LATIN AMERICA — Junior company chases missing chunk of Chuqui

Rockwell Ventures (RCW-V) is marketing a unique product to mining investors: a chance to search for the missing piece of the largest copper deposit in the world.

The Denver-based company, which only recently completed a reverse takeover, believes it has acquired a critical piece of ground that could host the faulted portion of the Chuquicamata copper mine of northern Chile.

The mine, in operation since 1915, is currently operated by Chile’s national mining company, Codelco. Porphyry mineralization at the deposit is cut off on the west side by the West fissure; the missing slice has never been accounted for after 30 years of attempts.

The West fissure is a regional structural weakness with a north-south orientation, paralleling the Chilean coastline. Many geologists believe the fissure focused the deposition of copper-bearing porphyry deposits, creating the largest concentration of the red metal in the world.

Other deposits situated on the West fissure include the El Abra mine, a joint venture between Codelco and Cyprus Amax Minerals (CYM-N), the Escondida mine, operated by Broken Hill Propriety (BHP-N) and the Collahuasi project, owned 44% by Falconbridge (FL-T), 44% by Minorco (MNRC-Q) and 12% by a Japanese consortium.

Former Anaconda Uranium geologist Richard Baker spent years searching for the elusive missing piece of Chuqui, enlisting the help of others and forming a private company to fund the exploration. The search led Baker and his crew to stake 18,300 ha in what is called the Ricardo prospect, south of the town of Calama in the Atacama desert. Baker died, however, before finding out whether his theory is correct.

The private company completed a reverse takeover early in 1998 to become Rockwell Ventures. The company has 31.2 million shares fully diluted, an unusually high number for such a small company. Of late, the stock has traded in the 30cents range.

Nearly 70% of the shares are held by Chairman Glen Zinn, Co-Chairman Jay Fuller and Director Mani Verma. Zinn and Verma are officers of AMT International Mining (AAI-T), an Arizona-based development company that is evaluating the Copper Creek project near San Manuel, Ariz.

“The [Ricardo] area is not much to look at,” said Rockwell President Douglas Silver. The piece of land is a totally flat expanse of thick gravels not far from Calama’s airport. What is below the gravels is what concerns Silver.

Previous drilling shows the top of bedrock to be at depths of 300 metres below the surface.

Silver believes there is a good chance Ricardo could host an underground deposit holding as much as 30 billion lbs. of copper, an audacious claim for such a raw prospect. Nevertheless, several prominent geologists have backed him up.

Baker’s work pointed to substantial southward displacement along the West fissure. In 1979, Jozsef Ambrus said much the same thing in a doctoral paper at the University of Salamanca in Spain that examined the complex structural fabric at Chuqui.

Recent structural studies by the University of Berlin and Universidad Catolica del Norte in Chile concluded that the West fissure has moved the rocks on the west side as much as 25 to 30 km to the south. The study was sponsored by Codelco, though it is has not endorsed the findings.

Francisco Camus, Codelco’s chief of exploration, told The Northern Miner, “I was once a believer [in the lateral offset theory], now I question it. It’s been tested at least four different times, once by Codelco.” Silver’s response is to admit that ultimately proving the theory will be difficult. “The answer is not obvious. But, Ricardo’s time has come,” he said, adding that Rockwell is looking to raise between US$3 and US$5 million to look for the missing chunk of Chuqui.

The company expects to begin a 7,800-line-km regional aerial magnetics survey in early April that will cover a 2,200-sq.-km area, including Ricardo.

Company geologists have already begun relogging old core from the property in search of clues about the regional geology below the gravels. And although the company’s planned dating of existing core isn’t likely to forge a link with dated copper mineralization at Chuqui, the establishment of the age of rocks found at Ricardo is still a useful exercise.

Extensive field checking is also planned, as is satellite imagery analysis.

The company is also contemplating an enzyme-leach survey, although Silver admits the gravels may be so deep they mask any recognizable signature.

Drilling at Ricardo is expected to cost as much as US$75,000 per hole, Silver said. Nevertheless, Rockwell anticipates drilling 1,000-metre-deep holes, and Silver expects it could take a great number of holes to pinpoint mineralization. The company has initially planned 20 holes.

“We are looking for the chalcocite blanket that was leached from the top of the porphyry and redeposited below the water table,” Silver said, noting that typical grades from the chalcocite blanket at Chuqui were between 2% and 4% copper.

Codelco’s Camus believes any chalcocite blanket from the missing chunk of the deposit could be eroded away, regardless of where it’s located.

Longshot or not, Silver expects to have the funds raised by mid-year and could be drilling shortly thereafter.