Vancouver — Drilling by
Hole 11 returned a total thickness of 171 metres (over three zones) of zinc oxides grading 4.64% zinc and 0.45% copper in garnet skarn. A further 24 metres of sulphide mineralization below the oxides average 3.4% zinc and 0.25% copper.
The core hole was positioned near previous reverse-circulation hole 18, which returned 165 metres of 4.25% zinc and 0.35% copper before ending in mineralization at 223 metres (owing to lack of air pressure, which was needed to lift the cuttings).
Hole 3, collared on the eastern end of the Cerro la Verde zone, intersected 96 metres (from 67 metres depth) grading 3.4% zinc and 0.3% copper.
The latest results, coupled with previous ones, indicate a significant zone of oxide zinc at Cerro la Verde. A resource calculation is anticipated by mid-2005.
A 2002 prefeasibility study recommended an open-pit, solvent extraction-electrowinning copper-zinc operation with a lifespan of 11 years. The study used a preliminary minable reserve of 58 million tonnes grading 0.57% zinc and 0.35% copper. Annual production was projected at 40 million lbs. cathode copper and 60 million lbs. zinc; cash costs were estimated at US53 and US34 per lb., respectively; and capital costs were estimated at $136.5 million.
In mid-2000, Constellation entered into a 7-year option to buy the Terrazas project from a Mexican individual. The company makes annual payments of $125,000 and is committed to spending $2 million on exploration. The option of buying a 100% interest can be exercised, for $3 million, prior to production. The vendor retains a 1.5-2% net sales revenue royalty indexed to copper prices.
Constellation recently traded at $1.04. With 74.9 million shares outstanding, the issue has a market capitalization of $78 million.
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