Drilling by
Situated in Matto Grosso state, the project is a joint venture in which Anglo has a 70% interest, and
The drill hole, guided by a recent structural reinterpretation of the Valley deposit and Anglo’s nearby Arex massive-sulphide deposit, has the highest grade yet encountered in drilling on the Aripuana property. A 9-metre interval carried grades of 16.6% zinc, 5.4% lead and 156 grams silver per tonne.
A second hole, wedged from the first, cut 6.5 metres that graded 7.5% zinc, 2.2% lead and 77 grams silver at a shallower depth.
The two successful holes followed four tests of structural targets in the same area, which did not intersect significant base metal mineralization. At least one of the holes is believed to have overshot the mineralized zone; two others, which tested an electromagnetic conductor, found only massive pyrite and pyrrhotite.
The new structural interpretation of Valley postulates that the deposit partly mimics Arex, which plunges shallowly to the northwest and dips moderately northeast. Valley is believed to be in a nearly isoclinal synform, the axis of which plunges gently to the northeast, like Arex.
The interpretation is supported by several characteristics of the deposit, as detected in previous drilling: the massive sulphide horizon appeared to recur in some drill holes; chloritized and sericitized host rocks enveloped the mineralization on both sides; and a long copper-gold zone on the northeastern side of the deposit appeared to assume a pipe-like shape.
The Arex deposit has a known strike length of around 1,200 metres. Valley is 950 metres to the southeast, with a known strike length of 460 metres. Valley’s resource has been estimated at 11.7 million tonnes grading 6.29% zinc, 2.25% lead, 0.07% copper, 65 grams silver and 0.3 gram gold. Anglo has not released a resource for Arex but says the deposit is of comparable size and grade.
Anglo, which will have spent about US$1 million by the end of the year, is well ahead of its spending commitment on the project, having drilled 1,000 metres beyond an original budget of 2,000 metres. The joint-venture agreement requires that Anglo spend US$3.25 million by mid-2003.
Among the principal factors that will govern the project’s economics is the distance from tidewater: Aripuana is about as far as you can get from the sea coast anywhere in South America. Still, there is a deep-water port on the Rio Madeira at Porto Velho, about a 1,000-km drive on paved roads.
The alternative may be to try hydrometallurgical production of metal on-site, since there is potential for low-cost hydroelectric power near the site. The partners’ current thinking is that, in order for this option to be feasible, a resource of about 50 million tonnes, at grades comparable to those of the present Arex and Valley resources, would have to be established.
The partners plan to prove up the existing tonnage on the Arex and Valley deposits, and investigate possible extensions to Valley (as implied by the new structural interpretation). Also, Anglo will apply its in-house SPECTREM electromagnetic system to the joint venture’s ground and to two wholly owned properties along strike to the southeast. Drill-hole electromagnetic surveys are also in the works for Arex and Valley, and Anglo intends to cover a large area using controlled-source magnetotelluric prospecting.
The joint venture comprises both Arex and Valley, as well as a broader land package. Both Karmin and St. Genevieve are carried through to a final independent feasibility study.
Meanwhile, Karmin plans to settle an outstanding debt of $1.7 million by issuing just under 5.2 million shares.
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