More solid results from San Nicolas

The latest assay results from the San Nicolas massive sulphide discovery in Mexico’s Zacatecas state bolster the theory that the mineralization is capped by a higher-grade polymetallic zone, with a lower zone of enriched copper-silver mineralization.

San Nicolas is part of the El Salvador joint-venture project, held 55% by Teck (TEK-T) and 45% by Western Copper Holdings (WTC-T). The discovery area occurs on claims optioned from Luismin, a Mexican mining company that retains a back-in right to a 25% participating interest.

Hole SAL-33, a 100-metre stepout on the western section of San Nicolas, intersected 155.7 metres of massive sulphides averaging 1.29% zinc, 1.76% copper, 0.2 gram gold and 16.38 grams silver per tonne, at a depth of 160.5 metres.

The top 18.5 metres of the intersection averaged 7.48% zinc and 3.03% copper, plus 0.41 gram gold and 31 grams silver. Continuing down the intercept, the assay results were: 32.5 metres averaging 0.75% zinc, 0.55% copper, 0.4 gram gold and 13.72 grams silver; 45.5 metres averaging 1.34% copper, 0.47% zinc, 0.2 gram gold and 14.02 grams silver; 25.5 metres averaging 2.86% copper, 0.18% zinc, 0.01 gram gold and 17.29 grams silver; and 33.7 metres averaging 1.98% copper, 0.35% zinc, 0.03 gram gold and 13.4 grams silver.

Chris Bradbrook, a Toronto-based mining analyst with Yorkton Securities, estimates the top 18.5 metres of hole SAL-33 has a gross metal value of US$141.50 per tonne and a net smelter return of US$63.82 per tonne. He terms it “a significant economic intersection.”

Hole SAL-31, from which hole SAL-33 was a 100-metre stepout, was previously reported to contain a 268.3-metre-thick interval of massive sulphides averaging 2.53% zinc, 1.44% copper, 0.39 gram gold and 18.71 grams silver, starting at a depth of 165.7 metres. The upper 29.8 metres of the intersection averaged 15.88% zinc, 2.06% copper, 1.26 grams gold and 73.5 grams silver — the highest grades to date. Bradbrook estimates the upper 29.8 metres of SAL-31 has a gross metal value of US$232.32 per tonne and a net smelter return of US$98.86 per tonne.

Assay results are pending for two other holes. Hole SAL-34, drilled 125 metres west of SAL-33, intersected stringer mineralization from a depth of 155.4 to 280.5 metres; a massive sulphide zone extending from 451.8 to 506.4 metres and stringer mineralization down to 519.6 metres.

Hole SAL-35, drilled 100 metres east of hole SAL-29, encountered a 130.5-metre interval of massive sulphides at a depth of 223 metres, followed by intermittent stringer mineralization down to 500.2 metres.

Hole SAL-29 was previously reported to have hit 308 metres averaging 1.16% zinc, 1.16% copper, 0.37 gram gold and 23.6 grams silver, starting from a depth of 188 metres. The upper 85.5 metres averaged 3.4% zinc, 0.49% copper, 1.18 grams gold and 67.2 grams silver, including a 19.5-metre interval averaging 5.27% zinc, 0.27% copper, 2.37 grams gold and 165.3 grams silver, starting at 195.5 metres.

To date, nine drill holes have tested an induced polarization (IP) geophysical anomaly that has an aerial extent of 500 by 500 metres at a 200-metre depth. Teck is drilling off the limits of the discovery on 100-metre centres using two rigs and has begun metallurgical testwork on the various types of mineralization. The company has also planned a wide-ranging ground IP survey, to be followed by a gravity survey. The current phase of exploration is budgeted at about $2.4 million.

In describing the recent massive sulphide find, Teck Vice-President of Exploration William Meyer says, “It’s not exactly a flat-lying deposit; it’s more like a very thick blob. It’s up to 800 ft. thick in places.” Meyer believes the western and southern ends of the deposit have been down-faulted and probably side-faulted as well.

With assay results in for seven holes, Meyer says the San Nicolas discovery seems to be hanging together quite well, except for a couple of holes that are separated from the rest by a fault. He describes San Nicholas as having a higher-grade zinc-gold-silver-copper zone at the top that varies from 15 to 30 metres in thickness and is surrounded by a precious metal halo. He says the economic viability of the halo will depend on the whether the deposit is mined by open-pit or underground methods. Beneath the halo, there is a low-grade zone, which Meyer says is probably uneconomic, and beneath that, there is a thick, enriched zone of copper-silver mineralization.

Meyer expects to have a solid understanding of the deposit, including metallurgy and reserves, by the time of the company’s annual meeting in April.

Teck has the right to earn an additional 10% interest in the El Salvador project by arranging production financing and can buy a further 5% from Western Copper, based on net present value, upon completion of a feasibility study.

If Teck and Luismin complete all their obligations, Western Copper’s interest in San Nicolas would be reduced to 22.5%.