Having completed a first phase of exploration at the Tambo Grande polymetallic project in northern Peru,
The company has entered into an agreement with a syndicate of underwriters for 5.5 million shares at $5 each, for a gross proceeds of $27.5 million. The underwriters include National Bank Financial, CIBC World Markets, Nesbitt Burns, Sprott Securities, Salman Partners and Goepel McDermid.
The new program will expand the TG-1 gold zone and explore 15 untested gravity anomalies. In addition, a preliminary feasibility study will be performed on the TG-1 and TG-3 zones.
The preliminary mining plan envisages development of the gold-mineralized portion of TG-1 first, for early cash flow and quick payback of debt, followed by development of the TG-1 and TG-3 copper-zinc deposits.
In the first phase, Manhattan drilled 102 holes, or 28,000 metres, and, in the process, expanded the sulphide resource in the TG-1 zone. The company confirms that gold is present in the sulphide body, as well as in the oxide cap.
The program also saw the testing of two gravity anomalies: TG-6 and TG-7. Four holes totalling 2,000 metres were drilled into TG-6. They encountered altered basaltic flows, which contained disseminated pyrite and chalcopyrite, as well as breccias and sediments. The company says this sequence of rocks is similar to the hangingwall sequence observed at TG-3, and further work is warranted.
Two holes totalling 1,044 metres were drilled into the TG-7 target, where they intersected altered basalt flows and pyroclastic rocks, as well as disseminated chalcopyrite. Manhattan believes the volcanic sequence resembles the overlying and flanking rocks at the TG-3 target. Further work is warranted here as well.
The TG-1 oxide cap deposit hosts 1.2 million oz. gold and significant silver (T.N.M., Sept. 13-19/99). The deposit is hosted in a barite sandstone unit formed in a late-stage exhalative event that capped the underlying sulphide mineralization. The weighted average of the drill intervals has been calculated at 4.75 grams gold and 74 grams silver per tonne (uncut) over an average width of 14 metres. The oxide cap remains open toward the north.
To date, preliminary metallurgical tests show gold recoveries of 90% and silver recoveries of 70%. The TG-1 deposit is overlain by 14 metres of overburden.
Previous operators estimated that the volcanogenic sulphide portion of the TG-1 deposit contained an inferred resource of 42 million tonnes grading 2% copper, 1.5% zinc, 0.4% lead and 38 grams silver per tonne within a 125-million-tonne sulphide body dominated by pyrite.
Recent drilling by Manhattan has extended the deposit to the south. The extension and overall gold content are being incorporated into a new resource estimate. The deposit is minable by open-pit methods and will have a stripping ratio of about 1.25-to-1.
Situated 500 metres to the south, the TG-3 deposit is also host to volcanogenic-massive-sulphide-style copper-zinc-gold and silver mineralization, which is well-distributed throughout the deposit. Distinct higher-grade zones and lenses are said to exist in the overall body. Resource calculations are under way, as are proposed models for mining.
Highlights from seven holes recently drilled on the TG-3 deposit are as follows (all intervals are true width):
- Hole 44, which intersected 3.5 metres averaging 0.63% copper, 5.38% zinc, 0.67% lead, 1.35 grams gold and 86.7 grams silver per tonne, starting at a down-hole depth of 229.5 metres; and
- Hole 50, which cut 23.9 metres averaging 1.89% copper, 2.69% zinc, 0.11% lead, 1.32 grams gold and 64 grams silver, starting at 192 metres down-hole (including a 5.9-metre section of 2.21% copper, 4.76% zinc, 0.21% lead, 1.74 grams gold and 86.7 grams silver).
Holes 43, 45, 47, 48 and 49 encountered only trace mineralization. Hole 43 tested the northern extent of the North zone, whereas holes 45, 48 and 49 were designed to test the southeastern fringe of the same zone. The North and South zones both remain open.
In total, 53 holes, or 20,179 metres, have been drilled on the TG-3 target.
Manhattan can earn a 75% interest in the Tambo Grande project in return for completing a feasibility study within three years. The company must also meet two qualifying conditions before exercising the option: it must be the operator of a 10,000-tonne-per-day mine and have net assets of more than US$100 million. These terms will be waived if another company meeting these conditions owns at least 25% of Manhattan.
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