Chase drilling Taysan project

Drilling continues to delineate the Taysan copper-gold porphyry deposit in the Philippines.

Situated 100 km south of Manila in Batangas province, the project is owned by Taysan Copper, a company in which Vancouver-based Chase Resource (TSE) holds a 35% interest. Chase can acquire the remaining 65% of the shares through aggregate cash payments of US$1.5 million to various optioners. Under an agreement with the Philippine government, Chase can explore and develop properties within an 83,000-hectare area in Batangas for 25 years. Proven and probable reserves at Taysan are estimated at 336 million tonnes grading 0.31% copper, plus 0.31 gram gold per tonne. An additional 200 million tonnes are indicated by drilling.

Within the outlined reserve block is a near-surface, higher-grade zone hosting grades of up to 0.9% copper and 0.9 gram gold. Chase believes the zone may contain upwards of 150 million tonnes, and the waste-to-ore stripping ratio is estimated at less than 0.5-to-1.

Recent drilling tested the northwestern edge of the orebody, where it is believed to thin out. Intervals include 78 metres of 0.34% copper and 0.17 gram gold for hole CT-22; 61 metres of 0.24% copper and 0.12 gram gold for CT-23; 45 metres of 0.31% copper and 0.05 gram gold for CT-24; and 53 metres of 0.19% copper and 0.08 gram gold for CT-25.

The program succeeded in extending the higher-grade mineralization to the west, beyond the previously defined boundary. Hole CT-26 returned 94 metres of 0.71% copper and 0.65 gram gold, while hole CT-27 intersected 134 metres of 0.64% copper and 0.41 gram gold. Hole CT-28 returned a grade of 0.37% copper and 0.1 gram gold over 96 metres. The zone remains open to the west, south and at depth.

The orebody is hosted by a Miocene diorite which was intruded by a dacite porphyry. The intrusion is believed to have been controlled by a low-angle fault, with the copper mineralization occurring in a series of shallow-dipping zones up to 250 metres thick. The mineralization is associated with quartz-magnetite alteration. Three magnetic anomalies bear resemblance to the one overlying the Taysan deposit and, indeed, are believed to be dislocated extensions of it. They are scheduled to be drill-tested in April.

A preliminary study by engineering firm Fluor Daniel Wright, in 1992, calculated a reserve of 233 million tonnes grading 0.32% copper and 0.31 gram gold. This material is believed to be minable by open-pit methods, and the stripping ratio is estimated at 0.85-to-1. A daily milling rate of 50,000 tonnes would sustain the initial pit for at least 15 years.

The capital cost of such an operation is estimated at US$253 million, while operating expenses are projected at US$159 per oz. gold and 40 cents per lb. of copper.

Well-situated, the project is 14 km from Batangas Harbour, near existing infrastructure.

Meanwhile, in Chile, the company has completed the first phase of drilling on a portion of the 16,200-hectare Mejillones property. Four geophysical anomalies were tested with nine holes, totalling 1,412 metres. At the VT mine, holes VT-1 to VT-6 were drilled east and west of old workings. Significant intersections include 20 metres of 0.35% copper for VT-1; 2 metres of 0.5% copper for VT-3; and 10 metres of 0.66% copper (including an interval grading 1.48% copper plus 0.55 gram gold over 4 metres) for VT-6.

Hole VT-10 tested the Dos Papaya target, 5 km south of the VT mine, and returned 12 metres of 1.12% copper. A single hole, VT-7, tested the so-called Flats area, returning low-grade copper mineralization averaging 0.12% over separate intervals of 10 and 4 metres. The DAV prospect was tested with a single hole as well, but encountered no significant values.

A second phase of drilling, in addition to expanded geophysical surveys, is planned for the project, in which Chase can acquire a 75% interest. The company has 13 million shares outstanding (or 15.8 million on a fully diluted basis) and working capital of $5 million.