Aura’s new Aranzazu mine shows its strength

Vancouver – Aura Minerals (ORA-T) bought the Aranzazu mine in Zacatecas state, Mexico, three months ago for $70 million in cash and shares. Now the final set of assay results from the previous owner’s 40,000-metre drill program are in and the results are better than expected, a perfect fit for Aura’s expansion plans at the copper-gold-silver operation.

The drill program tested the 2-km long mineralized skarn zone known as BW. Infill drilling provided information for a resource estimate but the key result of the program is the discovery of three new zones of mineralization.

One, called the BW extension, sits at the northwest end of the northwest-southeast striking BW zone. The BW extension was probed from an underground drilling station in the BW zone, which is currently being developed for near-term production. The best intercept from the new zone came from hole 12, which cut 33.5 metres grading 6.54% copper, 0.86 gram gold per tonne, and 87.7 grams silver per tonne.

Two other holes tested the BW extension. Hole 13B returned 28 metres grading 2.68% copper, 0.38 gram gold, and 40.43 grams silver and hole 14 hit 7.9 metres averaging 3.09% copper, 0.58 gram gold, and 38.3 grams silver. All three mineralized intercepts started from the drill collar.

At the other end of the BW zone, 2 km distant, the drill program revealed two other new zones. North of the end of BW’s strike is the Cabrestante zone, where hole 54650-11 returned 4.38% copper, 3.8 grams gold, and 69.7 grams silver over 18 metres, starting 96 metres downhole. Nearby, hole 54650-10 returned 1.86% copper, 1.15 grams gold, and 16.62 grams silver over 10 metres from 84 metres depth.

From 200 metres to the southeast, hole 23625-1 cut 20.71 metres grading 1.79% copper, 0.5 gram gold, and 17.85 grams silver from 42 metres depth and hole 23625-2, drilled from the same collar, hit 15.2 metres grading 0.55% copper and 7.84 grams silver from 48 metres downhole.

The other new zone sits south of the southeast end of BW and is called Catarroyo. In this area hole 23275-3 returned 15.2 metres averaging 3.09% copper, 1.3 grams sold, and 70.67 grams silver from 112 metres downhole, extending the zone to the west. Hole 23550-2, collared 300 metres to the northeast, cut 10.77 metres of 2.65% copper, 0.53 gram gold, and 34.61 grams silver from 243 metres depth.

Other strong Catarroyo results include 26.64 metres grading 2.22% copper, 0.61 gram gold, and 55.03 grams silver and 70 metres averaging 2.03% copper, 0.61 gram gold, and 29.72 grams silver.

In the main BW zone, a set of deep drilling results demonstrated that the deposit shows good down dip continuity. For example, hole 53750-1 returned 28.3 metres grading 1.79% copper, 0.68 gram gold, and 9.9 grams silver from 43.6 metres depth, followed by 8.1 metres grading 1.43% copper, 0.58 gram gold, and 6.95 grams silver from 111 metres downhole and 13.4 metres grading 1.79% copper, 0.29 gram gold and 7.94 grams silver from 175 metres depth.

Another strong BW zone results came from hole 53875-4, which returned 42.3 metres grading 3.9% copper, 2.6 grams gold, and 38.83 grams silver. Similarly, hole 53625-3 cut 13 metres grading 4.47% copper, 0.82 gram gold, and 17.09 grams silver followed by 7.7 metres of 6.12% copper, 1.8 grams gold, and 40.83 grams silver.

The 40,000-metre drill program churned out far more results than could be reported here, with intercept widths and grades fairly consistent. The company plans to use the data to calculate a new resource estimate.

However, Aura president and CEO Patrick Downey points out that drill density to date in the Cabrestante and Catarroyo zones is much less than in the main BW zone, where several high-grade chutes have been defined. To test for the presence of such chutes in the new zones Aura plans “significantly more drilling”.

In addition, Downey points out that the new BW extension could have near-term economic impact as it is so close to the current mine development. To test that possibility the company modified its mine development plan to include a drift into the extension, to allow for further exploration and perhaps development.

As for the mine itself, Auro is already at work developing expansion plans. Since assuming control of the mine in early June the company has been processing a low-grade ore stockpile left by the previous operator while awaiting formal transfer of the required explosives permit. The permit is expected by the end of the month.

Cash costs for June came in at US$3.52 per lb. copper, net of byproduct credits.

The plant is currently capable of processing 1,200 tonnes per day, a rate that Aura expects to achieve before the end of the year. At the same time the company is completing a detailed assessment of the mine and process plant in order to inform a mine a process plant expansion.

The company plans to expand the operation to 2,500 tonnes per day during 2009. A new development ramp is planned, in order to access deeper sections of the zones currently being mined, and another drilling program will soon get underway to better delineate the new areas of mineralization.

Aura is developing a new underground block model and has sent representative metallurgical samples for testing. The metallurgical testing is aimed at optimizing grind size, reagent suite of copper recovery, and gravity work for gold recovery, as well as testing the potential for recovery of zinc. Initial results show copper recoveries for copper and gold of better than 90% to a rougher circuit.

The latest set of drill results lifted Aura’s share price 9 to close at $1.09. The company has a 52-week trading range of 66 to $2 and has 593 million shares issued.