Mucho VMS for Atico in Colombia

VANCOUVER — In the midst of falling markets, Atico Mining (ATY-V) is bucking the trend with exciting drill results that keep adding to the junior’s share price momentum.

Atico is exploring the El Roble property in the Choco department of Colombia. The site has been home to an underground mine for 22 years, during which time the 400-tonne-per-day operation churned through almost 1.5 million tonnes of mineralized material grading an average 2.5% copper and 2.5 grams gold per tonne.

In January 2011, Atico inked a deal to earn a 90% stake in El Roble by paying the Colombian owners US$2.25 million over two years — which it has done — and sealing the deal with a US$14-million, lump-sum payment. This final payment would have been due in January, but Atico paid US$1.2 million to extend the option period by a year, which means the lump sum is now due in January 2014.

The extension gives Atico more time to understand just what El Roble has to offer. The property’s copper and gold mineralization occurs in volcanogenic massive sulphide (VMS) lenses, and mining to date has tapped into just a few such lenses. But Atico believes there could be many more lenses of VMS mineralization at El Roble.

Its drilling looks to be proving the point. The company’s share price jumped almost 50% in late January when underground drilling at El Roble hit a new massive sulphide body north of the mine working that produced a 119-metre intercept grading 6.9% copper and 6.3 grams gold.

Now new drill results are keeping Atico’s share price elevated. Underground drills still probing the north end of the known deposit just encountered another lens of VMS mineralization.

Atico has called the new lens Ares, though the company believes Ares is a fault-offset portion of the main Zeus massive sulphide body.
Two holes have tested Ares. Hole 28 returned 49.2 metres grading 4.11% copper, 2.32 grams gold and 6.36 grams silver per tonne, and hole 29 returned 25.3 metres grading 3.19% copper, 1.81 grams gold and 9.25 grams silver.

With these results Atico has traced Ares 75 metres below the known base of the adjacent Zeus body.

Other holes tested the main copper-rich Zeus body, which is overlain by the gold-rich Aquiles body. Mineralization stretches up to 65 metres wide where the two bodies connect. Hole 27 returned a similarly wide intercept, with 50 metres grading 2.21% copper, 3.3 grams gold and 12.93 grams silver.

Combined, these new results extend the limits of known mineralization 360 metres along strike and 350 metres below level 2000, the lowest production level in the El Roble mine.

Atico CEO Fernando Ganoza says his team is pleased with the progress. “Underground diamond drilling at the El Roble mine continues to add high-grade copper-gold mineralization below current mining operations,” he says. “The north end of the El Roble deposit is quickly becoming an area with great potential to add more massive sulphide volume.”

Atico has three drills turning at El Roble. Two rigs are working underground, testing below the 2000 level, while a third is drilling from surface on strike to the north.

There is much on-strike ground to be tested. Atico has traced the favourable contact between the mafic volcanic flows of the Barroso Formation and the overlying felsic tuffs and pelagic sediments of the Penderisco Formation for more than 10 km, which suggests there is considerable potential for lateral expansion in addition to the potential at depth.

If El Roble indeed offers all of the VMS mineralization that Atico seeks, the company says it will make the $14-million lump sum payment to solidify its 90% stake in the project. Afterwards Atico would bring its discoveries into production using the existing mine and mill infrastructure, which the company would expand from 400 to 3,000 tonnes per day.

The latest drill results from El Roble had little effect on Atico’s share price, which fell 11¢ on the news before regaining half of that ground the next day to close at 96¢. The company has a 52-week share price range of 40¢ to $1.13, and 52 million shares outstanding.