Partners resume work at Magistral

Partners Inca Pacific Resources (IP-V) and Anaconda Chile have kicked off a spring exploration program at their Magistral copper-skarn target in Peru.

Anaconda stands to earn a 51% interest in the property by conducting a US$5.75-million work program. Once this has been completed, Anaconda can increase its ownership to 65% by bringing the property to the feasibility stage within two years.

Magistral is 160 km northwest of the large Antamina copper-zinc deposit, currently being developed by Noranda (NOR-T), Rio Algom (ROM-T), Teck (TEK-T) and Mitsubishi. Antamina, in turn, is 385 km northeast of Lima.

Reserves at Magistral are pegged at 500 million tonnes averaging 1.2% copper, 1% zinc and 0.03% molybdenum, plus 11 grams silver per tonne.

Geological mapping is under way and will be followed by a geophysical survey. Once drill pads are constructed (probably by late April), a 6,000-metre program of diamond drilling will commence.

Results from drilling in 1999 indicate that Magistral has the potential to host a large copper-molybdenum skarn system. Significant intersections were obtained from strongly mineralized skarn bodies hosted in the Celendin formation — the same limestone unit that hosts the skarn at Antamina.

At Magistral, as at Antamina, copper-molybdenum mineralization is found disseminated in a quartz-monzonite intrusive and in a skarn aureole. At Majistral, more than 90% of the skarn detectable on surface or in drill holes exhibits copper mineralization, with subordinate silver and moly.

Magistral is underlain by a sequence of northwesterly striking, westerly dipping sedimentary and carbonate rocks of Jurassic-to-Cretaceous age. These sedimentary sequences are thought to be thickened by easterly directed thrust-faulting. In the Magistral deposit area, the predominant rocks are thickly bedded limestones, which are intruded by Tertiary-aged plugs, sills and dykes of quartz monzonite.

The most promising skarn intersections came from widely spaced holes in the western section of the property. Geophysical anomalies indicate the presence of a westerly dipping, horseshoe-shaped skarn body. Holes 2, 3, 6 and 8 cut copper and moly mineralization over impressive intersections. Hole 2 assayed 0.73% copper, 0.014% moly and 3.23 grams silver over 332.4 metres, whereas hole 3 intersected 442.2 metres averaging 0.62% copper, 0.059% moly and 2.29 grams silver.

Holes 1, 4 and 5 encountered post-mineralization faults, which are believed to have offset the principal skarn bodes. Surface and underground mapping will attempt to resolve the structural complexities.

In other news, Barrick Gold (ABX-T) has decided to step up exploration at Inca Pacific’s Cerro Oro gold property in Ancash, Peru. Barrick can earn a 70% interest in the property by making cash payments totalling US$600,000 and spending US$1.5 million on exploration. The major has until the end of 2003 to make a production decision.

Cerro Oro is 55 km southeast of Barrick’s Pierina mine and covers a high-sulphidation alteration complex hosted in tuffaceous Cenozoic-aged volcanic rocks. Previous exploration includes prospecting, geological mapping, soil and rock geochemistry, induced-polarization and magnetometer geophysical surveys, and more than 3,000 metres of diamond drilling in 14 holes.

Barrick will focus its attention on a gold anomaly associated with arsenic and mercury in a zone of alunite, dickite and kaolinite alteration and silicification. Plans call for geophysical work to be followed by 1,500 metres of drilling.

Cueva Blanca

Meanwhile, Inca Pacific’s Cueva Blanca deposit — a low-sulphidation gold target in the Department of Lambayeque — is being explored by St. Elias Mines (SLI-V). The Vancouver-based junior can earn a 49% interest by making cash payments totalling US$50,000, spending US$1.5 million on exploration, and issuing 500,000 shares — all over a 3-year period ending Feb. 1, 2002. The company can increase its interest by an additional 21% by paying US$250,000 in cash, spending US$2 million on exploration and completing a bankable feasibility study.

The property covers a large epithermal alteration system formed in Tertiary-aged volcanic rocks. The system features large bodies of clay-altered and pyritic, silicified breccia, as well as a gold-silver bearing epithermal quartz vein system with a strike length exceeding 3 km.

High-grade gold assays obtained from the Zona Verde discovery (an outcrop in the northern portion of the property) returned 47.12 grams gold per tonne over 9 metres. Assays tested for both fine and coarse gold in the pulps, and a considerable amount of gold reported to the coarse fraction.

The host rock at Zona Verde comprises limonite, argillicized feldspar and biotite, suggesting that the original rock was an intrusive. The host is cut by a stockwork of quartz and quartz-pyrolusite veinlets. No major structural feature that might control the gold mineralization has been observed.

Outcrops are sparse on the 11,000-ha property. However, trenching has outlined a large (1.2 km long and several hundred metres wide) anomalous zone of gold mineralization surrounding the Zona Verde. Chip samples recovered from trenches north of Zona Verde assayed 0.5 gram gold over 65 metres and 0.25 gram gold over 100 metres.

St. Elias has budgeted US$400,000 on a program that will include trenching, geological mapping, geochemical sampling, geophysical surveys and diamond drilling.

Pasacancha

Meanwhile, in north-central Peru, Inca Pacific has optioned to MacMillan Gold (MMG-T) its Pasacancha 1, 2 and 6 concessions. MacMillan can earn a 100% interest in the property by paying US$20,000 in cash and issuing 500,000 shares over four years.

The Pasacancha concessions comprise a total of 2,100 ha, next to an area where MacMillan has been exploring for copper and gold. The company plans to begin a new program of regional exploration in April, possibly followed by drilling.

Having farmed out most of its properties, Inca Pacific intends to focus its own exploration efforts on the Santo Domingo high-grade tin prospect, 20 km west of the San Rafael tin mine operated by Peruvian-based Minsur. Current reserves at San Rafael stand at 13 million tonnes grading 5% tin.

In April 1999, Inca Pacific entered into an option agreement with Minsur to acquire a 51% interest in Santo Domingo. According to the agreement, Inca Pacific can earn a 51% interest in the property by spending US$2 million on exploration over three years, including 7,500 metres of drilling. Once Inca Pacific is vested, Minsur has a one-time option to increase its ownership to 60% by preparing a bankable feasibility study within two years.

At Santo Domingo, copper-tin mineralization occurs in veins hosted by an intrusive and sedimentary sequence similar to that found at San Rafael. Oligocene-aged monzogranite porphyry bodies and dykes intrude Ordovician-aged shales and siltstones. Mineralization exposed at the surface resembles the upper part of the San Rafael mine (Inca Pacific has been conducting geological, geochemical and geophysical studies of San Rafael, which it hopes to use as an aid in exploring Santo Domingo). Drilling at Santo Domingo is anticipated for the fourth quarter.

Inca Pacific has no debt, about $900,000 in its coffers, and 26 million shares fully diluted.