BC copper plays heat up

Vancouver Reminiscent of the 1970’s, copper-gold porphyry exploration has once again taken centre stage in the hunt for metals in British Columbia.

Leading the way is a new discovery by Imperial Metals (III-T). The junior recently completed a 16 hole drill program on the Northeast zone on the past producing Mount Polley copper-gold property some 56 km northeast of Williams Lake.

Lying only 1.5 km northeast of the Bell pit, all of the holes, excluding one that was abandoned, hit significant mineralization over the 275 metre area tested. The latest results include holes 14 through 16, which returned 169 metres grading 1.06% copper, 0.37 gram gold and 6.65 grams silver per tonne, 135 metres grading 1.16% copper, 0.35 gram gold and 9.58 grams silver, and 112.3 metres grading 0.63% copper, 0.2 gram gold and 4 grams silver, respectively.

Most promising is that the mineralization remains open, with hole 15 marking the southerly most hole.

The new zone is hosted in the same type of hydrothermal breccia as the other three deposits (Cariboo, Bell and Springer) on the property but magnetite is lacking, actinolite is sporadic and secondary biotite appears to be the dominant alteration mineral associated with the higher-grade values. The mineralization is dominantly sulphide comprising bornite and chalcopyrite with oxides disappearing after only a few metres depth.

Imperial has now moved the rig from the Northeast zone over to what was originally thought to be the most promising targets, expanding the resources below the Springer and Bell zones.

The junior plans on punching 4 holes below the Bell pit, which holds probable reserves of 3.4 million tonnes grading 0.36% copper and 0.36 gram gold.

At the essentially unmined Springer zone, which holds 15.3 million tonnes of probable reserves grading 0.4% copper and 0.39 gram gold, Imperial has laid out four holes for the current program.

The junior, with 19.7 million shares outstanding, has a 52-week trading range of $0.30 to $5.15 and currently trades at around $5.

Moving further northwest, bcMetals (C-V) is in the midst of an aggressive drill campaign on its newly acquired Red Chris copper-gold project.

The junior just added $5.25 million to its coffers through a bought deal with Haywood Securities. The private placement comprises 3.5 million units priced at $1.50 each. A unit holds one share and half a warrant. A full warrant entitles the holder to buy an additional share at a price of $2.50 for a three year period. Haywood has the right to acquire 350,000 shares at $1.50 per share for 6 months from closing.

Earlier this year, the junior picked up Teck Cominco‘s (TEK-T) 10% working interest and a 10% carried interest in the property, as well as back in rights to 43.75% of bcMetals’ 80% interest. The price tag is $300,000 and 250,000 warrants at closing. The warrants are exercisable at $0.60 until the end of 2006. In addition, bcMetals must issue a total of 1.5 million shares with 1.25 million warrants in 2004.

The warrants have an exercise price at a 20% premium to the market price at the time of issuance in the first year, a 40% premium in the second year and a 50% premium in the third year. bcMetals must also pay the major $1 million within one year of starting commercial production.

At the end of the day the company will wholly-own the project, subject to American Bullion Minerals’ 30% reversionary interest, which becomes effective after bcMetals has recovered 100% of its costs from production. American Bullion can acquire its pro-rata portion of the Teck interest by paying 30% of the total A $3.6 million drilling program is currently underway on the property. BcMetals is putting down 41 infill holes into at the East and Main Zone resources, which hosts a measured resource of 11.8 million tonnes grading 0.85% copper and 0.77 gram gold, using a 0.5% copper cutoff. The area has an indicated resource of 37.5 million tonnes grading 0.69% copper and 0.57 grams gold, plus an inferred resource of 28.2 million tonnes grading 0.61% copper and 0.5 gram gold.

The currently de-listed American Bullion, worked the property in the 1990’s using a total resource of 550 million tonnes grading 0.32% copper and 0.25 gram gold, based on 244 drill holes and a cutoff grade of 0.2% copper.Because of low metal prices, the company elected to look at mining the higher-grade core, which is estimated to contain 210 million tonnes of 0.46% copper and 0.38 gram gold. Daily throughput was projected at 30,000 tonnes over a 20-year mine life.

bcMetals, with 16.4 million shares outstanding, has a 52-week trading range of $0.06 to $1.50 and trades at $1.45.

At the Galore Creek deposit, the first four holes of a recently competed 3,000 metre drill program has returned the goods for newly minted SpectrumGold (SGX-T). The best values from the initial batch came in hole 437, which returned 164.4 metres grading 1.16% copper and 1.52 grams gold.

The first pass program is designed at confirming and identifying higher-grade zones that could be traced. In total four areas of the deposit were tested; the North Gold Lens, South Gold Lens, the Central Replacement Zone’, and the Southwest Breccia.

The company picked up the historic project earlier this year by inking a deal with mining giants Rio Tinto (RTP-N) and Anglo American (AAUK-Q).

The price tag for the project is US$20.3 million payable over eight years with US$300,000 due in the first three years.

Galore Creek is a classic alkalic intrusive-related gold-silver-copper deposit that has been worked since the early 1960s. A 1992 estimate by Kennecott Exploration, a subsidiary of Rio Tinto, pegged the measured and indicated resource at 243.2 million tonnes grading 0.45 gram gold and 6 grams silver per tonne, plus 0.75% copper. The inferred resource was estimated at 70.6 million tonnes grading 0.63 gram gold, 6 grams silver and 0.59% copper. A 1997 provincial government report gave the Central zone an indicated resource at 233.9 million tonnes grading 7 grams silver, 0.35 gram gold and 0.67% copper, based on a cutoff grade of 0.27% copper- equivalent. The Southwest zone has an indicated resource of 42.4 million tonnes grading 7 grams silver, 1.03 grams gold and 0.55% copper, whereas the North Junction zone has 7.7 million tonnes grading 1.5% copper in the indicated category, based on a 0.4% copper cutoff.

On the back of the deal, NovaGold Resources (NRI-T) bought 2.28 million shares, or 16.3% of SpectrumGold, from Quest Capital (QCCNF-OTC) for $1.7 million in cash.

SpectrumGold, now a 56%-owned subsidiary of NovaGold, began trading on the Toronto Stock Exchange on October 27. The junior, with 20.9 million shares outstanding, has a 52-week trading range of $2.14 to $4.25, and trades at around $3.60.