Noranda takes shine to Brazilian base metals

Noranda (NOR-T) will earn a 70% interest in the Aripuana base metals project in Brazil’s Mato Grosso state from juniors Ambrex Mining (AMBX-C), Ourominas Minerals (OMI-T) and St. Genevieve Resources (SGV-T).

To earn its interest, Noranda has agreed to invest $28.9 million in the 2,000-ha property over the next five years. Initially, the major will earn a 55% stake by providing the following:

* property payments of $650,000 in 1997 and $150,000 in early 1998; * a $1.1-million payment in April 1998 to property royalty holders; * $2 million in exploration spending by the end of next year and a further $10 million over the following two years;

* and a final $3 million pro rata cash payment to its joint-venture partners at the time of a production decision.

Fulfilment of these requirements would leave Ambrex with a 22.05% interest in the property, Ourominas with 13.5%, and St. Genevieve with 9.45%.

Noranda can acquire a further 15% by spending $12 million on the property by the end of 2003. If satisfied, Ambrex’s interest would subsequently fall to 14.7%, Ourominas’s to 9%, and St. Genevieve’s to 6.3%.

Noranda is currently exploring the Valley volcanogenic massive sulphide deposit in an attempt to confirm known resources and find mineralized extensions to the deposit. The deposit was discovered by Ambrex in the fall of 1996 and has since been determined by Watts Griffis & McOuat to host drill-indicated resources of 2 million tonnes grading 10.7% zinc and 2% lead, plus 87.5 grams silver per tonne.

So far Noranda has drilled one short hole over discovery hole 8 in order to assess the geological controls on mineralization. After passing through 30.1 metres of oxidized material, hole 20 intersected 24.1 metres of exhalative sedimentary rocks, the first 5.4 metres of which contained three narrow intervals of massive sulphides. Hole 8 yielded 14.5 metres (from 129.7 to 144.2 metres) grading 10% zinc, 1.3% lead, 0.08% copper, 36.4 grams silver and 0.02 grams gold.

A second hole, No. 21, is testing for extensions to the mineralized interval intersected in hole 8. Starting at a vertical depth of 300 metres, the hole intersected 115 metres of variably mineralized exhalative sediments, within which are contained several intersections of massive, locally banded sulphides. The zone occurs roughly 150 metres downdip from the zone intersected in hole 8.

Results are still pending, and drilling of the hole continues.

Preliminary work, completed elsewhere on the property, has identified another area with potential for base metal mineralization. About 1.5 km southeast of the Valley deposit, Noranda has discovered a coincident electromagnetic and magnetic anomaly underlying surface gossans and soils anomalous in copper, lead, zinc and silver.

The area has not yet been tested by drilling.

In other news, Ourominas has received results from several holes recently drilled on its wholly owned Juruena property, also in southwestern Brazil.

In the latest program, four diamond drill holes tested the Arrastro Sul zone, while a fifth was drilled to test the Capixaba zone, 1 km to the southeast.

Gold values at the former zone ranged from 1.13 grams over 3 metres (from 12 to 15 metres) in hole 75 to 4.73 grams over 0.93 metre in hole 73. The latter intersection was contained in a larger mineralized interval of 1.85 metres (from 103 to 104.85 metres) averaging 2.63 grams.

At Capixaba, the company intersected three intervals of 3.7 metres (from 32.95 to 36.65 metres) grading 115.46 grams, 1.5 metres (from 37.5 to 39 metres) grading 2.56 grams, and 1 metre (from 166.5 to 167.5 metres) grading 15.67 grams.

Drilling is continuing in the Arrastro Hills area. As well, a sonic drill program is testing gold-bearing alluvium in the Capixaba area. The alluvial material was previously mined by artisanal miners.