FreeportMcMoRan expands reserve in Irian Jaya province

New York-listed Freeport-McMoRan Copper & Gold (NYSE) is expanding the overall copper-gold resource on its holdings in Irian Jaya province, Indonesia.

The province constitutes the western part of the island of New Guinea, where Freeport has been active for the past 34 years. In 1960, a team of geologists began evaluating the Ertsberg copper showing on the edge of a high, glacial ridge 96 km inland from the southern coast. Mine construction began in 1970 and copper production started in late 1972. In 1988, as the mine was nearing depletion, Freeport discovered the substantial Grasberg copper-gold deposit 2 km from Ertsberg.

It is this operation that is currently being expanded to 115,000 tonnes per day. Once complete, by 1996, annual production will be about 500 million kg (1.1 billion lb.) copper and 46.7 million grams (1.5 million oz.) gold. Exploration is being focused on the original 9,880-hectare Block A (containing Grasberg), as well as within a 2.6-million-hectare contract-of-work area (Block B) and a 1-million-hectare exploration permit area (eastern blocks).

It was on the original contract-of-work area (Block A) that Freeport discovered what is known as the Big Gossan deposit; the find occurred as the company was drilling underground from an adit near the mill toward the base of the Grasberg orebody.

At the end of 1993, a minable reserve of 8.5 million tonnes averaging 2.4% copper and 0.77 grams gold was reported for Big Gossan. Recent drilling indicates an additional geologic resource of 7 million tonnes grading about 3% copper and 1 gram gold. A geologic resource of 6 million tonnes averaging 5% copper and 2.9 grams gold was identified by surface drilling of an area farther west than the area drilled from underground.

These additions raise the Big Gossan reserve and resource to about 21.5 million tonnes averaging 3.3% copper and 1.4 grams gold. The figure is expected to increase, as 150 metres of the Big Gossan zone have yet to be explored, along with possible extensions to the west.

Freeport estimates Big Gossan can be brought into production for about US$130 million, with development scheduled to begin late this year or early 1995. Ongoing exploration is also returning positive results from the Wanagon prospect, 3.5 km west of Big Gossan but in the same structural setting. Copper mineralization was intersected below the 2,900-metre elevation and gold mineralization was intersected in the near-surface environment. Evaluation of the Big Gossan-Waganon structure will be carried out as the Big Gossan exploration drift is extended toward the Wanagon prospect. On Block B, Freeport is reporting success from reconnaissance work in several areas, including the Wabu prospect 40 km north of Grasberg. Sixty-nine holes have been drilled to date and preliminary analysis indicates a mineral resource of 21.8-52.9 million grams gold in the area evaluated by the holes. The area is open to the east and west and at depth.

Freeport says the Wabu prospect lies within a larger mineralized district containing “highly prospective areas requiring close-spaced drilling.” The company also states that several anomalies were identified on the exploration permit area (eastern blocks), containing geological characteristics similar to those of the original block.