LATIN AMERICA SPECIAL — Corner Bay Minerals compiling

Having spent four years identifying and acquiring copper projects in Mexico, Corner Bay Minerals (TSE) is more intent than ever on becoming a junior producer.

The Toronto-based company is involved in three joint ventures in the country, including Las Vigas in Chihuahua state. The project consists of three exploration concessions, one optioned by its Mexican subsidiary and two others staked by Corner Bay. These concessions were subsequently optioned to Dragon Gem (VSE), which can earn a 50% non-operating interest by funding US$1 million worth of exploration during three years.

Sampling, mapping and geophysics have outlined five oxide copper zones within sedimentary “red bed” stratigraphy. This stratigraphy consists of sandstones, siltstones, shales and conglomerates of the Las Vigas Formation. Corner Bay carried out a 20-hole diamond drill program consisting of 2-hole fences spaced at 500-metre intervals. Assay results are pending. A second project, Cerro Verde, in neighboring Sonora state, was optioned by Corner Bay in 1994. Since then, the company has completed mapping and lithogeochemical and geophysical surveys, outlining an area of copper oxide mineralization roughly 1 km long by 300 metres wide.

Within this zone is a prominent hill where a 100-metre vertical extent of copper oxide mineralization has been outlined. This hill is thought to be a zone of supergene enrichment, as well as the surface expression of a deeper porphyry copper system.

After completing one season of field work on Cerro Verde, Corner Bay was approached by Tucson-based Magma Copper (NYSE). The copper producer has since joint-ventured the property and can earn a half interest by making cash payments, incurring exploration expenditures and carrying out a prefeasibility study.

The first exploration target on Cerro Verde is the near-surface oxide copper mineralization. If the deposit proves economic, copper could be extracted using solvent extraction-electrowinning. Magma will also drill to test for deeper sulphide ores. The program, the cost of which is estimated at US$1 million, should start within the next month or so.

At Corner Bay’s third joint-ventured project, known as La Crisas-El Pacto, also in Chihuahua, another drill program is set to start.

The junior originally optioned ground in the area in fall of 1993. Meanwhile, Noranda (TSE) had also been acquiring ground in the area. Earlier this year, the two companies decided to pool their present and future land holdings in the area and work together.

The pooled ground positions are underlain by at least two copper-bearing systems, identified by geological mapping, sampling and geophysical surveys. Under the agreement, Noranda is required to spend the first $2 million on exploration and pay Corner Bay US$175,000 during the next three years. Corner Bay is then required to spend the next US$3 million, and an equal joint-venture partnership will then be formed.

Should Corner Bay elect not to proceed, its interest will be converted to a 2% net smelter royalty.

Corner Bay President Peter Mordaunt described the joint ventures as “a win-win situation for us.” In all cases, the partners of Corner Bay are funding the initial exploration and taking the risks, leaving the junior free to look at other ground and to put together additional interesting deals.