Iron Creek advances Victoria in Chile

VANCOUVER — While Iron Creek Capital (IRN-V) may be a little rusty after a long time off, a new president and new capital is kick-starting progress for the Chilean explorer.

Timothy Beale, with more than 20 years of experience working in Chile, Argentina and Peru for several majors, was brought on as president in July. He tells The Northern Miner that while the company had been “moribund” for a while, the potential of its properties remains strong.

“We’re right in elephant country for big porphyry deposits,” says Beale.

The 450-sq.-km Victoria polymetallic project is Iron Creek’s most active, where joint-venture partner Hochschild Mining (HOC-L) has been drilling to earn a 60% stake in the property. Located in northern Chile, Victoria spans 37 km along the Domeyko fault zone, the same zone that hosts some of the world’s largest porphyry deposits.

Hochschild needs to spend US$6 million by 2013 to earn into Victoria, but Beale expects that to be spent by the year-end. Hochschild has already completed 17,000 metres of reverse circulation (RC) drilling and more than 700 metres of diamond drilling on the project and is currently working through a 5,000-metre diamond and 6,000-metre RC drill program.

While Beale sees big copper porphyry potential on the property, Hochschild has been focusing exploration on precious metals around a historic open pit on the property called Vaquillas. The mine was active in the 1980s, but the company has not been able to find any records for the operation.

Results from Vaquillas so far include diamond drill holes 10-033 that hit 10.5 metres grading 8.9 grams gold per tonne and 116.31 grams silver per tonne from 135 metres depth and hole 10-032 that cut 49 metres averaging 1.14 grams gold and 32.63 grams silver from 101 metres down-hole, and RC hole 09-002 that returned 21 metres grading 1.1 grams gold and 128.5 grams silver.

There is some evidence from twinning holes with diamond drills that the RC holes have not been representative of gold grades, with further testing planned to confirm that. With Hochschild’s current drill program divided between diamond and RC drilling, a clearer picture should emerge.

Hochschild’s current program should also test some of the porphyry targets on the site, something Beale has been pushing.

Beale is particularly intrigued by the undrilled Incahuasi target on the south end of the property, with hydrothermal alteration over 3.5 km by 1.5 km.

“It’s something I find incredible in this part of the world. So much of the area has been drilled to death,” says Beale of the undrilled target.

With Hochschild quickly earning in its stake, Iron Creek will soon need to provide 40% of exploration expenditures and has initiated a $6.3-million financing. The company is issuing 7.3 million brokered units at 65¢ and a further 2.4 million non-brokered units at the same price. Originally, the financing was set at $4.5 million but strong demand had the company increase it.

“The people we’ve met have seen a lot of potential,” says Beale of the Victoria project. He also notes that the financing will add some liquidity to the stock, since prior to the financing the company only had 17 million shares outstanding.

Along with Victoria, Iron Creek is in a 50-50 joint venture with Andina Minerals (ADM-V) on the 270-sq.-km Pampa Buenos Aires project, also in northern Chile. It has a 100% interest in the 113-sq.-km Pampa Sur project just south of Buenos Aires, and a small holding of 52 hectares called the Magallanes project, where Iron Creek hopes to extend its holdings.

Since it increased exploration, and with the marketing help from being a member of Vancouverbased Gold Group of companies, Iron Creek’s share price has recently climbed into the 70¢-range, after sitting largely untraded at around 30¢ for some time.