Norsemont options Peruvian copper porphyry-skarn

Vancouver – Vancouver-based Norsemont Mining (NOM-V) has optioned the 5,000-plus hectare Constancia property in southern Peru from Rio Tinto (RTP-N). Norsemont can acquire up to a 70% interest in the copper-gold-molybdenum porphyry-skarn deposit in the southern part of the country.

The Constancia property is situated at 4,000-4,700 metres elevation some 600 km southeast of Lima, in Chumbivilcas Province. It is within the Yauri-Andahuaylas metallogenic belt which hosts several large-scale copper-gold-molybdenum porphyry as well as skarn deposits.

Norsemont can acquire up to 70% interest in the Constancia property through an initial option for 51% by making payments of US$5 million, completing US$7.8 million in exploration work and issuing 1.25 million common shares of Norsemont to Rio Tinto over five years.

If global reserves amount to at least 8.8 billion lbs. copper, Rio Tinto can claw back 17%, after Norsemont acquires its initial 51% interest.

Norsemont can acquire another 9% for US$3.75 million or 19% for US$8 million, if Rio Tinto decides not to claw back.

Mitsui (MITSY-Q) and Minera Katanga, the previous operators, drilled 5,430 metres in 48 holes on the property in the 1980s. Rio Tinto entered into a JV with Mitsui in October 2003 and drilled over 7,800 metres in 24 widely spaced diamond drill holes.

Norsemont noted that the best drill intercept was 168 metres averaging 1.14% copper, 0.11 gram gold, 8 grams silver, 0.014% molybdenum, within a zone enriched in chalcocite.

Rio Tinto prepared a preliminary unclassified resource estimate based on the 72 holes. The historical resource includes 608 million tonnes averaging 0.48% copper, 3.4 grams silver, 0.05 gram gold, 0.015% molybdenum at a 0.3% copper cut-off. At a 0.5% copper cutoff the resource comprises 189 million tonnes averaging 0.68% copper, 3.4 gram silver, 0.05 gram gold, 0.019% molybdenum.

Norsemont plans to focus exploration on higher grade, near-surface copper oxide mineralization which is easier to process as well as the high-grade skarn mineralization.