Noranda tables La Fortuna inferred resource

Noranda (NRD-T) has released an inferred mineral resource estimate for the La Fortuna porphyry copper-gold discovery on Metallica Resources‘ (MR-T) El Morro copper-gold project in north-central Chile.

Base on 25 diamond drill holes (on 200-metre spacings) tallying 10,545 metres of drilling, the La Fortuna zone is estimated to contain inferred resources of about 410 million tonnes grading 0.61% copper and 0.56 gram gold per tonne. The estimate employed a copper cut-off grade of 0.4%.

The vast majority of the resource (350 million tonnes) comprises primary mineralization running 0.58% copper and 0.6 gram gold. Another 60 million tonnes of supergene enrichment zone mineralization grades 0.76% copper and 0.27gram gold.

At a cut-off grade of 0.3% copper, the resource jumps to 540 million tonnes averaging 0.55% copper and 0.51 gram gold. In this scenario, 475 million tonnes of primary mineralization runs 0.52% copper and 0.54 gram gold. Supergene mineralization amounts to 65 million tonnes grading 0.73% copper plus 0.26 gram gold.

The resource remains open to the north, northwest, and at depth. La Fortuna’s copper-gold mineralization covers a 500-by-800-metre area. A lower-grade halo extends over a minimum area of 1,200 by 900 metres.

Noranda’s general manager for exploration in the southern hemisphere Michael Donnelly, said, “Noranda is very encouraged by the results shown in the resource study as we proceed with plans for the next stage of diamond drilling. We are optimistic that we can expand the resource at La Fortuna as well as develop new exploration targets on the joint venture lands.”

Planned drilling for 2001-2002 is aimed at determining the limits of the La Fortuna porphyry zone as well as providing some infill data, plus the testing of several new exploration targets. An initial 12,000-metre drilling program is slated to begin in mid-November. An additional 5,000 metres are scheduled for completion by year-end.

Noranda recently notified Metallica that, as part of a revised joint-venture agreement for the El Morro copper project, it will buy US$1 million worth of Metallica shares.

Noranda will pay a 50% premium over the market price. The price per share will be determined by an average of the last 60 trading days before Metallica was notified. Noranda then has 45 days in which to complete the transaction. The deal will give Noranda 918,563 Metallica shares at an average price of $1.67 apiece, or about 3.3 percent of Metallica’s outstanding common shares.

Noranda can earn a 70% stake in El Morro by spending US$10 million on exploration and paying Metallica US$10 million by September 2005. After Noranda completes the earn-in, Metallica has a one-time option to have the major provide for 70% of its share of development costs at an interest rate of Noranda’s cost of financing plus one percent.

Exploration on the El Morro property has so far turned up three principal zones of copper-gold, porphyry-style mineralization, La Fortuna, El Morro, and El Negro, plus a fourth zone, Cantarito, which is a high-sulphidation, epithermal-gold system related to La Fortuna.