LATIN AMERICAN SPECIAL — Barrick drills active — Peru’s

Prospects for the Yanacocha district of northern Peru are looking up on news that American Barrick Resources (TSE) is meeting with drilling success at its Corona project.

The property features a large porphyry copper-gold deposit and although results have not been released from the current program, grades from previous work ranged from 0.04 to 0.05 oz. per ton for gold and 0.75% for copper. Barrick has eight drills working on the property and can earn a 75% interest by carrying out delineation drilling over a 6-month period, followed by payment of US$20 million. The payment is an advance on the final purchase price, set at US$30 per oz. as based on the minable ounces outlined in a feasibility study.

The district is primarily known for the Yanacocha deposits about 14 miles to the south.

Last year, the Yanacocha joint venture (38% owned by New York-listed Newmont) started mining three of nine known gold deposits estimated to contain proven and probable reserves of 85 million tons grading 0.045 oz. The total resource is estimated at 8 million oz. and Newmont is already planning to boost production to 350,000-400,000 oz. per year from the current 250,000 oz. Meanwhile, Newmont has formed a second joint venture with its partners at Yanacocha, to cover 480 square miles of staked ground. Newmont’s stake is 60% and its partners include Buena Ventura Mining and the French firm BRGM. Buena Ventura, one of Peru’s largest mining companies, also owns La Zanja, a gold project 20 miles northwest of Yanacocha. It is in the early stages of development.

And east of La Zanja, Asarco-controlled Southern Peru Copper is ready to drill gold targets at its 40%-owned Tanta Huatay project. Buena Ventura holds a 35% interest in Tanta while a private Peruvian company holds the balance. Another property in the area, known as Hualgayoc District, is notable for its venerable history. Small-scale mining of polymetallics at this project dates back to Inca times, though currently it is dormant.

Crown Resources (TSE), through 86%-owned subsidiary Solitario Resources, is in the enviable position of holding much of the ground between Yanacocha and Corona. It picked up a 150,000-acre exploration and mining concession last year, along with nine other properties to the northwest and southeast along the belt.

Louis Lepry, vice-president of corporate development, said only very preliminary work has been done on Crown’s concessions. The company will spend at least US$500,000 on its ground in Peru this year, most of which will consist of preliminary exploration. These are still “very early days” for the exploration of Yanacocha, Lepry said, noting that most discoveries in the district have outcropped (which is also true of Peruvian deposits in general). Ten miles southeast of Newmont’s Yanacocha deposits, state-owned Minero Peru is preparing to sell the Michiquillay property, which is estimated to contain 500 million tons grading 0.75% copper.

Minero Peru recently sold La Granja, a copper project 30 miles northwest of Yanacocha. Cambior (TSE) must spend US$25 million on exploration and development to acquire it, with Minero retaining a 5% net smelter return. Drill-indicated reserves are estimated at 193 million tons, including 93 million tons of leachable material grading 0.95% and 100 million tons of sulphide material averaging 0.73% copper.

Altai Resources (TSE) is negotiating with a Canadian mining group to put the placer portion of its Chimu gold project into production by late 1994. The placer section lies adjacent to the Rio de Oro project along the banks of the Tablachaca River.