It was a long time coming, but
The Peruvian government issued a final decree approving Manhattan’s option to earn a 75% interest in the Tambo Grande project, which comprises 10 concessions, or 10,000 ha. The concessions host one identified polymetallic volcanogenic massive sulphide deposit, dubbed TG-1, plus seven other geophysical gravity anomalies within a 5-km radius. The seven anomalies have yet to be drill-tested.
The decree approves an option agreement, which will govern the ownership, exploration and development of the Tambo Grande concessions. The key business terms of that agreement include the following provisions:
n Manhattan is required to complete a feasibility study and financing plan within three years, and elect to proceed with the development of a mining project. The company will be required to meet two qualifying conditions prior to exercising the option: Manhattan must be the operator of a 10,000-tonne-per-day mining operation and have net assets valued in excess of US$100 million. These conditions will be waived if a company that meets these criteria owns a minimum of 25% of the shares of Manhattan.
n Upon exercise of the option, Empresa Minera Tambo Grande (EMTG) will be incorporated to develop and operate the mining project. Manhattan will own 75% of EMTG, while the remaining 25% interest will be owned by the Peruvian government through Minero Peru.
n EMTG will then have four years to develop Tambo Grande, with Manhattan responsible for arranging financing and contributing the equity portion held by the government. The Peruvian government will retain a sliding-scale net smelter return royalty ranging from nil at US60 cents per lb. copper to 5% at US$1.20 per lb.
n Manhattan will guarantee that the mining methods to be used will not physically affect the town of Tambogrande (population 12,000), which partially overlies the TG-1 deposit. (The remaining seven anomalies lie in agricultural or undeveloped areas.) In addition, the tailings should be in areas that are separate from the surrounding agricultural land.
Manhattan President Graham Clow says that, in terms of permitting, “every single thing is done.” With two drill rigs standing by, Manhattan will be ready to start drilling by the end of May. The initial focus will be to extend the TG-1 deposit to the south. There are several geophysical anomalies along that trend, including TG-3, a separate and distinct bull’s-eye gravity anomaly, which lies 1.5 km way. Between the two bull’s-eye anomalies sits a weaker anomaly.
About 2 km south of TG-3 sits TG-7, where, says Clow, “there is quite a strong trend.” He adds: “Our intent is to extend TG-1 and build tonnes to the south.”
TG-1 was discovered in 1979 by French government-owned Bureau de Recherches Gologiques et Minires. Twenty-three drill holes defined an inferred resource, minable by open-pit methods, of 42.3 million tonnes grading 2.04% copper, 1.47% lead, 0.36% lead and 37.7 grams silver per tonne. The projected stripping ratio was 2-to-1.
The resource was defined within a 700-by-350-metre gravity anomaly. The TG-1 deposit is bowl-shaped and covered by 25-40 metres of alluvium and leached cap. The deposit remains open to the southwest, and its bottom extends 250 metres below surface.
To date, neither the main sulphide body nor the overlying leached oxide cap, which is depleted in base metals, has been systematically sampled for gold. However, test sampling of drill core by consulting firm Derry, Michener, Booth & Wahl (DMBW) indicates a gold content of about 1 gram in the oxide cap and in the sulphides.
Manhattan also holds interests in additional ground contiguous to the Tambo Grande concessions, including a 100% interest in the 73,700-ha Lancones concessions and a 51% interest in the 3,200-ha Papayo joint-venture concessions.
Manhattan conducted airborne geophysical surveys in 1997 and follow-up ground gravity surveys in 1997-1998. Those programs revealed a total of 27 anomalies on the Lancones concessions, of which 15 have since been rejected. Two drill targets are confirmed, and follow-up surveys are recommended for three of the anomalies. One other anomaly is undergoing a reconnaissance survey. The Papayo concessions host six anomalies. Two drill targets on these concessions are confirmed, and follow-up surveys are recommended for three anomalies, one having been rejected.
DMBW has recommended a phased $11-million program to bring the Tambo Grande project through the prefeasibility stage. That work would include: follow-up ground geophysics, followed by the drill testing of the seven other anomalies; definition drilling to outline a minable reserve at TG-1; additional metallurgical tests; and environmental base-line, engineering and socio-economic studies.
Manhattan will use the proceeds from a $3-million special warrant financing that closed in January 1999 to fund the first phase of the proposed 12-month exploration and feasibility program.
Manhattan has 25.3 million shares outstanding, or just under 28 million on a fully diluted basis.
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