first Zafranal holes

Vancouver – The first few holes of a 40,000-metre drill program at the Zafranal project in southern Peru are returning good copper grades for earn-in operator Apoquindo Minerals (AQM-V).

Apoquindo is earning a 51% interest in Zafranal from Teck Resources (TCK.B-T, TCK-N) by spending US$7.5 million on exploration and handing over US$5 million and 1.5 million shares. The company has completed 20 holes since receiving drill permits in early January, all of which encountered copper mineralization within primary and secondary sulphides. Results are available for six holes.

Hole 34 cut 167 metres grading 0.89% copper and 0.18 gram gold per tonne, starting 71 metres downhole and including 78 metres averaging 1.38% copper. Collared 150 metres to the east, hole 39 returned 124 metres grading 0.96% copper and 0.14 gram gold, from 171 metres depth. And hole 33, located 100 metres farther northeast, intercepted 112 metres carrying 0.79% copper from 126 metres depth.

In general, mineralization at Zafranal consists of a secondary enrichment blanket underneath a leached cap. The secondary zone holes chalcocite-enriched volcanic units broken apart by several generations of intrusive bodies. Below the enrichment blanket is a mixed zone showing both primary and secondary chalcocite mineralization, follwed by a zone of lower-grade primary copper mineralization hosted in diorite intrusive.

The drill program is currently focused on testing the Zafranal Main zone, which sits on the eastern side of the project and is one of five porphyry targets. Teck’s 2004 and 2005 program of widely-spaced drill holes defined a zone of mineralization grading better than 0.2% copper at Zafranal Main that stretches 1,200 metres along strike and across 250 metres width, and averages 100 metres thickness. The phyllic alteration associated with the mineralized zone, however, strikes for 4,500 metres and spreads across 1,500 metres width.

Bruce Turner, Apoquindo’s president and CEO, said the recent drill results confirm the continuity of the chalcocite blanket between the old Teck holes, which were 250 to 400 metres apart. With the zone confirmed, focus will now shift to testing the extent of the secondary enrichment blanket along strike and the primary mineralization at depth.

Teck discovered Zafranal in 2003, through its generative exploration program. Some of the better results from Teck’s efforts at Zafranal include 77 metres of 1.8% copper and 0.21 gram gold, 110 metres of 1.22% copper, and 110 metres of 1.02% copper.

Zafranal is located 90 km northwest of Arequipa, in south Peru. The property is 41 km off the Panamerican highway, on a dirt road.

Apoqiundo’s current drill program is designed to satisfy the requirements of its 51% earn in, but that stake is subject to a back-in right: for US$2 million plus expenditure requirements based on Apoquindo’s spending to date, Teck can revive its interest to 60%. The major has to make its back-in decision before Apoquindo achieves its 51% earn in. If Teck does not exercise the back-in, Apoquindo will have the option to increase its Zafranal stake to 60% by paying Teck US$5 million. If, at that point, Teck elects to not participate in funding its 40% interest, Apoquindo could acquire a 100% interest in the project, subject to a 1% net smelter royalty, for US$15 million paid as an advance against the royalty.

Apoquindo’s results from Zafranal likely helped its share price remain steady near 90¢ through the second half of January, while the Venture board lost 5%. The company has a 52-week trading range of 22¢ to $1.10 and has 51 million shares outstanding.