Corriente intensifies search in Ecuador

Vancouver — Over the past year, Corriente Resources (CTQ-T) and its partner, American geologist David Lowell, have completed 15,000 metres drilling on four properties in the Corriente copper belt in Ecuador, and the junior is showing no signs of letting up in its pursuit of new targets in the region.

Plans for 2001 include continued development drilling at the Mirador and Warintza prospects, metallurgical sampling at the Warintza, Mirador and Panantza properties and completion of a scoping study at Panantza.

Stream sampling has identified 10 main targets, five of which have been subjected to intensive drilling:

– Panantza and San Carlos, in the north;

– Warintza, 10 km to the east; and

– Mirador and Chancho which are 50 km south of Panantza.

So far, the best drill results have come from Panantza and San Carlos. Drilling at the the latter was carried out by Billiton in 1997 and 1998. The London-based major calculated a resource of 400 million tonnes grading 0.7% copper. The key for Corriente is to find enough higher-grade ore to allow for a quick return on the initial investment required to kick-start a mining operation.

Situated in southeast, near the border with Peru, the Corriente region hosts porphyry copper bodies, most of which were discovered by Billiton in the mid-1990s. Corriente Resources signed two separate, but similar, agreements with Billiton, in October 1999 and April 2000. Under each, Corriente must complete a feasibility study on any one of several projects in order to earn a 70% interest in the joint venture. The deals also require Corriente to issue Billiton up to 2.35 million units (though the final number of units depends on which prospects are included). Each unit consists of a share and a share purchase warrant. Upon completion of the feasibility study, Billiton has three options: maintain its 30% interest; retain a 70% back-in right by providing production financing; or dilute to a 15% net profit interest.

Lowell, who is associated with the Pierina and Escondida discoveries, in Peru and Chile, respectively, currently holds 10% of Corriente’s interest through his Chilean-based company Lowell Mineral Exploration. He is managing the exploration program for Corriente.

The Ecuadoran government is keen on getting a mine developed, and, toward that end, recently improved its mining laws. The key elements that affect foreign companies are as follows:

– the elimination of mandatory mineral production royalties;

– the elimination of the exploration and exploitation title, now a single, 30-year concession title that includes reasonable maintenance fees, and an escalation clause that retains the incentive to explore ground or drop it;

– environmental permitting of exploration activities, performed through the Ministry of Mines;

– mineral concessions can now be grouped and divided into a more flexible system of mineral titles than previously allowed.

Recently, Corriente Resources outlined a high-grade copper drill target at its San Luis prospect, in the northern end of the copper belt. The property hosts a well-developed porphyry copper alteration suite that has a core of strong sericite-rich alteration measuring 2,000 by 500 metres. Semi-continuous chip sampling in bedrock along a creek that cuts the sericite alteration returned copper values of 0.91% copper over 274 metres. More geological work is required in order to determine the geometry of the high-grade zone as outlined by the chip sample. Drilling will follow.

At the southern end of the Corriente belt, a 7,500-metre drill program is under way at the Mirador project. The initial holes targeted the southern and eastern extensions of the known mineralization. Once completed, the drill will be moved to the core of the system to test the continuity and depth of high-grade mineralization. The junior will try to drill-test depths of up to 450 metres.

Following completion of work at Mirador, Corriente intends to move the drill rig to the Warintza prospect, where work will focus on the high-grade secondary copper blanket that was discovered in a program of scout drilling last spring. Previously released results from the scout drilling include hole 1, which cut 82 metres grading 1.37% copper, and hole 7, which intersected 95 metres of 1.2% copper. The company also plans to drill-test outlying copper-molybdenum anomalies.

The scoping study at Panantza envisages a 50,000-tonne-per-day open-pit mine that feeds ore to a nearby mill. The mill would employ standard flotation to separate the copper sulphide mineralization into a concentrate, which, in turn, would be pumped through a small-diameter pipeline 200 km to the coast. A processing plant at the coast will de-water the concentrate, which would then be loaded onto ships for shipment to a smelter. The processing plant would be built near Machala, on the country’s west coast. The city is a large industrial port with a population of about 250,000.

Corriente Resources also has a 100% interest in the Taca-Taca project, in northwestern Argentina. The deposit, which is near the main highway and rail line leading to Antofogasta, Chile, hosts a copper, gold and molybdenum porphyry system that exceeds 3 km diameter. A barren leached cap covers the mineralization.

The last resource estimate calculated by former joint-venture partner BHP Minerals, a unit of Australian-based BHP (BHP-N), weighs in at 440 million tonnes of 0.58% copper, 0.2 gram gold and 0.02% molybdenum. This value is based on the 33 holes drilled by the Corriente-BHP joint venture.

An additional target was identified based on the discrepancy between the calculated volume of leached rock and the known resource. The shortfall ranges between 4 and 8 billion lbs. copper. Corriente will continue to explore for this missing copper in the outlying regions of the property using mapping, trenching, drilling and geophysics.

A near-surface copper discovery was made at Taca-Taca in mid 1998 and was highlighted by a 54-metre drill hole that averaged 1.37% copper and 0.58 gram gold.

Rio Tinto (RTP-N) completed two drill campaigns on the project in 1999, putting down seven holes on an oxide copper target in the Cerro Cobre area and two holes in the salar exotic copper target. Rio Tinto decided to withdraw from the project at the end of 1999.