VANCOUVER — The long copper hits coming out of the Zafranal project in southern Peru are starting to define a sizable zone of mineralization and the success has prompted its owners AQM Copper (AQM-V) and Teck Resources (TCK. B-T, TCK-N) to renegotiate their joint-venture agreement and form a company dedicated to the project.
The latest results from Zafranal add two new holes to the list of intercepts carrying at least 0.6% copper for 100 metres or more. Hole 39, collared in the middle of the eastern half of the Main zone, returned 188 metres grading 0.73% copper and 0.13 gram gold per tonne from 104 metres downhole, followed by 92 metres of 0.29% copper and 0.06 gram gold. Two nearby holes previously returned similar intercepts: hole 25 cut 132 metres of 0.42% copper from 80 metres to the north and hole 53 returned 114 metres of 0.42% copper from 100 metres to the west. These results confirm the presence of higher-grade enriched copper mineralization in the eastern half of the zone.
Hole 61, drilled 250 metres farther east and slightly south, intercepted 78 metres grading 0.58% copper and 0.08 gram gold, leaving the east end of the zone open to the south.
The other 10 new holes are from the west end of the zone, which keeps expanding. Hole 54 cut 135.4 metres grading 0.63% copper and 0.05 gram gold from 46 metres downhole; nearby, hole 57 returned 65 metres of 0.72% copper and 0.03 gram gold. Farther west, hole 59 hit three mineralized intercepts: 48.5 metres of 0.42% copper, 24 metres of 0.54% copper and 14 metres of 0.31% copper. And hole 55 returned 45 metres grading 0.81% copper.
AQM will continue to grid-test the Main zone while searching for strike extensions to the east and west. The company also plans to drill a few deep holes to probe the nature of the mineralized zone at depth and drill a few holes on several satellite targets before the end of the year.
AQM’s drilling success brought joint-venture partner Teck back to the negotiating table. The two companies recently amended the terms of AQM’s earn-in in order to move the project quickly along.
Under the new deal, AQM is immediately gaining a 50% stake in Zafranal for having spent US$7.5 million on exploration over the last year. AQM is the project operator and will solely fund the next US$10.7 million in project work, after which Teck will start contributing its half of costs. If Zafranal reaches a positive development decision, Teck can elect to become operator.
For AQM, the key changes in the new deal include: AQM no longer has to make cash payments to Teck. And Teck no longer holds the right to back in for a 60% stake or hold a net smelter return royalty. Instead, the companies will be 50-50 partners in owning a new Zafranalfocused company.
Teck discovered Zafranal in 2003, during a regional exploration program in southern Peru. The major outlined an interesting conceptual resource through limited drilling. In early 2009, after a bidding process, AQM won the right to back in to Zafranal.
The junior soon kicked off a 40,000-metre drill program focused primarily on the central 2 km of the 3.5-km long, east-west trending Main zone, which is one of six porphyry copper-gold targets identified at Zafranal. To date, the program has defined mineralized zone that covers 3.3 km along strike, 600 metres in width and varies between 50 and 150 metres in thickness.
Other strong results from the program include 118 metres of 1% copper, 358 metres of 0.7% copper, 132 metres of 0.92% copper and 145 metres of 1.21% copper.
Mineralization at Zafranal is zoned, with a leached zone atop an immature secondary enrichment blanket covering a little-explored hypogene sulphide zone at depth. AQM is currently awaiting results from an initial metallurgical test-work program.
The Zafranal project is 90 km northwest of Arequipa, 60 km from the Panamerican Highway, along a gravel road.
AQM gained 10¢ on Zafranal’s latest drill results and the amended joint-venture deal news to reach 81¢.
The company has a 52-week trading range of 50¢-$1.10 and 97 million shares outstanding.
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