EXPLORATION ’93 — Arequipa eyes Peruvian copper

As Ed Horne said three-quarters of a century ago, “all the good geology does not stop at the Ontario boundary.” Bearing in mind the injunction, Arequipa (VSE) is horning its way into Peru along the extension of Chile’s prolific mineral belt.

Horne canoed his way into Quebec, and into history, discovering the orebody that established Noranda as one of the world’s mining giants. Whether Arequipa can emulate Horne’s performance remains to be seen. But if present indications are anything to go by, it may do so before long. The company recently signed an agreement enabling it to explore a swath of territory in the Southern Peru copper belt, under the guidance of one of the world’s foremost porphyry-copper authorities.

That authority is David Lowell, who has spent about 20 years exploring for minerals in southern Peru and Chile. During this period, he participated in more than a dozen major feasibility studies and managed five exploration programs. The latter resulted in the discovery of several commercial orebodies, the most notable being La Escondida in Chile, the second-largest copper deposit in the country. (Chuquicamata is the top-ranker in the world.) The southern Peru copper belt is 225 by 25 km. It hosts four porphyry copper deposits and about 25 alteration zones of the type often associated with such mineralization.

The Peruvian company Acuarios Minera y Explorada (Acuarios), controlled by Lowell, has acquired 44,000 hectares of property covering 18 of these alteration zones.

Arequipa (known as Thumper Resources until June, 1993), headed by President Henry Ewanchuk, stepped into the picture via an option which gives it the right to earn a half interest in Acuarios’ property portfolio. An initial 20% interest was secured Sept. 14, 1993, by a $1.3-million payment. The balance is to be acquired later this year through an additional $2.7-million payment. Despite being recognized as one of the world’s most abundantly mineralized regions, Peru has been a pariah as far as offshore mining exploration is concerned.

“The country hasn’t given the impression of stability for a long time,” Ewanchuk told The Northern Miner. “There have been the depredations of the Shining Path (Maoist guerrilla group), the narrow nationalistic policies of previous administrations, high inflation, labor problems, et cetera. But the coming to power of (President Alberto) Fujimori in the early 1990s promised change. There’s a new mood in the country; it’s coming back into the mainstream.”

According to Lowell, the geology of southern Peru possesses excellent potential for bulk-minable, disseminated gold deposits and oxide copper deposits, as well as more porphyry coppers. The greater part of the country’s copper production, in fact, comes from two porphyry copper mines in the vicinity of Acuarios’ holdings: the Toquepala and Cuajone open pits operated by Southern Peru Copper, a company in which Asarco (NYSE) has a 52% interest. “We are starting off in the exploration business,” said Ewanchuk. “But if all the pieces come together, we’d want to joint-venture and take a property into production. We are particularly interested in oxide-copper deposits that are amenable to open-pit mining and solvent extraction-electrowinning.” Five of Acuarios’ properties are in the advanced stage:

* Los Pinos — This property, recently optioned to Asarco, hosts a disseminated copper deposit. Heap-leachable oxide copper is the target, with drilling now in progress.

* San Jose — The disseminated sulphides of this deposit grade 0.25%-0.35% copper. On top of the primary sulphides lies a blanket of

oxide-copper mineralization outcropping over a 600×1,200-metre area. Drilling is planned and bulk samples are being tested to determine leaching characteristics.

Acuarios paid US$30,000 to option San Jose and is required to pay US$575,000 over the next three years. It may exercise its option at any time and buy the property for US$2 million.

* Santa Catalina — Mapping and geochemical sampling are in progress at this project. Drilling will begin as soon as the most promising targets have been defined.

* Ventana-Sausine — This prospect is 20 km from Southern Peru Copper’s Toquepala mine and is close to the structure that controls several of the area’s porphyry copper systems. Drilling is planned early next year to secure samples from the concealed bedrock.

* The fifth advanced project consists of two copper-molybdenum-silver soil anomalies, each exceeding one square kilometre, on the Livi prospect. Detailed sampling is planned here.

An update on these programs will be provided in mid-December, Ewanchuk said. — The writer is a Victoria, B.C., freelance mining journalist.