El Morro drilling programme wraps up

Noranda (NOR-T) is encouraged by results from the last three holes drilled at the La Fortuna target, part of the El Morro copper-gold project in north-central Chile.

The Toronto-based major is earning a 70% interest in the project from the vendor, Metallica Resources (MR-T).

Of the three holes, no. 29 returned the most significant results, extending La Fortuna and indicating that the mineralized porphyry may remain open at depth, to the north and northwest. The hole cut 502 metres (from 100 metres below surface) averaging 0.63% copper and 0.7 gram gold per tonne, including a 158-metre interval of primary mineralization running 0.84% copper and 1.41 grams gold.

Holes 27 and 28 targeted the south-central part of La Fortuna. No. 27, which tested a 269-metre section, was highlighted by a 168-metre core length of primary mineralization grading 0.4% copper and 0.3 gram gold. Hole 28, 501 metres long, returned 282 metres (from a down-hole depth of 40 metres) grading 0.38% copper and 0.24 gram gold per tonne, 179 metres (from a depth of 322 metres) grading 0.51% copper and 0.36 gram gold, and a 20-metre enriched portion (from a depth of 20 metres) running 1.06% copper and 0.15 gram gold.

Previous holes, collared in the north-central portion of the target, returned similar grades over intervals as long as 638 metres.

La Fortuna’s copper-gold mineralization covers a 500-by-800-metre area. A lower-grade halo extends over a minimum area of 1,200 by 900 metres.

Metallica says the results support the belief that a large, highly mineralized system exists on the El Morro project. So far, exploration has turned up three principal zones of copper-gold, porphyry-style mineralization, El Morro, La Fortuna and El Negro, as well as a fourth zone, Cantarito, which is a high-sulphidation, epithermal-gold system related to La Fortuna.

Assay results are pending from seven Noranda core holes at the El Negro target, 2 km to the southwest.

Noranda can earn a 70% interest. in the project by spending US$10 million on exploration and development and by paying Metallica US$10 million by September 2005. Noranda can also subscribe for US$1 million worth of Metallica shares, on or before Sept. 14, at 1.5 times the prevailing price. Once Noranda has earned its 70% interest, Metallica can choose to have the major provide 70% of Metallica’s 30% contribution toward development costs. The financing rate would be Noranda’s cost of financing plus 1%.