BASE METALS — Drill program in Peru aims for Antamina lookalike

Major companies rarely bother exploring properties unless they see potential for mineral deposits big enough, or rich enough, to make an important contribution to their bottom line. That, in a nutshell, explains why shareholders of MacMillan Gold (MMG-T) are excited about the interest shown by Rio Tinto (RTP-N) in the company’s Minas Santa Rosa project in the Ancash province of northern Peru.

Early this year, Rio Tinto’s exploration arm formed a strategic alliance with MacMillan aimed at exploring Minas Santa Rosa. The project area consists of three separate concessions within the same geological trend that hosts the Antamina copper deposit (now being advanced by a consortium of three major companies) 80 km to the south.

The agreement allows Rio Tinto to earn a 51% interest in the project by spending US$4.5 million on exploration over four years. The major also must pay MacMillan US$500,000 in staged payments over the earn-in period.

As operator, Rio Tinto recently launched a drill program at the property aimed at testing significant alteration and base metal mineralization characteristic of porphyry copper systems. The initial program will consist of 3,200 metres and focus on two high-priority targets, namely, the Central and Southeast concessions. The initial surface work in these areas — which included mapping, lithogeochemical sampling and magnetometer geophysical surveys — is reported to have confirmed the presence of two areas of copper-bearing porphyry intrusive rocks.

Rio Tinto is now drilling the Central concession, which has a surface expression 900 metres wide by 700 metres long. Exploration work on the Southeast concession has outlined copper mineralization within an area measuring 250 metres by 200 metres. In addition, MacMillan notes, mineralization hosted in intrusive rocks has been identified in areas outside of these targets.

MacMillan holds other properties in northern Ancash province, including the 100%-owned Congoro concession, where a reconnaissance program is scheduled to begin this summer. The junior also holds numerous gold projects in Peru and other South American countries.

In March, Toronto-based Scorpion Minerals (SCP-T) completed a private placement of 4 million MacMillan shares at 40 cents each, plus 4 million warrants, netting MacMillan $1.6 million. At the same time, Scorpion Chairman Michael Farrugia joined MacMillan’s board.