The results of a 22-hole, 2,480-metre program of reverse-circulation drilling have confirmed previous oxide resource estimates of the Barreal Seco copper project in north-central Chile.
States Atna spokesman Michael Williams: “There were no nasties in there, and [the drilling] confirmed everything we knew, and in some cases it looks like it’s going to add to the tonnage.” Atna is now beginning a core-drilling program to obtain sample material for metallurgical column leach testing.
The junior’s initial evaluation investigated the economic viability of a stand-alone, 10,000-tonne-per-year, solvent extraction-electrowinning (SX-EW) copper cathode operation. The conclusion was that such an operation is viable, even at a copper prices of US75-80 per lb.
Williams explained the company’s interest in the project: “It’s copper that’s close to production and that we can probably finance, and it’s oxide. It’s basically a leverage on copper price. At US75 copper, you are probably looking at break-even; at US80, it makes money; and at US85, it makes good money.”
The Barreal Seco property lies at an elevation of 1,200 metres, 80 km northeast of the coastal port of Chanaral and 50 km northwest of the El Salvador smelter-mine complex, held by the Corporacion Nacional Cobre de Chile (Codelco). The property is accessible by gravel road, off the Pan American Highway.
Past activity at the site included small-scale mining of copper oxides and sulphides. Rio Tinto’s predecessor, RTZ Mining & Exploration, optioned the property from 1992 through to 2000 before walking away. More than 20,000 metres of drilling were completed in the deposit area, including 85 holes in the oxide resource. RTZ estimated a 17-million-tonne resource of potentially minable oxides grading 0.7% copper at a stripping ratio of 0.2-to-1. An underlying sulphide resource stands at 54 million tonnes grading 0.65% copper, based on a cutoff grade of 0.4% copper.
Williams says Rio Tinto was looking for a big porphyry system and subsequently wasn’t interested in the oxide cap.
The specularite-rich breccia deposit occurs in andesitic volcanic and sedimentary rocks and measures 600 metres long, 180-300 metres wide and 450 metres deep. The oxide zone extends 90-120 metres below surface and is followed by a 10-to-20-metre-thick enrichment zone that overlies the primary sulphide mineralization. Copper oxide mineralization consists of atacamite, malachite and chrysocolla. Secondary sulphides are mainly chalcocite and covellite. Hypogene mineralization comprises chalcopyrite and pyrite, with minor bornite.
Prefeasibility
Atna entered into an agreement in June to acquire the rights to the Barreal Seco property. The company has six months in which to complete a prefeasibility study before having to commit to a 50-50 joint venture with the property-owners. Atna is responsible for arranging the project financing through to commercial production. Once a production decision is made, Atna will be required to buy out the vendor’s half-interest for US$5 million, payable in five annual instalments of US$1 million. Atna will have 30 months in which to advance the project to production before any payments are due.
In an earlier statement, Atna President David Watkins said his company “intends to actively pursue other properties in the area and is planning to use Barreal Seco as a central processing plant, acting as a catalyst to unleash the potential of other deposits.” Toward this end, the company is negotiating to acquire other Chilean copper oxide deposits.
Atna recently drilled two holes at the Teresa Chica zone, 2.5 km southeast of Barreal Seco, and intersected 26 metres grading 0.41% copper and 16 metres grading 0.27% copper.
Elsewhere in Chile, the company is negotiating for further ground in the Chanarcillo district, 60 km south of Copiapo. In January, Atna picked up an option to earn a 100% interest in 36 sq. km centred on the historic Chanarcillo silver mining district for US$50,000, to be paid over two years, and thereafter an annual advance royalty payment of US$25,000. A separate option agreement concerning a 1.5-by-1-km claim covering the core area of the project is under negotiation.
Historical producer
The core area hosts more than a dozen old silver mines, which primarily operated between 1865 and 1915. Recorded production from these mines exceeded 100 million oz. silver. Historical production was from oxidized veins and mantos. The depth of oxidation varies from 200 to 500 metres.
Several stratabound zinc-rich massive sulphide manto bodies occur at various depths in the old workings. These sulphide bodies were never mined, owing to lack of oxidation and the associated difficulties of extracting the silver from sulphide minerals. Atna believes the Chanarcillo district represents a potential carbonate replacement target, which has received minimal modern exploration and no drilling. A small initial program of evaluation is planned this year, and the company says it is considering bringing in a partner to reduce costs and risk.
Earlier this spring, Atna tested the downdip extension of polymetallic mineralization beneath the old Lone Pine mine workings, near Prescott, Ariz., without much success. Three holes, totalling 408 metres, were drilled below the mined-out oxide body to determine the extent of high-grade base- and precious-metal massive sulphide mineralization. The holes cut narrow sections of disseminated to semi-massive sulphide mineralization in sericitic and iron carbonate altered rock. The thinning of the mineralization below the old workings may be the result of complex folding, Atna states.
During the coarse of this program Atna examined other volcanogenic massive sulphide prospects in the same belt of rocks, resulting in the staking of mineral claims over another old mine site that was worked in the early 1900s. Select dump samples of banded massive sulphides yielded values of up to 10% copper and 6.6 grams gold per tonne. The project remains on hold until metal prices improve, says Williams.
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