Atna acquires copper project in Chile

Vancouver — Atna Resources (ATN-T) has inked a deal to acquire a 100% interest in the Barreal Seco copper oxide/sulphide deposit in north-central Chile.

“I am extremely pleased to have concluded this agreement,” says David Watkins, Atna’s president. “It provides Atna with an opportunity to establish a producing mine with positive cash-flow in a short time frame. Atna intends to actively pursue other properties in the area and is planning to use Barreal Seco as a central processing plant acting as a catalyst to unleash the potential of other deposits.”

According to the agreement, Atna is required to spend US$250,000 in exploration over six months and complete a prefeasibility study for the exploitation of the oxide resource. After the completion of this work, Atna may exercise its option to enter into a 50-50 joint venture with the property owners.

Three months after commercial production, or 30 months after Atna exercises its option, the junior can purchase the owner’s 50% share for US$5 million, payable in five annual installments of $1 million.

Atna will act as operator of the project at all stages of the agreement and is responsible for project financing. A production decision is expected in the middle of next year and commercial production is expected to commence within three years, assuming there are no financing or permitting delays.

Barreal Seco is located 80 km northeast of the coastal port of Chanaral and 50 km northwest of Codelco’s El Salvador smelter and mine complex. It sits at an elevation of 1,200 metres above sea level and has good access to infrastructure. Power is nearby and road access is via a gravel road from the Pan-American Highway. Two cities, Chanaral and Taltal, are within commuting distance.

The Barreal Seco mining claims were optioned by RTZ Mining and Exploration from 1992 to 2000. They recently reverted back to the vendors. RTZ drilled 17,700 metres into the deposit. An additional 2,407 metres were drilled by Enami. About 85 holes were drilled into the oxide resource.

RTZ pegged the oxide resources at 17 million tonnes grading 0.7% copper at a 0.3%-copper cutoff. The sulphide resources were pegged at 54 million tonnes grading 0.65% copper at a 0.4%-copper cutoff. With no cutoff grade, the resource hosts 260 million tonnes grading 0.34% copper.

Atna believes that a 10,000-tonne-per-year copper cathode SX-EW operation is economically viable at today’s market prices. The open-pit resource has a low strip ratio (0.2-to-1). Atna thinks it can be developed in less than three years, with a life of at least 10 years.

The deposit is a specularite-rich breccia body that measures 600 metres long, 180-300 metres wide and 450 metres deep. It is hosted in andesitic volcanic and sedimentary rocks. The oxide zone extends 90-120 metres down and is followed by a 10-to-20-metre enrichment zone that sits on top of the hypogene zone.

Copper oxide mineralization includes atacamite, malachite and chrysocolla. Secondary sulphides are mainly chalcocite and covellite. The hypogene mineralization consists of chalcopyrite and pyrite with miner bornite.