Mansfield, Teck shutdown at Cerro Samenta

In a reversal of an earlier decision, a judge in Argentina has given the title of a property hosting the Cerro Samenta copper porphyry project to Salta resident Jorge Daroca, effectively ending work there by partners Mansfield Minerals (MDR-V) and Teck (TEK-T).

The Vancouver-based partners have been embroiled since July in the dispute, which centres on the location of claims (or cateos) in relation to the location of the geographical point known as Cerro Samenta.

The dispute appeared to have been resolved in September when the same judge, using notes from the original 1982 military survey and a field report from the Mining authority, confirmed that the reference point used by the partners was Cerro Samenta. The ruling also stated that the companies’ cateos 15208, 15301 and part of 15420, covered the North and South Samenta anomalies.

At the time, the judge instructed that the claim maps be revised to reflect the true location of Cerro Samenta. He also ruled that a complete report be filed in the event that the area’s existing claims were modified.

Daroca owns cateo 14816, in which Corriente Resources (CTQ-T) can earn a 100% interest. Daroca, according to Corriente, staked the claims in February 1994 based on work conducted by Fabricaciones Militares and the United Nations in the early 1970s. That work outlined an anomaly measuring 1,000 by 2,200 metres. Cateo 14816 is said to be staked to encompass the occurrence.

Cerro Samenta was used by Daroca as a reference point to describe the location of the property. His reference point, however, was found to be inaccurate: it was off 3 km to the northeast of Cerro Samenta, and 100 metres lower in elevation.

However, when drafting his original application for the cateo, Daroca, who planned to stake the property, relied on the poor claim map that was being used at the time

Mansfield arrived on the property in November 1994 and, working from the field, measured back to Cerro Samenta, the area’s known geographical point.

The company applied for its mineral title in May 1995. Under Argentine law, a legal description of the property was published in the “Boletin Official”, after which the public had 30 days to oppose the application. Mansfield received title to the property in March 1996.

The company then optioned a half interest in the property to Teck, which is required to spend US$7.5 million and pay US$1.6 million over five years. If Teck arranges all financing to production, it can acquire another 10%. To date, the company has spent approximately US$1 million.

The Cerro Samenta project is regarded as a highly prospective, Chilean-style copper porphyry property. Situated in northwestern Argentina, it lies in the Puna region, 300 km northwest of Salta.

At North Samenta, primary copper mineralization is evident over a 1,200-by 1,000-metre area. Surface sampling returned 0.5% copper over 250 metres (including 0.7% copper over 150 metres, and 1.4% copper over 75 metres) and 0.96% copper over a diameter of 200 metres.

In addition, geophysical work there identified a coincident, induced-polarization (IP) anomaly measuring 1,600 by 1,000 metres. A second IP anomaly measuring 1,000 by 1,200 metres was outlined at South Samenta.

Eight trenches along the periphery of the North Samenta anomaly revealed a copper-depleted leached cap of variable thickness. In addition, a strongly mineralized potassic core was uncovered in two trenches, and another cut intermittent supergene copper mineralization.

At South Samenta, a leached cap covers an area measuring 1,000 by 3,000 metres. Underlying supergene copper mineralization is exposed in a deep cutting canyon.

After the September ruling, Teck, Mansfield and their Argentine lawyers spent the next couple of months reviewing the property’s title. Satisfied that the title was clear, the partners commenced a 10-hole, 3,000-metre drilling program in late November.

Gordon Leask, president of Mansfield, described the most recent ruling as “very irregular,” adding, “the judge has turned 180 degrees.” The company has appealed, citing inconsistencies in the latest decision. “The judge has ignored and overruled his own decision… confirming the company’s ownership of the property,” Mansfield said in a release.

“This is illegal under Argentine law,” it stated. “This also contradicts his advice, and the advice of the Mining Department previously given to the company and Teck that the company had good title to Cerro Samenta and could proceed with its drilling operation.”

Kenneth Shannon, Corriente’s president, calls the judge’s decision a definitive ruling. “A series of hearings were conducted by a mining judge and a mining court,” he said. “Everybody involved made numerous submissions, a lot of facts were heard and talked about, and after a due deliberation process, a judgment was rendered.

“[The judge] addressed all the outstanding issues, his final judgment had seven points to it. Those seven points gave Daroca a victory on all of his submissions and requests, and denied the counterclaims of Mansfield.” Shannon said that the ruling can’t be misinterpreted, and that the property “was clearly awarded to Daroca.”

Daroca was awarded the title, according to Shannon, because he staked the claim first, and in accordance with practices commonly used in Salta.

By the latest ruling, when the program was shutdown, Teck and Mansfield had completed two holes on Samenta, and were sinking another.

Under its agreement with Daroca, Corriente can acquire a 100% interest in cateo 14816 for 1 million shares and cash payments of US$1.35 million. On completion of a feasibility study, Corriente is required to issue a another 1 million shares.

Corriente has announced it will proceed with the exploration and development of the Samenta project, and another 60,000 ha it holds contiguous to Samenta.