Rio Tinto joins Pangea in Peru

A subsidiary of Pangea Goldfields (PGD-T) has optioned the Huancavelica gold property in central Peru to Rio Tinto (RTP-N).

The major can earn a 55% interest in the property by making staged payments and exploration expenditures totalling US$3.3 million over four years. If requested by Pangea, Rio Tinto must also carry out a feasibility study, which would boost the latter’s interest to 75%.

The property is underlain by a carbonate formation that has been intruded by Tertiary-aged volcanic rocks. Polymetallic mineralization has been observed in the contact zones of the rock formations, and, elsewhere on the property, geochemical surveys have outlined areas anomalous in gold.

Rio will begin an exploration program following a due diligence review.

Meanwhile, Pangea is carrying out a 12,000-metre drill program at its jointly owned Victoria polymetallic property, also in Peru. Results from the latest completed holes are expected shortly.

Pangea holds a 50% interest in Victoria, as does Sundust Resources (SUN-M).

The latter must repay a US$1-million loan to Pangea by year-end or have its interest diluted on a pro rata basis.