El Nino Falls On Results From New DRC Project

VANCOUVER–The first full set of drill results from El Nino Ventures’ (ELN-V, ELNOF-O) Kasala copper discovery in the Democratic Republic of the Congo (DRC) left investors unimpressed: El Nino’s share price fell almost 50% on the news.

El Nino picked up a 70% interest in a 350-sq.-km land package in the DRC’s copper belt in mid- 2007. In October 2008, drills hit the first significant intercept from the new project: hole 23 returned 29 metres grading 2.82% copper and 0.34% cobalt starting 17 metres down-hole, within an 80- metre interval averaging 1.42% copper and 0.13% cobalt.

El Nino dubbed the area the Kasala project and quickly followed up on hole 23 with 75 more holes. The results outline an area of mineralization — the Kasala Main zone — that strikes 800 metres and stretches 250 metres in width. Intersections in some holes indicate thicknesses up to 90 metres. The zone is still open in all directions and at depth.

Some of the strongest grades came from the northeast corner of the Main zone, where hole 11A cut 30 metres grading 1.88% copper and 0.11% cobalt starting 63 metres down-hole, including 5 metres of 4.91% copper and 0.016% cobalt. Nearby, hole 11B returned a much longer intercept: 91 metres grading 1.19% copper and 0.1% cobalt, from 78 metres depth. That intercept included a 10-metre section grading 6.07% copper.

Some 50 metres southwest, hole 8 returned 70 metres of 1.19% copper and 0.03% cobalt, starting 40 metres down-hole and including 31 metres of 2.19% copper. Stepping another 50-odd metres southwest, hole 29 cut 56 metres of 1.11% copper and 0.01% cobalt from 13 metres below surface.

In the northwest, hole 27 hit another long mineralized intercept: 91 metres grading 1.16% copper and 0.033% cobalt. Farther to the northwest, hole 26 cut 21 metres of 2.42% copper and 0.088% cobalt from 26 metres depth.

And hole 16 returned the first polymetallic intercept at Kasala. The hole, collared roughly 100 metres south of the Main zone cut a 12-metre intercept carrying low-grade copper that included 1 metre carrying 1.22% lead and 1.51% zinc.

Investors, it seemed, were expecting more. On the drill results, El Nino lost 8.5¢ or 47% to close at 9.5¢ The company has a 52-week trading range of 3.5-92¢ and has 40 million shares outstanding, or 49 million fully diluted.

Copper mineralization at Kasala is hosted in a series of pervasively fractured dolomitic shales and breccias of the Mwashya group, which is the uppermost unit of the Roan supergroup. The Roan supergroup hosts most of the large copper and cobalt deposits in the Congolese copper belt.

At Kasala, oxide copper mineralization or malachite occurs as fracture coatings and small agglomerations in the fractured shales and breccias. Mixed malachite and chalcocite mineralization occurs in iron-rich mudstones. And pure sulphide or chalcocite mineralization is found in stockwork veinlets and disseminated grains in granitic shale.

The oxide mineralization is typically lower in grade but often presents as a thick sequence, giving drill intercepts as wide as 90 metres. The mixed oxide-sulphide zone carries the highest grade of the three zones but is only 5 to 10 metres thick. The pure sulphide mineralization zone is intermediate with regards to both grade and thickness.

El Nino recently completed an induced-polarization (IP) survey across the Kasala area and across an area to the northwest of Kasala Main that is being referred to as Kasala Nord. The results indicate an extension of the Main zone to the southeast, to an area that was not drill tested, and generated numerous targets for additional testing.

It seems El Nino likes the DRC. In mid-December, the company closed an agreement with Phoenix Mining, a Congolese mining company, to earn a 70% interest in another research permit, called PR 9316. El Nino is paying US$2.2 million over four years and contributing 300,000 shares over three years for its interest, as well as acting as operator and sole financier for exploration activities at the site. The 25-sq.-km property is 5 km southeast of Gcamines’ Luiswishi copper-cobalt mine and 8 km northwest of South Africabased Metorex’s Ruashi copper-cobalt mine.

It is worth noting that El Nino’s land position in the DRC is not under review in the mining contracts review currently under way in that country. The company obtained its land under the DRC’s new mining code.