Cancor looks to start Algerian mining boom

The fervor in the voice of Cancor Mines (KCR-T, CAOMF-O) president Kamil Khobzi is hard to miss when he talks about exploring in Algeria.

“I think Algeria’s going to be the next booming place in terms of mining,” says Khobzi, a native Algerian who’s called Canada home for more than 30 years.

In a move to open up the country’s mining industry, the Algerian government recently auctioned off eight properties, seven of which went to Chinese companies for between US$30,000 and US$500,000 and one to Montreal-based Cancor for US$70,000.

Cancor’s newest property is the 44.5-sq.-km Tan Chaffao copper-gold-base metal property in the Hoggar district, 250 km north of a town called Tamanrasset. Tan Chaffao is 45 km northwest of the Tan Chaffao East deposit, which is being explored by a British junior.

Some work was done on Tan Chaffao in the 1970s, uncovering several sulphide lenses with copper and gold discovered at surface, though little exploration has been done in the area since then. The lenses and associated stringers were found to be open laterally and at depth, extending 300 to 500 metres, and up to 55 metres thick.

Cancor will spend about US$1 million over two years for the first two phases of exploration, with US$100,000 reserved for an initial National Instrument 43-101-compliant report, and US$700,000 for geophysics, sampling and drilling, beginning this fall.

“We had to look to other horizons to get interesting projects at lower prices,” Khobzi says. “Today, any project in Canada is awful.”

Khobzi also has his sights set on a second Algerian property located along a 400-km-long gold structure just south of the Amessmessa gold deposit, currently under development by an Australian company.

“It’s like a Cadillac fault in the 1920s when nobody knew about it. Look at what’s happening (there) today,” Khobzi says of the activity along the 300-km fault zone, in Quebec, which has yielded about 100 million oz. of gold.

Khobzi has just returned from Algeria to present the technical offer for the second property, which was accepted. Now it will all come down to money. In July, Cancor will submit its financial offer — the property will go to the highest bidder.

In terms of risk, Khobzi lumps Algeria with many other so-called high-risk countries.

In the 1990s, more than 100,000 people were killed in fighting between the military and Islamist militants. Although a democratic government has been elected and violence has declined, the north African country has its share of economic, social and political problems.

“The risk is the same as every other country when you explore outside of Canada,” he says. “Of course, sometimes there’s a bomb blasting in Algiers, but that happens wherever you are. In London you get bombs, in Paris, in Istanbul.”

The most recent terrorist attack in Algeria, according to Foreign Affairs and International Trade Canada, happened on April 11, when suicide bombers killed at least 30 people and injured more than 300 others.

Cancor is raising $4 million to explore a number of projects in Quebec’s Abitibi region, but Khobzi says the financial cost of exploring in Canada today is quite high, which is what makes looking elsewhere so attractive.

“At a certain point, we have to take risks. Canadian junior companies are all over the world. . . I’m just wondering why there is no one in Iraq yet,” Khobzi says with a chuckle. “But I’m sure one day someone will be.”

Cancor is not the first Canadian company to acquire mineral rights in Algeria. A private company called Sahara Resources claims to be the first foreigner to do so in 2005. Landmark Minerals (lml-v, lmlmf-o) signed an option agreement with Sahara to explore for gold, copper and uranium, but soon after, the government cancelled all of Sahara’s permits without notice. Sahara and Landmark are still involved in a legal battle concerning those mineral rights.