Argentinian porphyry attracts Peregrine Metals (April 01, 2010)

Peregrine Metals (PGM-T) is fast-tracking a preliminary economic assessment on a solvent extraction-electrowinning (SX/EW) copper heap-leaching operation for its near-surface higher-grade copper mineralization at the Altar porphyry copper-gold project in Argentina.

The potentially leachable copper target could have a core zone with potential quantity and grade in the range of 60 to 100 million tonnes averaging between 0.60% copper and 0.70% copper as part of a larger leachable copper target whose potential quantity and grade is estimated to be in the range of 200 to 400 million tonnes grading between 0.40% and 0.50%, the company’s vice president of exploration, Jeff Toohey, outlined in a statement.

Four drills are currently turning at Altar, one of the largest recently discovered porphyry copper deposits in Latin America. The deposit sits at an elevation of 3,100 to 3,500 metres about 8 km from Argentina’s border with Chile, and is about 23 km by road from Xstrata‘s (XSRAF-O, XTA-L) feasibility stage El Pachon porphyry copper project.

Altar is in San Juan province, an area that also hosts Veladero, Barrick Gold‘s (ABX-T, ABX-N) producing gold mine, as well as the gold major’s advanced-stage Pascua-Lama development project. Yamana Gold‘s (YRI-T, AUY-N, YAU-L) producing Gualcamayo gold mine is also in San Juan province.

The current National Instrument 43-101 measured and indicated resource for Altar at a 0.4% copper cut-off grade is 251 million tonnes grading 0.52% copper and 0.07 gram gold per tonne for contained copper of 2.87 billion pounds and 0.57 million oz. gold.

In addition there is 244 million tonnes grading 0.54% copper and 0.056 gram gold for contained copper of 2.93 billion lbs and 0.44 million oz. gold. The resource was based on 64 drill holes completed prior to 2010, and the deposit remains open-ended laterally and at depth. A revised resource estimate is expected in the fourth quarter of 2010.

The deepest hole assayed to date, drill hole ALD 43, returned 719 metres averaging 0.72% copper and the bottom 322 metres averaged 0.90% copper. An 81-metre extension of this hole drilled to 1,010 metres earlier this year awaits assay results.

Peregrine Metals says Altar has “excellent access, relatively low elevation, ample water sources on-site and the topography is very suitable for mining, processing and heap leach pad infrastructure.”

All of that gives Peregrine “an important competitive advantage that we will fully investigate starting with the completion of an independent, NI 43-101 compliant, PEA over the next ten months,” Peregrine Metal’s president, Eric Friedland, declared in a statement.

The company has also identified large-scale epithermal gold potential in a 2 km by 1.5 km zone along Altar’s eastern edge. Rock chip samples collected returned assay values of up to 14.1 grams gold per tonne, 400 grams silver per tonne and 12.4% copper.

Peregrine Metals describes Altar as a large Andean-style porphyry copper deposit. The alteration zone takes up an area measuring over three by two km with a coincident induced polarization (IP) geophysical anomaly of approximately the same size.

The copper mineralization within the upper 300 metres of the deposit includes supergene digenite-covellite and hypogene chalcocite-bornite replacing earlier chalcopyrite. In several drill holes, higher grade copper mineralization is present at surface, and the average depth of the leached capping is roughly 80 metres.

In January Peregrine Metals started detailed outcrop sampling, excavator trenching, continuous rock chip sampling of road cuts and trenches, and an induced polarization and resistivity geophysical survey to further define the gold and silver potential and to guide preliminary drill testing.

The leached capping of the porphyry copper deposit transitions upwards into the roots of the high-sulphidation epithermal gold-silver system and together this large volume of material represents an attractive, potential bulk-tonnage, gold-silver target that likely would be removed as pre-stripping in accessing an eastern portion of Altar’s porphyry copper mineralization.

Approximately 80 holes, totalling 25,000 metres of core are scheduled to be drilled this year as part of the preliminary economic assessment.

In addition, the company will wrap up the first phase of a column leach metallurgical test-work program, continue environmental baseline and impact studies, and complete road, power, water and sulphuric acid optimization studies. The PEA is estimated to cost about US$11.35 million.

Since drilling began in 2003, a total of 112 holes have been completed to the tune of about 46,000 metres.

If the results of the SX/EW preliminary economic assessment are favorable, Peregrine Metals says it plans to start a preliminary feasibility study immediately.

The junior explorer holds a 100% interest in the Altar project subject to a 1% net smelter return royalty granted to Rio Tinto (RTP-N, RIO-L) and another 1% NSR royalty granted to the underlying concession owner. Peregrine has the option to purchase the second 1% NSR from the underlying owners at any time for US$1 million.

In addition to Altar, Peregrine Metals is working on the Quebrada de la Mina copper-gold exploration project near Altar, and the Pampa del Toro iron sands project in Peru.

In Toronto Peregrine Metals is trading at 89¢ per share. Over the last 52 weeks the junior has traded in a range of 80-$1.16 and has 117.5 million shares outstanding.