Teck options into Strait’s Alicia

Teck Resources (TCK-T, TCK-N) has given Peruvian-focused junior Strait Gold (SRD-V) a boost by optioning into its Alicia copper project.

Teck’s local subsidiary Teck Peru has agreed to spend $30 million in exploration at the project or complete a pre-feasibility study on it, as well as pay $500,000 in cash and buy $600,000 worth of equity in Strait at a 100% premium to the company’s 10¢ closing price on Dec. 8.

“We are pleased to enter into this agreement with Teck, a partner that is capable of taking Alicia all the way to production,” stated Strait Gold president Jim Borland.

The 25.9-sq.-km Alicia project is located 60 km south of Cuzco in the Capacmarca district, and is still at an early stage of exploration with no resource estimate.

Strait itself optioned into the project in 2009 from Panoro Minerals (PML-V), though the option deal with Teck is significantly richer. To earn an initial 55%, Strait issued 500,000 shares to Panoro and spent US$650,000 on exploration. To earn 100%, the company has to issue 1 million shares and spend US$1.25 million within the first three years of the option agreement. Panoro has a 2% net smelter return royalty, which Strait had the option to buy half of for $2.3 million.

In the time it optioned the property, Strait has conducted 2,000 metres of drilling as well as extensive sampling and geotechnical work, and is waiting on a permit for a 10,000-metre drill program. The company’s latest results from soil sampling increased the size of the copper-in-soil anomaly by 1.6 km, which now extends for 3.4 km.

Results from the drill program included 134 metres grading 0.29% copper and 0.03 gram gold per tonne, and 19 metres carrying 1.25% copper, 0.15 gram gold, 13.3 grams silver and 0.012% molybdenite. 

The company’s initial drill program on the property was to test skarn mineralization along the northern contact of the intrusive centre, but results have since indicated the potential for a porphyry-copper deposit at Alicia. The company reports that recent geological mapping has identified four phases of porphyritic intrusion with associated alteration and mineralization, over an outcrop area of 1,400-by-900 metres within the larger geochemical and geophysical anomalies.

Strait’s share price was up 2¢, or 20%, to 12¢ with 2.5 million shares traded on the news. The company hit a 52-week high of 22¢ last January and a low of 4¢ in September.

The region has seen increasing interest from majors: HudBay Minerals (HBM-T) bought the Constancia copper project for $520 million in 2010; First Quantum Minerals (FM-T, FQM-L) spent $460 million acquiring the Haquira copper-molybdenum-gold-silver project; and Xstrata (XTA-L) is going ahead with its US$4.2-billion Las Bambas copper project, and spending US$1.47 billion on its Antapaccay copper mine.

Strait Gold also controls the Letra Rumi South and Culebrilla project in Peru’s Ancash Department, 325 km north of Lima.