Anglo American eyes Southwestern’s Antay project

Vancouver Days after releasing a scoping study for the Boka gold project in China’s Yunnan province, Southwestern Resources (SWG-T) inked a deal allowing a unit of Anglo American to acquire up to a 70% interest in its Antay copper project in Peru.

Anglo American also bought 57,848 shares of Southwestern for $10.62 per share, for proceeds of about US$500,000. The mining conglomerate agreed to buy another US$500,000 of shares within the next year, followed by a further US$4 million of shares over the next five years, subject to various conditions and regulatory approvals.

Anglo American also agreed to spend at least US$750,000 to explore Southwestern’s Antay property, situated in the northern extension of Southern Peru’s porphyry copper belt. The company can earn a 55% interest by spending US$5 million over five years, plus another 15% by funding a bankable feasibility study.

Southwestern had previously discovered three main areas of porphyry copper mineralization within erosional windows and structurally uplifted areas in a laterally extensive cover of young, post-mineralization volcanics.

Southwestern also holds a 90% stake in the Boka gold project situated in Yunnan province, China. The remaining interest is held by a Chinese partner. The company released a preliminary assessment of the project, which includes initial resource estimates for the Boka 1 North, Boka I South, and Boka 7 zones.

These zones collectively host indicated resources of 10.4 million tonnes averaging 2.88 grams gold per tonne, or almost 1 million contained oz, plus an additional 45.8 million tonnes at 2.75 grams, or about 4.05 million contained oz., in the inferred category.

The first-pass study by Hatch examined an open-pit operation capable of producing about 200,000 oz. gold annually, at cash costs averaging US$143 per oz. Capital costs range from US$139 million up to US$235 million. The proposed open-pit mine was based on indicated resources of 5.1 million tonnes at 2.93 grams, or about 480,000 contained oz., plus a further 18.1 million tonnes at 2.93 grams in the inferred category, for an additional 1.71 million contained oz. The strip ratio is estimated at 6.7:1 waste-to-ore over the proposed 10-year mine life.

Southwestern notes that more infill drilling is required to upgrade resources for incorporation into the pre-feasibility study, now under way. As part of the pre-feasibility study, the company plans to drive a large tunnel to test high-grade resources that could be developed into a potential underground mining operation.