Reko recalculated (January 12, 2006)

A new resource estimate from Tethyan Copper (TYC-A) on the Reko Diq copper project in Balochistan province, Pakistan, has moved a significant part of the project’s inferred resource into the indicated category, while adding new inferred resources.

The new resource, put together by the company and by consulting firm Snowden Mining Industry Consultants, is based on drilling in 2005 and upgrades most of the very large Western Porphyries resource, as well as putting numbers to two more zones on the property.

The Western Porphyries, the largest deposit on the property, now has an indicated resource of 943 million tonnes grading 0.54% copper and 0.28 gram gold per tonne, plus an inferred resource of 666 million tonnes at 0.54% copper and 0.31 gram gold. Previously the resource was 729 million tonnes running 0.64% copper and 0.39 gram gold per tonne, all of it inferred.

The increase comes both from an extension of the deposit through drilling and from dropping the cutoff grade to 0.3% copper from 0.5%. Even so, moving the cutoff grade of the current resource to 0.5% leaves an indicated 732 million tonnes at 0.59% copper and 0.33 gram gold, plus an inferred 521 million tonnes at 0.6% copper and 0.36 gram gold.

The project’s H8 resource has been expanded as well, to 177 million tonnes grading 0.4% copper and 0.2 gram gold per tonne in the inferred category and another 159 million tonnes grading 0.4% copper and 0.2 gram gold. A previously calculated inferred resource came to 270 million tonnes at the same grade.

Two wholly new inferred resources have been added to the inventory: at H13, a resource of 213 million tonnes at a grade of 0.4% copper and 0.4 gram gold per tonne, and at H35, 45 million tonnes grading 0.3% copper and 0.6 gram gold per tonne.

There was no further work on the most advanced resource, at Tanjeel, where a probable reserve of 129 million tonnes grading 0.7% copper had already been calculated for the main oxide zone, based on feasibility results that are currently being revised.

Tethyan, which holds 75% of the property, recently inked an agreement with Chilean miner Antofagasta (ANTO-L) to turn its part of the project into an equal joint venture and to buy out a back-in right held by BHP Billiton (BHP-N, BLT-L). Antofagasta pays US$37.5 million to get in and US$50 million to get BHP out, while taking down a 20% shareholding in Tethyan for US$20.5 million. Tethyan is carried for the next US$75 million in project costs.

The government of Balochistan holds the other 25%.