Augusta scoops up high-grade skarn

Vancouver – Augusta Resource Corp. (ARS-V) has struck a deal for a 100% working interest on the Lone Mountain high grade copper-zinc-silver project in New Mexico, with a private partnership. The property is well-positioned, nine miles southwest of Phelps Dodge’s (PD-N) Chino mine, and 5 miles northwest of Phelp’s Hurley copper smelter. The town of Silver City is five miles from the property.

Augusta president, Richard Warke says “the location is fantastic, and the grades, more importantly, are very attractive and economic, obviously. And from everything we see in the data, we really feel we can double or triple the resource with a bit more drilling.”

The property had been drilled in the late 1970s by Kennecott, followed by Chevron and Granges in the mid 1980s.

Chevron calculated a historical resource in two separate zones of mineralization in 1983. The Lake Valley zone was found to contain 7.35 million tons grading 2.2% copper, 5% zinc, and 1.2 oz. silver per ton, at a 1% copper cutoff grade. At the same cut-off, the Lower Paleozoic zone contains 17.5 million tons grading 1.36% copper. This increases to 94 million tons grading 0.74% copper, at a 0.5% cutoff.

These resources were later verified by way of a study by Pincock Allen and Holt, and also confirmed by Cypress Minerals in 1991.”A group of four geologists jumped on the ground as the climate in New Mexico warmed towards the mining sector last December,” says Warke.

The renewed optimism in the state’s mining sector is owing to the state revamping its mining laws and reducing its take from production from 5% to a 2% NSR.

Augusta plans to verify the historical resources by conducting infill drilling at tighter drill spacings in an effort to bring them into compliance with National Instrument standards.

Lone Mountain appears to be a buried high-grade copper-zinc-silver skarn, hosted by Mississippian limestone (Lake Valley). This part of the deposit starts at 550 metres depth. Further down, lower Paleozoic dolomite-limestone host copper mineralization near their contact with a Tertiary quartz-monzonite porphyry stock. The skarn-type mineralization is structurally and stratigraphically controlled.

Augusta plans to step-out to drill test the extent of the mineralized zones which remain open to the northeast and northwest. An unexplored area west and south of the known mineralization includes several surface silver-manganese showings which are slated for drilling.

For its part, Augusta must pay US$1 million in cash plus 325,000 shares and complete US$4.85 million in exploration over the first three years of the deal.