LATIN AMERICA SPECIAL — Argentine copper potential draws

Just over a year ago, International Musto Explorations (VSE) signed an agreement to acquire the Bajo de la Alumbrera copper-gold deposit in the province of Catamarca, northwestern Argentina.

The junior was the first foreign company to begin a major mine development program in the country since the current democratic government was elected in 1989. Following in the footsteps of neighboring Chile, Argentina’s current administration has initiated a number of economic policies based on free markets and private initiative.

Carlos Memem, president of Argentina, visited Switzerland in late January where he met officials of International Musto and was briefed on the progress of the project. He also pledged support from his administration in order to allow production to begin as soon as possible.

Bajo de la Alumbrera is at the feasibility stage, and the company expects to release an updated reserve in April. The updated figures will include the new 7,200 metres of core drilling now in progress which is expected to increase the minable reserves to about 500 million tonnes.

The porphyry deposit is currently reported to host proven and probable minable reserves of 390 million tonnes averaging 0.49% copper and 0.63 grams gold per tonne, with a stripping ratio of 0.8-to-1 for the life of the mine. This will allow for a mine life of about 25 years.

The current reserve includes an estimated 87 million tonnes at 0.63% copper and 0.91 grams gold at a 0.3% copper cutoff. This “starter pit” reserve will provide four years of production at a mining rate of 60,000 tonnes per day and will permit an early payback of capital.

The list of companies with projects in Argentina is small, although a number of juniors are currently investigating opportunities in the country. One such junior, Arauco Resources (VSE), is actively looking from its office in neighboring Chile.

Pacific Rim Mining (VSE) recently acquired a polymetallic massive sulphide prospect in the country through a bidding process. The property, La Colorada, was worked previously by the Argentine government, which outlined a near-surface, flat-lying pyrrhotite layer measuring 900 metres long, 200 metres wide and about 20 metres in thickness.

A small reserve has been outlined; however, more definition drilling will be required to establish the grade and reserves. The property is considered to have potential for the discovery of other massive sulphide bodies; it is speculated that the deposit possibly has time equivalent with the uppermost of three mineralized horizons at the Aquilar mining district, some 80 km to the northeast.