Bell Copper chases payoff from Perseverance

Tim Marsh likes to say that it took 150 drill holes to hit the high-grade core of the massive Oyu Tolgoi copper-gold porphyry deposit that made the Mongolian discovery economic.

That’s one of the reasons why the junior exploration company he leads — Bell Copper (TSXV: BCU) — has named its copper-porphyry project Perseverance.

Since 2007, the mining executive, who has a PhD in geology from Stanford University, has been pursuing what he believes is the faulted-off top of a major porphyry copper system in northwestern Arizona’s Mohave County.

But his interest in the area — 31 km southeast of Kingman and 241 km northwest of Phoenix — originated more than 20 years ago, when he was working on AMT’s Copper Creek copper deposits in southern Arizona.

“I wanted to find the next big porphyry copper deposit in Arizona, so in the evenings I would comb the mineral occurrence data, and read old theses in the University of Arizona library,” he says. “There were a lot of good dissertations on copper projects, but I was looking very specifically for one situation — evidence of a decapitated porphyry.

“David Lowell found one of the good ones — the chopped-off portion of the Kalamazoo porphyry,” Marsh says of the world-renowned exploration geologist. Lowell found Kalamazoo in Arizona in 1965, and the orebody became a major mine for BHP. (Lowell is famous for discovering other huge copper porphyries, as well, including La Escondida in Chile.)

“I wanted to do the same thing,” Marsh says of Lowell’s success at Kalamazoo. “I wanted to find a compelling example, stake it myself, and make a mine out of it.”

His thinking was that Arizona — which has produced 10% of the world’s copper, and where faulting has taken big copper deposits and turned them into pieces — would be a good place to find one.

In the late 1990s, Marsh came across a 1974 master’s thesis by John Vuich in the University of Arizona’s library about the Wheeler Wash porphyry exposure containing molybdenum in the mountains of Kingman, Arizona. “I saw it as the bottom of a copper porphyry deposit,” Marsh says.

Marsh’s theory was that the Wheeler Wash exposure had been connected millions of years ago to the Kabba deposit, a molybdenum and vanadium deposit, 8 km away, and that the two pieces of the deposit had been sliced into two by a fault.

“The Wheeler Wash porphyry exposure was the same as the Kabba deposit about 15 million years ago,” Marsh explains, “but then they were cut into two separate pieces by a fault and the upper piece, containing the Kabba deposit, shifted eastward by about 8 km. The beast that I started looking for was the piece that formerly rested above the Wheeler Wash porphyry exposure — that is the Kabba deposit, and its geological neighbourhood. I believe the Wheeler Wash porphyry exposure is the bottom, or the undesirable part of a copper porphyry deposit, and the Kabba deposit is close to the top, or the desirable part of the deposit, and the two used to be one.”

In the meantime, however, Marsh had a family to support, so he continued to work as chief geologist at Rio Tinto’s (LON: RIO) Resolution project, 320 km away. Resolution is a porphyry copper deposit buried 1.6 km beneath surface.

Marsh didn’t find Resolution — but drilling the deposit helped him get a better understanding of what to look for when hunting his own.

“Resolution was one of the things that helped me see what the underbelly of a big porphyry deposit looked like,” he says.

Between 2000 and 2005, Marsh helped drill 18 holes at Resolution. Several of them went all the way through the orebody and down into the underside, he says.

“It became clear that the copper goes away once you get through that copper shell, but other features remain the same, sericite alteration remains there, it becomes very coarse-grained, moly stays, and there is a lot of quartz down there, and I just put that in the back of my brain.”

While intellectually compelling, he says, “I didn’t want to spend my career grid-drilling someone else’s discovery.”

So he returned to the area around the Kabba deposit written about in the dissertation by John Vuich, on the west side of the Big Sandy Valley, 170 km southeast of Las Vegas and 430 km northeast of Los Angeles, and staked claims 8 km away. Marsh’s Perseverance claims lay on a productive porphyry copper trend between Bagdad, Freeport-McMoRan’s (NYSE: FCX) open-pit copper and molybdenum mining complex, and Origin Mining’s Mineral Park mine.

“The basic concept that a porphyry deposit can be chopped off and there can be economically significant pieces of it is an old idea — I just wanted to repeat the exercise somewhere else, but be successful at it,” he says. “One of the things that this student at the University of Arizona did was to map the outer limits of pyrite mineralization in the exposed outcropping piece.”

It wasn’t until 2007 that Marsh found proof he was on the right track when he found features typical of porphyry copper deposits — such as quartz-molybdenite veinlets and pale green sericite alteration — in drill holes separated by 1.6 km in an east–west direction, and by at least 3 km in a north–south direction in the upper block of the fault.

Marsh drilled nine sites encompassing 24 sq. km, the last of which, drill hole K10, intersected more than 500 metres of variably sericitized, pyritic diatreme breccia and dacite porphyry dikes that he thought were Laramide age. The drilling beneath gravel cover revealed strongly altered and weakly copper mineralized diatreme breccia and dacite prophyry beginning at a base of cover from 394 metres to 540 metres below surface, and extending to at least 1,346 metres below surface. Propylitic alteration in the deeper sections of drill hole K10 suggested to Marsh that the hole lay on the western edge of the west-tilted porphyry system.

“I was looking for a fault that dipped at 60 degrees, but hole one didn’t even hit the hanging wall,” he recalls. “I realized I needed to move at least twice as far if I was going to find it. This thing had slipped much more horizontally than vertically. I moved another mile out and drilled a hole, and found the hanging wall block with that hole, but the rocks were unaltered. They had never seen hydrothermal fluid. And that told me it had moved beyond that location. I moved another mile east of there and found porphyry dikes, sericitic alteration — the kinds of things you find around copper porphyry deposits.”

Then the 2008–2009 financial crisis hit, and money dried up.

“It got harder and harder to get financing, because the banks knew they had some rotten loans in their portfolios — just at the time our fourth hole was starting to bear out the story that the porphyry had been cut into two pieces, and the top was at least 5 miles displaced from the roots.”

Marsh spent the next few years focused on Bell Copper’s La Balsa project in Michoacan, western Mexico, until drug cartel activity eventually forced the company to sell it. “There was no way we could comply with financial reporting and run an honest business,” he recalls. “The cartels demanded payments. They made the force of their threats clear with [dead] bodies they dumped on our property. It was a really scary business, and I was the guy on the ground most of the time. I got to the point that I couldn’t do business down there — I couldn’t take people down there and put their lives at risk trying to finish a feasibility study and build a mine, knowing the cartel was our invisible partner, and there was no way we could file financial reports disclosing what the costs really were. We would be paying to stay alive, literally, and would have to be paying money to the cartel to do business.”

When Marsh took over as president and CEO of Bell Copper in 2013, he convinced the board to sell the project, and eventually offloaded it to a Chinese company. He then used the funds from the sale — and the disposal of a second property in Arizona — to pay back bank debt and resume exploration at Perseverance.

Drill hole K11, completed in mid-2015, about 800 metres east of his last drill hole, K10, cut nearly 900 metres of visible copper and molybdenum mineralization hosted entirely by strongly altered and veined Laramide porphyry, which Marsh interpreted as the pyritic shell surrounding a copper-rich central zone.

“It’s the most spectacularly veined and altered patch of ground I’ve ever been on,” Marsh says of Perseverance. “I know what these things look like — it’s the bottom of a giant copper porphyry deposit.”

Marsh showed the project to Kennecott Exploration — a subsidiary of Rio Tinto — which was interested enough to sign an option deal in March 2016 to acquire up to a 70% stake, and it invested $3 million over the next two years conducting surveys and drilling seven holes to a depth of 400 metres below surface.

The seven holes targeted multiple induced-polarization (IP) electrical geophysical anomalies distributed across a 3 by 4 km area that had been identified in their geophysics program. “The geophysics lit up like a light bulb, showing a lot of pyrite in the area we were looking at,” Marsh says. “They saw very clearly there was a very large area of chargeability out there, and the implications of that were that there was a lot of pyrite in the subsurface under the gravel … once they got into the pyrite and they didn’t see any copper, which was in most of those holes, they stopped. I struggled to get them to drill deeper.”

Many of the holes Kennecott drilled intercepted oxidized and leached capping in Laramide-age porphyritic intrusive rocks, with several showing low concentrations of the copper-bearing minerals chalcocite and chalcopyrite.

Their work demonstrated an open-ended, 1.5 km wide ovoid porphyry copper target extending more than 2 km long that displayed anomalous levels of arsenic, copper, gold, lead, molybdenum, rhenium, silver, sulphur, tellurium and zinc, consistent with their proximity to Marsh’s envisioned porphyry copper target. The IP anomalies appeared to form a thick halo surrounding the ovoid target, Marsh says.

The extent of porphyry intrusions — breccias, alteration and mineralization that Kennecott intercepted  — showed that Bell Copper was “chasing a large porphyry system, though we still seemed to be on the flank, rather than the middle, of a large upflow zone that we expect to find,” Marsh says.

“The very last hole Rio drilled we saw some copper silicate, but we saw a lot of zinc, and that says you’re not in the middle of it yet, you’ve got to keep going,” he says. “Drill holes nearest the edge of the geophysical anomaly were showing elevated zinc — not what you’d find in the centre of a copper porphyry, but what you’d find on the fringe.”

Rio Tinto walked away.

Marsh likes to compare expansive copper porphyry systems to California’s giant Redwoods — which can soar over 100 metres tall, span 7 metres across, and reach thousands of years old.

“The drill results I was getting weren’t a Redwood — they might have been the leaves or twigs, maybe a little Redwood bark, but the heart of the tree wasn’t in any of those holes. When we looked at the metal ratios of lead, zinc and gold, the mineralization that happens on the outer areas of a porphyry, they were quite high — the indication being that we hadn’t arrived at the centre, we were still finding the margins.”

In June 2018, Marsh returned to drill the ovoid copper porphyry target to the north and east of Rio Tinto’s last hole. “I drained the treasury, my last attempt to make a discovery before I tried to find another partner, and found a little gold, and a lot of fluorite mineralization,” Marsh says.

He showed his results to Cordoba Minerals (TSXV: CDB; US-OTC: CDBMF) — a junior with ties to Robert Friedland. Cordoba Minerals is 67%-owned by High Power Exploration Inc. (HPX), Friedland’s privately owned company.

In August 2018, Cordoba signed an option agreement to earn an 80% stake in Perseverance by spending up to $17.3 million on the project over seven and a half years.

“They saw it and fell in love with it,” Marsh says.

“Robert bought into it very quickly,” Marsh continues. “He got in his jet one day and flew out to Kingman. I thought I wouldgive him the whole story, but he had a young lawyer with him, and I couldn’t get a word in edgewise. Robert began lecturing this young lawyer about copper porphyries and gave him real high-level geological explanations. He deserves an honorary degree in economic geology — he knew exactly what he was talking about.”

Cordoba now owns 25% of the project, after spending $1 million on drill hole K20.

“I picked K20, and they paid for it,” Marsh says.

“Robert would call me in the middle of the night from Singapore and want to know how the drill hole was going,” Marsh says of K20. “He was an integral participant in the drilling of that hole.”

Results from K20 were released in May. The hole, drilled to a vertical depth of 1,319 metres, returned anomalous copper values averaging 415 parts per million (ppm) copper over 595 metres, using a 200 ppm cut-off grade, beginning at a depth of 683 metres. Marsh says the long intercept of anomalous copper indicates that the hole intersected the peripheral part of a porphyry copper system.

Bell Copper and Cordoba’s geologists now say that the centre of the system is northeast of drill hole K20, which is verified by downhole acoustic televiewer measurements of fractures and vein sets, Marsh says. The next step is to do a magnetotelluric (MT) survey to close off the existing deep conductive anomaly before further drilling.

“It’s quite possible we’ll be doing geophysics to find the next holes,” Marsh says. “I’ll have a say where they go, but Charlie Forster, Robert’s geologist on the job, and one of the team that discovered Oyu Tolgoi, is vice-president of exploration at Cordoba, and he has the final say.”

Forster notes that Rio Tinto’s IP survey did not close off their large chargeability high, leaving it very much open to the northeast, and drill hole K20 was not within their survey, but about half a mile (0.8 km) northeast of it. He notes that Quantec did Rio’s IP survey, and also collected MT data using the IP system at night, and the MT data showed a large, deep, low-resistivity anomaly also trending and open to the northeast at a depth greater than a kilometre. But MT results from the IP system were depth limited, so it’s difficult to say how deep the source might be.

“Nothing we saw in K20 would explain the low-resistivity feature,” Forster writes in an email. “In my opinion, the MT feature could be caused by either intense advanced argillic alteration [clay], or strong stockwork sulphide veining. At Resolution, the high-grade deposit is capped by advanced argillic alteration and pyrite concentrations up to and greater than 10%. And Resolution has a low-resistivity, MT anomaly associated with it.”

The program at Perseverance, he says, will include bringing in Quantec’s dedicated Sparton MT system — which has depth capabilities down to 3 km — and extend the coverage to the northeast, and close it off. Depending on the MT results, HPX may employ its proprietary Typhoon IP system to map the depth and lateral extents of the porphyry system to target drilling on the project.

“I agree with Tim that we are more likely still off to the side of a porphyry centre than over the top of one,” Forster says. “Having walked over the root zone and observed the intense quartz stockwork, it is hard not to believe that the mineralization above it and now decapitated, and somewhere out under the cover fill, is going to be equally intense.”

The way Marsh sees it, it’s just a matter of time before the economic orebody is found, and Bell Copper has the best partner to do it.

“I don’t think anybody at Cordoba thinks we’re going to find Kamoa- or Kipushi-like grades,” Marsh says of the giant copper deposits Friedland’s team at Ivanhoe Mines have found in the Democratic Republic of the Congo. “But I think Charlie is very much excited by the scale of what we’re finding, and sees potential for finding a world-class porphyry copper deposit here.

“It’s big, intensely altered and veined, and the top of it must exist, and we’re getting close,” Marsh says. “We’re drilling Redwood bark and branches and leaves — it’s the big chunk of wood we’re still looking for.”