Corriente puts Mirador on fast track

Corriente Resources (CTQ-T) plans to immediately begin drilling its Mirador copper-gold deposit in southeastern Ecuador, with an eye toward completing a bankable feasibility study by mid-2004.

Corriente says the decision followed an engineering review that indicated significant time savings with little added risk. The company figures the program will cost about $3 million, which it will fund with cash on hand.

Drilling will aim to provide samples for additional metallurgical test work, confirm resource estimates and test outlying targets such as the recently discovered Mirador North zone, 3 km to the northwest (T.N.M., Sept. 8-14/03).

Corriente believes the new zone represents a new porphyry system separate from the Mirador deposit. The zone remains open in all directions. The company says the high-grade discovery may significantly improve Mirador’s economics, and could impact on the design of the project’s proposed tailings storage facilities.

The new zone was cut by holes sunk as part of an ongoing prefeasibility study at Mirador.

In March, a preliminary assessment of Mirador found the project was capable of supporting a scaled-down 20,000-tonne-per-day open-pit operation, down from the previously planned 50,000-tonne-per-day operation. The plan focussed on an inferred resource of 98 million tonnes grading 0.78% copper and 0.22 gram gold per tonne in the northern portion of the deposit. Total resources are pegged at 182 million tonnes running 0.76% copper and 0.22 gram gold.

The smaller operation offered a pre-tax net present value (at a 10% discount) of US$153 million and a pre-tax internal rate of return of 30%, based on a copper price of US80 per lb. and a gold price of US$325 per oz. Total capital cost ring in at US$134 million.

AMEC E&C Services will include data from the pre-feasibility study into its new design.

In other news, Corriente has arranged an $11.9-million bought deal with a group of underwriters led by Sprott Securities. Sprott has agreed to buy 4.75 million units at $2.50 apiece. Each unit includes one share plus a quarter of a purchase warrant, with one warrant good for one share at $3 per share for 18 months. Corriente can compulsorily redeem the warrants if its share price exceeds $4 for 20 consecutive trading days during that period. Pending regulatory approval, the offering is slated to close by Nov. 5.

Corriente will use the proceeds to accelerate exploration activities and for general corporate purposes.

Shares in Corriente were off 15, or nearly 6%, in late afternoon trading in Toronto following the news on Oct. 22.