LATIN AMERICA SPECIAL — Panama boasts mining potential

Despite its massive copper potential, Panama’s first major mining operation may be gold.

The country’s Cerro Colorado project is a major porphyry copper deposit. It is in the western part of the country and close to the crest of the Cordilleran chain. Its potential was first determined the period 1970-1974 by Canadian Javelin (which was wound up in 1982).

Drill-indicated reserves are 1.4 billion tons grading 0.7% copper with minor values in molybdenum. The deposit carries a higher-grade, 85-million-ton core grading 1% copper. At present, RTZ (NYSE) holds 49% of the property and CODEMIN, an autonomous state agency, the other 51%. The Panamanian government is interested in selling its interest.

A number of gold properties are at various stages of investigation. The most advanced is the Santa Rosa owned 49% by Greenstone Resources (TSE) and 51% by Boliden. According to Greenstone, Boliden may be seeking a partner, or may sell its interest if the price is right.

Open-pit reserves are 7.2 million tons grading 0.05 oz. gold per ton. A 5,000-ton-per-day open-pit, heap leach operation is envisaged with a production capability of 60,000 oz. per year.

Project financing amounting to US$17 million is being sought. Overall geological reserves in the general area are estimated at 16 million tons grading 0.05 oz.

Elsewhere in the country, Adrian Resources (VSE) is earning a 32% interest in the Petaquilla property which hosts two copper deposits. Preliminary reserves are estimated at 875 million tons grading 0.6% copper. Minnova (TSE) owns 48% of the project, and a local Panamanian company the remaining 20%.