Situated at the northern end of the prolific Cajamarca district, the property was auctioned off in February by Minero Peru. Candente was the only bidder.
Canariaco, which hosts a potentially leachable copper sulphide target with grades running more than 0.6% copper, was drilled in 1997 by Placer Dome and more recently by Billiton. The London-based major optioned the property from Minero Peru in 1999 for US$100,000 cash and a work commitment of US$400,000 in the first year. Billiton drilled 12 holes in total, including three in the Canariaco Norte target, before returning the property to Minero Peru, owing to escalating cash and work commitments.
Billiton has since acquired a 33.75% stake in the Antamina copper-zinc mine project in Peru and a 100% interest in the Spence copper project in Chile through its US$1.19-billion takeover of Rio Algom last October. Antamina is scheduled to come on-stream in the second half of 2001.
Prefeasibility studies on the Spence project were nearly complete at the end of 2000, and technical studies on leaching and leaching-flotation models are in progress. In-pit resources at Spence are estimated at 400 million tonnes grading 1% copper. A full feasibility study will likely begin in the current (second) quarter.
Billiton also acquired the La Granja copper porphyry property, 640 km north of Lima and 35 km southeast of Canariaco. The major paid US$35 million to
La Granja contains a measured and indicated resource of 2.56 billion tonnes grading 0.61% copper, based on a cutoff grade of 0.41% copper. Tests are evaluating the potential for heap leaching and for the application of Billiton’s proprietary biotechnology on higher-grade areas.
Canariaco is 100 km from the coastal city of Chiclayo and is accessible by dirt road, 10 km off a main highway. The Canariaco Norte target is a near-surface, hypogene-enriched copper zone overprinting a much larger, lower-grade porphyry system. A high sulphidation mineral assemblage in the hypogene zone consists of pyrite, chalcocite and covellite, plus minor enargite and bornite. A 15-to-30-metre-thick leached cap overlies the mineralized system.
Billiton completed three holes into the southern part of Canariaco Norte, all of which ended in copper sulphide mineralization.
Hole 1 intersected 19.95 metres of 0.55% copper from a down-hole depth of 39.6 to 59.55 metres, followed by 55.81 metres of 0.76% copper from 64.19 to 120 metres of depth, 66 metres of 0.45% copper at 120-186 metres and 11.2 metres of 0.6% copper at 186-197.2 metres.
Hole 2 cut 20 metres of 0.72% copper from 32 to 52 metres of depth, 54.35 metres of 0.4% copper from 52 to 106.35 metres, 40.07 metres of 0.4% copper at 110.9-150.97 metres and 27.16 metres of 0.32% copper at 164.84-192 metres.
The third hole hit 38.37 metres of 0.47% copper between 20 and 58.37 metres of depth, followed by 11.53 metres of 0.61% copper from 73.47 to 85 metres, 39.23 metres of 0.46% copper at 94.66-133.89 metres, 12.63 metres of 0.6% copper at 135.02-147.65 metres, and 15.99 metres of 0.68% copper at 150.51-166.3 metres.
Previous drilling by Placer Dome indicated that chalcopyrite-bearing mineralization, together with minor supergene chalcocite enrichment, is more dominant in the northern portion of Canariaco Norte. A highlight of that program was hole S1, which returned 32 metres of 1.25% copper, beginning at a down-hole depth of 70-102 metres, followed by 64 metres of 0.68% copper, 104 metres of 0.46% copper and 30 metres of 0.6% copper.
Hole S8 intersected 90 metres of 0.56% copper from 6 to 96 metres down-hole, followed by 26 metres of 0.82% copper and 200.5 metres of 0.59% copper. Billiton says the hypogene chalcopyrite and supergene chalcocite mineralization in the northern part of Canariaco Norte is too low-grade and restricted to be economic.
SX-EW
Candente believes that the hypogene chalcocite enriched zone in the southern part of the target offers potential for leached extraction using solvent extraction-electrowinning (SX-EW). Preliminary copper leach testing commissioned by Billiton, using Geomet of Chile, indicated recoveries of 85-90% for samples averaging 0.78% copper.
Candente is soliciting partners to advance the project.
Candente, which holds a portfolio of early-stage gold and base metal properties in Peru, was founded in 1997 by geologists Joanne Freeze and Fredy Huanqui. Freeze had worked in Peru since 1994 as a consultant for Arequipa Resources and Queenstake Resources, among other companies. Huanqui had been exploring Peru since 1974, working mainly for Centromin and later Arequipa.
During the first three years, the company acquired 360 sq. km of mineral properties, predominantly by staking. In May 2000, Canaccord Capital and Wolverton Securities carried out an initial public offering for Candente, selling just over 2 million units priced at 45 each. The company currently has 8 million shares outstanding, or 11 million fully diluted, and $100,000 in the bank.
It holds a 100% interest in five epithermal gold prospects, one porphyry copper-gold prospect and three volcanogenic massive sulphide prospects. Candente has also earned a controlling interest in two epithermal gold prospects and one disseminated copper-gold target. Several of the projects are at or near the drilling stage.
The properties are all in the western portions of central and northern Peru, and most are reachable by road.
El Tigre
Recent exploration work has focused on the wholly owned El Tigre property, in the northern part of the country. Gold mineralization there was previously found in three distinct zones in an area measuring 2 by 1 km. The gold occurs in quartz veins and veinlets crosscutting a stratiform sequence of volcanic and sedimentary rocks. The sequence has been intruded by a large granodioritic intrusive complex.
The property was previously worked by Solitario Resources, under option from Britannia Minerals. The most extensive mineralization was found in the Sorpresa-Torre zone, where gold mineralization of up to 9 grams per tonne occurs over a 2-km length. Solitario drill-tested the zone with 13 reverse-circulation holes and three core holes. Results included 27 metres of 0.92 gram gold per tonne, 34.5 metres of 0.73 gram and 9 metres of 1.83 grams. A re-analysis of the results indicated that higher grades occurs over narrower intervals.
In November 2000, Candente selectively collected 44 rock samples of quartz veins, stockwork and silicified wallrocks. Eighteen of the samples yielded assays greater than 0.5 gram, with five sample returning grades of between 3.5 and 9.5 grams.
Candente plans to conduct further low-cost prospecting, geochemical sampling and mapping at El Tigre, and at the Picota property in the western Andes of Peru, where two styles of gold mineralization have been recognized. The first style comprises structurally controlled siliceous zones with values of 1 to 3 grams. A newly discovered second style, in pervasive grey silica zones, contains 0.5-1 gram gold. The gold is often associated with high silver values running 80-129 grams per tonne. Previous exploration has outlined a porphyry copper target toward the centre of the property.
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