Falconbridge (FAL.LV-T, FAL-N) has begun sinking an exploration decline into the La Fortuna copper-gold deposit on the El Morro project, 80 km east of Vallenar in north-central Chile.
The decline comprises an 800-metre drive across the zone of secondary copper enrichment, followed by a 350-metre drive into the underlying primary sulphide zone. It is designed to confirm the deposit’s grade, provide additional material for metallurgical test work, and allow detailed geotechnical studies. The work is scheduled to take 10 months.
Meanwhile, Falco continues engineering, metallurgical, environmental and socio-economic studies, which will also be used in the US$40-million prefeasibility study due by yearend.
La Fortuna is home to indicated resources totalling 209 million tonnes grading 0.67% copper and 0.59 gram gold per tonne. Another 538 million tonnes of inferred material runs 0.46% copper and 0.39 gram gold. The estimates are based on a cutoff grade of 0.4% copper equivalent, and metal prices of US$1 per lb. of copper and US$400 per oz. of gold.
The resource is contained in a 700-metre-by-900-metre area centred on the La Fortuna porphyry stock. It remains open at depth where copper-equiv. grades of 1% could extend the mine life.
In early March, the partners reported the first nine holes from an ongoing 70-hole, 26,500-metres drill program. The holes were designed to infill around the margins of the existing resource.
Highlights from the secondary enrichment zone include 100 metres running 0.67% copper and 0.35 gram gold in hole 71, 57 metres averaging 0.92% copper and 0.33 gram gold in hole 72, and 50 meters of 1.91% copper and 0.63 gram gold in hole 77.
Selected intervals from the primary sulphide mineralization include 632 metres grading 0.57% copper and 0.52 gram gold in hole no. 73, and 362 metres of 0.68% copper and 1.11 grams gold in hole no. 74. Hole 77 also yielded a 150-metre interval of leached cap rock containing 0.04% copper and 0.80 gold.
The drilling is in anticipation of an updated resource estimate that will form the basis of a definitive feasibility study due by mid-September 2007. Falconbridge is solely funding that study as part of its requirements to maintain a 70% stake in El Morro. The major earned its interest in El Morro by paying US$10 million to Metallica Resources (MR-T, MRB-X) last August. The earn-in agreement also allows Metallica to have Falco cover 70% of its share of any future mine development costs.
The property is also home to the El Morro deposit, about 5 km to the northwest. Inferred resources there are pegged at 79 million tonnes grading 0.44% copper and 0.16 gram gold per tonne.
The El Morro deposit differs from the La Fortuna deposit in that volcaniclastic and sedimentary rocks host the copper-gold mineralization, whereas La Fortuna occurs within intrusive rocks. The partners have not yet identified a porphyry intrusive core for the El Morro deposit. The deposit remains open to the west, northwest and northeast.
Scoping studies of the El Morro project forecast annual production of 160,000 tonnes of copper and 360,000 oz. of gold for around 16 years.
At the end of 2005, Falconbridge owned 8.21 million shares, or around 9.9%, of Metallica’s outstanding common shares. The share trade in a
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