Southwestern inks nickel-copper-PGM joint venture with Inco

Vancouver — With nine years of Chinese exploration experience under its belt, Southwestern Resources (SWG-T, SWGGF-O) has agreed to be the initial operator of a newly formed joint venture with Inco (N-T, N-N) to explore for nickel, copper, and platinum group elements (PGEs) in Yunnan and Sichuan provinces, in China.

Inco, which has also been active in China for many years, and Southwestern will each contribute technical data relating to the area of interest to obtain a 50% participating interest in the joint venture. Funding will be on a pro rata basis.

The area of interest covers about 130,000 sq. km of ground surrounding Southwestern’s Boka gold project in Yunnan province. A prefeasibility study under way at the advanced project will include new resource and reserve estimates, and engineering and environmental studies related to potential mine development.

A previous “first-pass” study examined an open-pit operation that would produce 200,000 oz. gold annually, at cash costs averaging US$143 per oz., for at least a decade. Capital costs ranged from US$139 million to US$235 million, while the strip ratio was estimated at 6.7:1 waste-to-ore. The proposed Boka mine plan was based on indicated resources of 5.1 million tonnes at 2.93 grams gold, or about 480,000 contained ounces, plus a further 18.1 million tonnes at 2.93 grams in the inferred category, for an additional 1.71 million contained ounces.

Southwestern has a 90% interest in Boka. Along with drilling to define gold resources in several priority zones, the company has been evaluating the surrounding land package for several years, specifically for “Norilsk-type” nickel-copper-PGE mineralization. The company says several prospective areas have been identified that will be the initial focus of exploration programs supported by the joint venture.

Southwestern is also exploring for porphyry copper-gold deposits in southern Yunnan province under a joint venture with a unit of Newmont Mining ( NMC-T, NEM-N). The company also holds several projects in Peru, including the Antay joint venture with Anglo American (AAUK-Q). The Antay copper-molybdenum porphyry project is situated 150 km southeast of Cuzco, within the Tintaya Bambas copper belt. Anglo can earn a 70% interest by completing a bankable feasibility study and subscribing for US$5 million in Southwestern shares.

A first-phase drilling program operated by Anglo is under way at the Ccora Sur porphyry target at Antay. Previous mapping and sampling identified anomalous copper-moly mineralization in highly leached stockwork porphyry and overlying quartzite, coincident with a sizable induced-polarization anomaly. The first-phase program will consist of about 1,500 metres to test the chargeability anomaly at depth.