Ero Copper reports new copper zone below Vermelhos mine in Brazil

Ero Copper (TSX: ERO) says it has identified a new zone of mineralization at its Vermelhos project, an underground mine under development in Brazil and part of the company’s MCSA mining complex, which includes the Pilar underground mine and the Surubim open pit mine, in the country’s northeastern state of Bahia.

The new discovery, named the Novo zone, was found about 200 metres below the existing infrastructure of the Vermelhos mine. Drillhole FVS-922 intersected 13.8 metres grading 2.62% copper from 554 metres, including 4 metres of 5.52%, and drillhole FVS-872 returned 4.2 metres grading 5.72% copper starting from 205 metres downhole, including 2 metres of 9.60% copper.

The company noted that the new zone was drilled “based upon a revised structural interpretation supported by geologic mapping of the main Vermelhos orebodies” and stated that the discovery “has been interpreted as a sub-horizontal, north-plunging lens of high-grade massive sulphide mineralization, extending over an identified strike length to date of approximately 200 metres.” The lens, it says, remains open down plunge.

The company also released other assay results it has received from drilling between December 2020 and early April, including from its regional exploration program within the Curaca Valley, in addition to in-mine and near-mine exploration.

Twenty-three drill rigs are working throughout the Curaca Valley, six of which are allocated to regional exploration. The company is focused in this location on three mineral districts: the Pilar district in the south of the Curaca Valley; the Surubim district, and the Vermelhos district.

In addition to finding the Novo Zone, Ero Copper has identified two new mineralized systems (C4, about 13 km from its Subrahim mine, and Terra do Sal, 8 km from the Subrahim mine), both of which it believes “have excellent potential to host high-grade massive sulphide mineralization as well as disseminated near-surface mineralization.”

At Terra do Sal, the company has identified a surface footprint from surface and extending over 800 metres in strike, and which measures about 250 metres in thickness at surface. Drill highlights included FTS-62, which intersected 25 metres of 1.02% copper starting from 317 metres downhole, including 6 metres of 1.38% copper.

At C4, drilling intercepted disseminated sulphide mineralization from an outcrop to about 700 metres below surface. Drillhole FC4-01 cut 18.8 metres of 0.31% copper from 90 metres, 18 metres of 0.30% copper and 44 metres of 0.33% copper.

Meanwhile, the company continues to undertake exploration with five drill rigs in the Deepening Extension Zone of its Pilar mine, and is targeting mineralization on the East Limb of the mine to the 1500 level, or about 1,200 to 2,000 metres below surface and about 100 metres laterally from the current level of the primary ramp. Drillhole FC48142 returned 20.9 metre grading 5.16% copper starting from 727 metres, including 3 metres of 10.02% copper, while hole FC5175 cut 11.3 metres grading 4.25% copper from 638 metres, including 2.3 metres of 17.70% copper and 9.7 metres of 3.15% copper.

Assays also included results from the deepest drillhole at Pilar to date, about 200 metres deeper than the limit of the 2020 inferred resource, demonstrating, the company says, that the Pilar mine remains open to depth. The drillhole, FC48173B, intersected 7.2 metres of 2.14% copper starting from 360 metres downhole, including 4 metres of 3.08% copper.

Late last year the company also started re-evaluating each of its fully permitted, past-producing open pit mines with the Curaca Valley, with the objective of evaluating “the potential for targeted high-grade open pit and underground development.” So far the company has pinpointed target zonesin two of its past-producing mines from just beneath the historic open pits up to 70 metres beneath the pit limits. Drilling is underway at Lagoa da Mina, the northern portion of  the Angicos mine in the Surubim district and at Sucurarana Norte, in the Pilar district. Drilling below the Surubim mine is expected to start in the second quarter.

Ero Copper’s other assets in Brazil include its Boa Esperanca copper project, in the southeastern state of Para, where a 2017 feasibility study estimated an initial mine life of nine years producing about 163,000 tonnes of copper over the life of the mine, and its NX Gold Mining Complex which produces dore bars containing gold and silver in the southeastern state of Mato Grosso.

Shares of Ero Copper have traded in a range of $14.31 and $25.14 per share over the last year, and at presstime were approaching their 52-week high, at $25 apiece. The company has about 88 million common shares outstanding for a market cap of about $2.2 billion.

Farooq Hamed of Raymond James raised his target price on the news to $28 per share from $27 per share and has an outperform rating on the stock.