Explorator probes copper-gold mantos at El Espino (December 13, 2010)

VANCOUVER — Explorator Resources’ (EXO-V) 23,000-metre drill program at its joint-ventured El Espino project in Chile is showing that the historic mines scattered across the property may have only scratched the surface of its coppergold potential.

El Espino is in the Illapel district, 50 km northeast of the coastal town of Los Vilos. Numerous small-scale underground operations have tapped into the steeply dipping veins at El Espino, producing copper and gold from high-grade, oxidized mineralization. More recently, drilling by several operators has started to delineate mineralized mantos cut by those feeders. The lithologically controlled bodies often have a high-grade core, roughly 30 metres thick grading better than 1% copper, surrounded by a halo of lower-grade disseminated mineralization. Variable amounts of gold occur alongside the copper.

The mineralized zone at El Espino is almost triangular in shape, with the longest side stretching along 3 km and the widest portion reaching across 2 km. It is divided into several segments, the largest of which is the Rachel zone. Rachel sits directly in the middle of the triangle, bordered by Chon Chon to the north and Pichanilla to the southeast. Two other zones, known as La Viuda and Portuguesas-Pirata, lie to the southwest.

The latest set of results from El Espino included holes from every part of the project. In the Rachel zone, drill results are helping to define mineralization in the stacked mantos while also determining the edges of the zone. Hole 437, for example, was collared on the western edge of the Rachel zone, near a fault that both bounds the zone and likely acted as the mineralizing structure. The hole returned 35 metres grading 2.63% copper and 0.24 gram gold per tonne in oxide from surface, followed immediately by 60 metres of 0.86% copper and 0.33 gram gold in sulphides. Nearby, hole 438 cut 63.5 metres of sulphide mineralization grading 0.67% copper and 0.1 gram gold from 23 metres downhole.

Farther north in the Rachel zone, near the boundary with the Chon Chon zone, hole 443 returned 56 metres grading 0.71% copper and 0.26 gram gold. In the Chon Chon zone itself, hole 464 hit 10 metres averaging 1.16% copper and 0.73 gram gold in further proof that Chon Chon carries better gold grades than other zones at El Espino.

And in the southeast corner of Rachel, near the Pichanilla zone, hole 463 returned 34 metres of 1.58% copper and 0.2 gram gold from 132 metres depth, followed by 26 metres of 2.29% copper and 0.07 gram gold from 250 metres downhole. Moving into the Pichanilla zone, hole 454 cut 26 metres of oxide rock at 0.66% copper and 0.84 gram gold, from 68 metres depth, while hole 456 returned 12 metres of 0.57% copper and 0.03 gram gold in a hit that extended the zone to the south.

The copper and gold at El Espino are hosted in an iron-oxide coppergold (IOCG) system, which are fairly common in Chile’s coastal Cordillera. The area is home to several world-class IOGC deposits, such as the 400-million-tonne Candelaria deposit that averages 1.1% copper and 0.3 gram gold.

Several companies have probed El Espino since the early 1990s, including Anaconda Mining, Rayrock Resources and Teck Resources (TCK. B-T, TCK-N). Prior to Explorator’s arrival, the site had already seen almost 14,000 metres of drilling.

El Espina is a joint venture between private Chilean miner Pucobre (Sociedad Punta del Cobre), which is earning a 51% stake, and Explorator, which holds the rest.

The partners are spending US$10.3 million at the site this year, with US$3.7 million directed towards drilling and assaying and US$3.2 million aimed at various studies in support of a scoping study due out before year-end.

The companies became partners at El Espino last year, when Pucobre agreed to spend US$17 million on the project to earn its stake. The Chilean company spent US$10.5 million in 2009 and is spending the remaining US$6.5 million this year. As such, Explorator’s share of the 2010 budget is just US$1.8 million. As of the end of September, the company had $4.5 million in the bank.

Explorator’s share price lost a penny on news of its latest drill results to close at 59¢. The company has a 52-week trading range of 36¢-73¢ and 80 million shares outstanding.