Kookaburra lands Ecuador property

Adding to a portfolio of copper-oxide properties, Kookaburra Gold (VSE) reached an agreement with AG Armeno Resources (VSE) to acquire up to a 65% interest in the Chaucha copper project in Ecuador.

Kookaburra can earn an initial 50% interest in the property by making cash payments to Armeno totalling $375,000 plus 200,000 shares as well as spending $3.5 million on exploration and development over a 4-year period. The company can earn an additional 15% interest by paying Armeno $2.5 million and spending a further $2.5 million on the property.

The property contains a large porphyry system measuring about five miles by five miles covering at least eight copper targets, only one of which has been tested.

Two United Nations-sponsored teams drilled a total of about 25,000 ft. in 70 holes on the Naranjos area in the late 1960s and early 1980s. The drilling outlined a large shallow and gently sloping supergene enrichment blanket measuring 4,000×1,800 ft. and varying in thickness from 100 ft. to 400 ft.

Reserves in the zone, which is overlain by an oxidized zone and underlain by an untested copper-sulphide system, are estimated at about 60 million tons grading 0.50% copper at a 0.20% copper cutoff grade. The preliminary reserve figure includes a potential starter pit measuring about 27 million tons grading 0.56% copper.

A further extension to the south of the reserve is estimated to contain about 14.5 million tons grading 0.34% copper.

Kookaburra stated that it is highly impressed with the business climate in Ecuador and believes the Chaucha project has an excellent chance of being developed into a heap leach solvent extraction and electrowinning operation. Rennie Blair, president of Kookaburra, said the option agreement with Armeno should be finalized by the end of October.

Blair said the company will then work on a prefeasibility study, including preliminary pit designs, capital cost estimates and metallurgical testing. Additional drilling will wait until road access to the property is completed. The government is in the process of constructing a major road into the area and it is expected to traverse the Chaucha property in 12-15 months’ time.