Continuity confirmed at Chile Colorado

Vancouver — The initial results from a planned 6,800 metre drill program on the Penasquito silver property have confirmed the mineral continuity of the Chile Colorado zone for owner Western Copper Holdings (WTC-T).

Chile Colorado lies along the southern edge of the Azul breccia and based on 19 previous holes covers a 500-by-350 metre area. The latest bout of drilling is aimed at defining resources and the results are in from the first seven holes.

Three of the holes tested the northwestern extent of zone. Hole 10 cut 176 metres grading 1.66% zinc, 0.48% lead, 44 grams silver and 0.32 gram gold per tonne from 192 metres downhole. Hole 11 returned 178 metres grading 1.64% zinc, 0.28% lead, 46 grams silver and 0.73 gram gold from 142 metres downhole. Hole 12 cut a 226 metre section running 1.37% zinc, 0.51% lead, 25 grams silver and 0.95 gram gold from 182 metres downhole. Included in this section was a 20 metre section which returned 4.77 grams gold.

Hole 13 tested the northeastern extent of the zone and hit 168 metres grading 1.81% zinc, 0.7% lead, 85 grams silver and 1.04 grams gold from 74 metres downhole. Within this section is a previously unknown sulphide-matrix breccia dyke that returned 18 metres grading 4.3% zinc, 3.77% lead, 252 grams silver and 1 gram gold. Holes 22 and 23 followed up this intercept and both cut the favourable dyke. Assay results are pending.

Moving to the southwestern end of the zone, holes 14 through 16 all cut better than expected grades with hole 15 returning 124 metres grading 1.95% zinc, 0.58% lead, 130 grams silver and 1.25 grams gold from 196 metres downhole. Hole 14 cut50 metres grading 3.61% zinc, 4.71% lead, 373 grams silver and 0.41 grams gold from 196 metres downhole and hole 16 averaged 2.38% zinc, 1.79% lead, 131 grams silver and 0.35 gram gold over 210 metres from 138 metres downhole.

Hole 24 is currently drilling 800 metres northeast of the Chile Colorado and 400 metres southeast of a 1995 drill hole that cut 297 metres grading 1.1% zinc, 0.9% lead, 66 grams silver and 0.38 gram gold. At last report, the hole was at 580 metres and has cut visible lead-zinc mineralization over long intervals.

A resource calculation based on all 33 holes drilled into the zone is expected shortly.

Covering 32.5 sq. km in the historical Concepcion del Oro district of Mexico’s Zecatecas state, Penasquito hosts a 9-sq km mineralizing system lying 30 metres below alluvial cover. Modern day exploration over the prospective ground began in 1994 with Kennecott, a subsidiary of mining giant Rio Tinto (RTP-N) completing several geochemical and geophysical surveys, as well as drilling a total of 71 holes. This work led to the discovery of polymetallic mineralization, rich in silver hosted in Cretaceous sandstones at the Chile Colorado zone, two large breccia pipes and numerous, as yet untested anomalies.

Western Copper entered the picture in 1998 by acquiring the property as part of a deal that included eight projects scattered throughout Zacatecas, San Luis Potosi and Guanajuato states. The Dale Corman-led junior subsequently drilled nine holes on the property before dealing it to Lima, Peru-based Mauricio Hochschild & Cia in August of 2000.

Last year, Western Copper reacquired its 100% stake in the project after Hochschild dropped its option to earn a 68% interest. Hochschild spent more than US$1 million on exploration, mostly at the Chile Colorado prospect, where 11 core holes were drilled. The weighted average of the mineralized intervals from 19 holes drilled at Chile Colorado by Kennecott, Western Copper and Hochschild Based is 0.54 gram gold and 100 grams silver per tonne, plus 0.8% lead and 1.8% zinc.