Arequipa drilling delivers the goods

Results from the first hole drilled on the Pierina prospect in Peru surpassed market expectations for Arequipa Resources (AQP-T).

The hole, part of an initial 5,000-metre program, returned an 88-metre intersection, starting at surface, grading an average of 6.58 grams gold per tonne.

The hole was drilled to a total depth of 158 metres, returning anomalous values from 88 metres to the bottom of the hole.

Arequipa purchased the prospect as part of an extensive property acquisition program in Peru under the direction of Chairman David Lowell.

Previously, Lowell managed five separate exploration programs which resulted in the discovery of large, economic orebodies, the most noteworthy being La Escondida in Chile.

The drilling follows a pitting and tunneling program, the results of which helped propel Arequipa’s share price to $20 from $2.50 at the start of the year. Subsequent release of assays from the first drill hole pushed the issue to $30.50, giving the company a market value of about $1 billion based on its 35 million shares outstanding (fully diluted). At presstime, the issue was trading at $34.

Gold mineralization at Pierina is hosted in silicified, alunitized and highly leached tuff and ignimbrite of the Calipuy Formation. The volcanics are underlain by Mesozoic limestones, quartzites and shales.

The property is accessible via 5 km of newly constructed road and 10 km of upgraded road to the nearest town. The town is linked by paved highway to Lima.

The test pitting included 92 pits, 63 of which returned values greater than 0.5 gram over a contiguous area measuring roughly 267,000 metres. The pits ranged from 2 to 5 metres in depth and returned an average grade of 4.22 grams gold.

The Pierina prospect measures 267,000 sq. metres. Within an area measuring some 190,000 sq. metres, 47 pits returned values greater than 1 gram gold (averaging 5.41 grams).

Arequipa drove two roughly parallel tunnels about 200 metres apart into the high-grade area of the hillside.

Adit 1 returned an average grade of 4.85 grams gold and 180 grams silver from 3 to 110 metres, while adit 2 averaged 7.81 grams gold and 201 grams silver from 6 to 44 metres.

The first hole was drilled vertically, roughly in line with the end of adit 1.

Arequipa’s president, Catherine McLeod, says the company plans to twin the first hole (a core hole) with a reverse-circulation (RC) hole.

A raise will be driven from adit 1 to surface in the area of the first hole to see how assay results compare.

McLeod says the drill program is set up on a 100-metre grid and that the work will be considerably faster and cheaper when RC drilling is employed.

In the meantime, core drilling is continuing, and results from the second hole (on the grid 100 metres south, and 100 metres east, of the first hole) are pending.

Preliminary metallurgical work is returning encouraging results.

Samples from adit 1 returned leach recoveries of more than 90% during a 48-hour test, whereas samples from adit 2 returned 81-87%.

Most of the rock in adit 1 is oxidized, while that in adit 2 has a sulphide content in the region of 5%.

More metallurgical tests are planned.