Peruvian exploration pays off for Arequipa Res.

Arequipa Resources (TSE) has identified several gold prospects along an 80-km-long belt of rocks in northern Peru.

Additional mapping, sampling and trenching will attempt to firm up these discoveries, which exist in the Cordillera Blanca and Negra districts. Arequipa holds 87 claims, covering more than 67,000 hectares, in the two districts.

The work will focus on the 4,000-hectare Pierina property, where 97 surface samples were collected from an area measuring 600 metres long and 150 metres wide. These averaged 1.59 grams gold per tonne and included values of up to 8.3 grams gold and 242 grams silver.

The property forms part of the Ancash fault, a north-south-trending zone that cuts the western boundary of the Cordillera Blanca batholith and brings Tertiary-age volcanic rocks into contact with Mesozoic sediments. A series of younger, porphyry intrusions occur at the intersections of major east-west faults.

The region also hosts Arequipa’s Paron gold deposit and California IV prospect. The former hosts a near-surface resource of 2 million tonnes grading 3.11 grams gold per tonne. Additional results from a 2,000-metre drill program are pending.

Meanwhile, road building is under way at the joint-ventured Ferrol gold prospect in the Yanacocha district. Newcrest Resources, a wholly owned subsidiary of Australian gold producer Newcrest Mining, can initially earn a 49% interest by funding all of Arequipa’s underlying option payments and spending US$1.8 million on exploration over four years.

Newcrest can increase its interest to 60% by completing a feasibility study, and can earn a further 5% under certain conditions. Drilling is about to begin.

Elsewhere in Peru, at the Los Calatos copper porphyry prospect, Arequipa’s joint-venture partner, Phelps Dodge (NYSE), has drilled 20

reverse-circulation holes, with diamond drilling set to follow.

Phelps Dodge can earn up to a 60% interest in Los Calatos by making certain expenditures and cash payments.