Coro makes slow-but-steady progress in Argentina (April 12, 2010)

VANCOUVER — With two early-stage properties in Chile and a proposed mine in Argentina that is almost through a rigorous environmental permitting process, things are looking up for Coro Mining (COP-T).

Coro’s main focus is the San Jorge copper-gold project in Argentina’s Mendoza province. The mid-sized porphyry deposit at San Jorge has been ready for development for some time now. But environmental permitting of mining in Mendoza is a delicate process — the province is very protective of its waters and soils because of its extensive cattle ranching and vineyard industries and the end result is a slow process for mining permits.

In addition, in mid-2007 the province passed legislation banning the use of “toxic chemicals” in mining, including sulphuric acid. As such, Coro’s plan to process the oxidized cap of the San Jorge deposit via heap leaching is not possible.

Undeterred, Coro challenged the legality of the toxic chemicals ban and then, knowing how long legal challenges often last, began developing a sulphide-only mine. The chemicals used to recover copper and gold from sulphide ore are allowed in Mendoza. A preliminary economic assessment of the sulphide- only operation predicted production of 39,500 tonnes of copper and 39,000 oz. gold each year for 16 years.

Coro expects the sulphide mine to cost US$277 million to build. Based on a copper price of US$2 per lb. and a gold price of US$600 per oz., the mine carries an aftertax net present value of US$220 million.

But Coro will only be able to realize those predictions if awarded a permit. The company took a significant step in that direction in late February, when the Provincial Environmental Authority approved the sectoral-review stage of the San Jorge approval process. The sectoral review was coordinated and supervised by the Secretary of the Environment and included endorsement opinions from at least 10 provincial bodies.

Now Coro is awaiting its formal public hearing, which is the final step in the extensive public consultation process. If all goes well at the hearing, Coro expects the San Jorge environmental impact declaration to move to the House of Deputies and Senate for ratification.

While it worked through the public consultation process for San Jorge, Coro also advanced its two early-stage exploration properties in Chile. And recent results from Cerro Chacay are reviving attention in a forgotten project.

Cerro Chacay is 12 km southeast of Teck Resources (TCK. B-T, TCK-N)Relincho copper project and 50 km east of the city of Vallenar. Several companies drill tested the copper porphyry prospect in the past but, while drill log information is available, the historic assay data has been lost. Generally, the prospect comprises a zoned porphyry alteration suite surrounding a phyllically-altered core that stretches along 3,500 metres of strike. The most intense alteration covers an area 1,000 metres long and wide, centred on Chacay hill. The hill, which rises 300 metres above the surrounding lands, hosts a leached cap 50 to 200 metres thick. Underneath the cap sits a chalcocite enrichment blanket that is 20 to 100 metres thick.

Most of the results from a 5-hole reverse circulation drill program are now available. Hole 9 cut 88 metres grading 0.47% copper starting 236 metres downhole, in the enrichment blanket. Then hole 13 returned a more promising result: 122 metres grading 0.77% copper, starting 112 metres downhole and starting with 58 metres of 0.99% copper.

Assay results are only available for the first part of hole 14, which returned 14 metres grading 0.53% copper from 68 to 82 metres depth. The lab is still assaying the core from 82 metres downhole. Similarly, hole 15 hit 40 metres of 0.65% copper between 120 and 160 metres depth; the rest of the core is still at the lab. And no results are yet available for hole 16.

Coro has determined that there are two porphyritic rock types present at Cerro Chacay: an early dioritic feldspar intrusive with potassic alteration and a later quartz feldspar porphyry with moderate to strong quartz-sericite-pyrite alteration. The importance of this realization is that the chalcocite blanket is best developed as a layer of enriched copper sulphides when hosted within the feldspar porphyry. In the quartz-feldspar porphyry, chalcocite only occurs as coatings on pyrite.

Armed with this knowledge, Coro plans to return to Cerro Chacay with a diamond drill and target areas where the enrichment blanket should correspond with feldspar porphyry. The next drill program will also test deeper portions of the deposit.

And in late 2009 Coro released the final results of a 6-hole reverse circulation drill program at its wholly-owned Llancahue property, which is 38 km southwest of the city of Talca in central Chile. The short program was designed to follow up on a highly encouraging result from its earlier program, when hole 7 returned 100 metres grading 1.375% copper, 0.015% molybdenum, and 3.8 grams silver.

In its follow-up effort, Coro did not manage to replicate the length of the intercept in hole 7 but did pull some good grades from the ground. Hole 1 cut 12 metres grading 1.56% copper, 0.024% moly and 5.9 grams silver starting at 124 metres depth, then hit 10 metres of 1.03% copper, 0.079% moly, and 3.8 grams silver from 222 metres depth. And hole 4 returned 32 metres grading 0.29% copper, 0.018% moly, and 1.1 grams silver from 36 metres depth, followed immediately by 36 metres of 2.43% copper, 0.102% moly and 5.8 grams silver.

Hole 2 was abandoned before hitting target depth. And two other holes — hole 3 and 5 — have not yet been assayed. Hole 3 offset hole 1 to the north while hole 5 was collared south of hole 4. The final hole of the program, hole 6, was drilled as a wildcat hole to the west of the zone; it intersected propylitically-altered wallrock.

Coro believes mineralization at Llancahue is hosted by a hydrothermal breccia developed around a subvertical finger of strongly potassically- altered diorite and comprises disseminated and veinlet chalcopyrite, bornite and molybdenite. Drilling to date suggests the mineralized intrusive and breccia body are of limited extent but the intensity of the alteration and the presence of high-grade copper-molybdenum mineralization suggest a larger body of mineralization may exist under cover to the west. Coro will follow up on this theory in the next drill program.

Coro’s share price spent March between 47¢ and 56¢. The company has a 52-week trading range of 11.5¢- 73¢ and 91 million shares outstanding.