Western Pacific Mining joins Pan American Resources in Chile

Montreal-based junior Western Pacific Mining Exploration (WPC-M) and Toronto-based Pan American Resources (PAN-M) will jointly develop one producing and two past-producing properties, near Vallenar in central Chile.

An agreement calls for Wespac to pay Pan American $600,000 in cash and commit to US$1.9 million in work expenditures on the three properties over the next three years. The deal is subject to legal due diligence and approval by the Montreal Exchange.

In order to earn a 37.5% interest in the Primavera mine property, Wespac must make a US$400,000 cash payment to Pan American and place US$1.1 million in escrow to fund the development program. A third party holds a 25% carried interest on the property; consequently, property expenditures in excess of US$1.1 million will be funded equally between Wespac and Pan American.

The Primavera mine historically was a small-scale family operation. Pan American completed underground mapping, sampling and 3,200 metres of drilling at the mine during 1995 and 1996. Current measured, indicated and inferred resources, as reported by Pan American, are 796,509 tonnes grading 2.6% copper and 6.4 grams per tonne gold. These are hosted in a 3-to-4-metre-wide shear zone.

Wespac and Pan American propose to develop and mine the deposit from a ramp at the rate of 250 tonnes per day for the first full production year (beginning in 1998) and at 500 tonnes per day thereafter.

Ore produced during the first year will be custom-milled nearby. The partners then intend either to purchase a local mill or build one on site.

Wespac and Pan American believe there is strong potential for developing additional reserves near surface and at depth in the immediate area of the proposed ramp. The ramp will be driven through a zone of copper-gold skarn mineralization.

The area has never been systematically explored for either skarn or porphyry copper mineralization.

To acquire a 50% interest in the San Antonio property, Wespac must make a cash payment of US$200,000 to Pan American and complete US$700,000 of exploration and development work there within three years. The San Antonio property includes a former small-scale, high-grade copper mine. Current resources in the San Antonio vein are 7.8 million tonnes grading 0.47% copper plus 600,000 tonnes of oxide ore grading 1.16% copper and 60,000 tonnes in surface dumps with an average grade of 1.7% copper.

To earn a 50% interest in the Carrizal Alto mine property, Wespac must fund the first US$100,000 of expenditures on the property, which was the site of several turn-of-the-century copper, silver, gold and uranium mine operations. The property hosts waste dumps of 420,000 tonnes grading 1.3% copper and 600,000 tonnes of tailings grading 0.6% copper. Wespac plans to complete a feasibility study to determine the best manner in which to process this material. A program to explore the on-strike extensions of the main mineralized shear zones will also be carried out.

Meanwhile, at Westpac’s gold project in the Solomon Islands, additional soil-sampling results have been obtained on the Hornbill target, the first of four targets on the Fauro Island permit.

Assay results from 68 soil samples collected in the area of the LD-2 soil anomaly (1.7 grams gold per tonne) yielded four samples with values greater than 1 gram gold per tonne. Only four samples assayed less than 0.1 gram gold. A rock sample from the LD-2 anomaly assayed 4.18 grams.