Taca Taca cha-cha: Rio returns option to Lumina (August 26, 2008)

Vancouver – After drilling six holes Rio Tinto (RTP-N, RIO-L) has passed the buck again on Taca Taca, giving its option on the Argentinean property back to Lumina Copper (LCC-V). And this, as Lumina announced, despite coring almost half a kilometre grading 0.75% copper, 0.025% molybdenum and 0.16 gram gold per tonne in hole 7 starting 228 metres downhole.

“We’re happy to get the property back,” Lumina president David Strang says. “It just doesn’t meet (Rio’s) criteria. But it will meet the criteria of others.”

He says the company plans to take Rio’s drill results, and in conjunction with previous ones, get a NI 43-101 compliant resource estimate out within the next six weeks. A historical resource had pegged Taca Taca at 240 million tonnes grading 0.41% copper.

But Strang says he expects to calculate an inferred resource with higher than historical grades, noting the recent round of Rio’s drilling.

“Rio Tinto encountered significantly higher grades than previous drilling,” he says.

Apart from the 426 metres encountered in hole 7, Rio also drilled 248 metres in hole 6 grading 0.89% copper, 0.036% moly and 0.11 gram gold starting 316 metres downhole and hole 3 hit 195 metres grading 0.78% copper, 0.030% moly and 0.29 gram gold beginning 292 metres beneath the surface.

On news of the results and the option return, Lumina’s share price remained unchanged at $1.25.

Taca Taca has a long history of major dance partners, with a total of 156 holes for about 24,000 metres drilled. Falconbridge started by punching in three holes during the late 1970s. BHP Minerals upped the ante in the late 1990s, pumping in an additional 33, only to pass it on to Corriente Resources (CTQ-V, ETQ-X).

And even Rio had a go of it before its more recent round. In 1999 it put in 9 holes before giving it back to Corriente.

Nearly ten years later, in January of this year, Rio announced its resurgence of interest in the property. It picked the option up again, this time from Lumina (then named Global Copper before Teck Cominco (TCK-T, TCK-N) acquired it and its Relincho property) for a potential exercise price of $80 million.

Rio’s drilling and interest over, that cheque will no longer be coming.

But Strang still sounds optimistic. With a resource estimate in hand he says Lumina plans on beginning its own drill program in the fourth quarter, subject to the availability of equipment.

“I think the estimate will form a strong basis to start stepping out,” he says.