Philex sees more signs of a second porphyry (May 01, 2002)

Vancouver — As impressive drill results keep rolling in from the Boyongan copper-gold prospect in the Philippines, reconnaissance drilling to the south continues to yield indicators of a second mineralized body for partners Anglo American (AAUK-Q) and Philex Gold (PGI-V).

“We are pleased to see six drilling rigs now operating on the property,” says Philex Gold’s chief executive officer, Gerard Brimo. “Four rigs conducting resource definition drilling on Boyongan and two on scout drilling south and west of the deposit.”

At Boyongan, hole 37 was collared 200 metres east of hole 35 (469 metres grading 0.67% copper and 1.09 gram gold per tonne) and drilled 60 to the north. This hole cut oxide mineralization from 138 to 339 metres down-hole, followed by sulphide copper mineralization through to the end of the hole at 378 metres. A 225-metre section from the top of the oxide portion returned 0.52% copper and 0.39 gram gold.

Hole 38 was drilled 100 metres north of hole 36 (215 metres grading 1.44% copper and 1.96 grams gold) and inclined 60 to the north. This hole hit oxide mineralization from 51 to 355 metres down-hole, followed by sulphide copper mineralization. A 366-metre section, starting from the top of the oxide zone, ran an eye-popping 1.66% copper and 4.49 grams gold.

Moving 100 metres north of hole 35 and drilled at 60 to the north, hole 39 cut 522 metres of oxide mineralization from 99 metres down-hole, followed by sulphide copper mineralization through to the end of the hole at 646 metres. A 547-metre section from the top of the oxide zone returned 0.46% copper and 0.51 gram gold.

Hole 40 was drilled 100 metres north of hole 37, at 60 to the north. This hole hit the mineralized body at 125 metres down-hole, with copper oxides occurring until 265 metres. A mixed oxide-sulphide zone followed until 310 metres, with the sulphide zone extending through to the end of the hole at 457 metres. Starting from the top of the oxide zone, a 332-metre portion averaged 0.55% copper and 0.32 gram gold.

Hole 41 was collared 100 metres northwest of hole 38 and drilled 60 to the north. This hole cut the oxide zone from 155 to 332 metres, followed by sulphide mineralization through to the end of the hole. Assay results are pending.

Hole 42 was collared 100 metres north of hole 39 and cut the oxide zone at 173 metres down to its current depth of 344 metres.

Some 100 metres north of hole 40, hole 43 hit the oxide zone from 133 to 224 metres, followed by the sulphide mineralization down to its current depth of 407 metres.

One of the rigs is turning 100 metres south of hole 36, where hole 45 is currently in unaltered cover at 10 metres.

Two rigs

The partners also have two rigs testing for a second mineralized copper-gold porphyry, south and west of the Boyongan drilling. Earlier this year, the partners punched two holes in the Magpayang target, some 4 km south of Boyongan, with both ending in unaltered cover at depths of 120 and 315 metres, respectively.

The latest stepout drilling is focusing on an area much closer to Boyongan. Hole 1 was collared 600 metres south of hole 30 (debris flow returned 0.1% copper and 0.65 gram gold over 12 metres) and failed to hit any significant mineralization. However, propylitic altered basaltic andesite was encountered at 209 metres down-hole, indicating to the partners that a concealed porphyry system may lie to the south.

Hole 2 is drilling 600 metres south of hole 31 (no significant values) and hit weakly altered limestone with calcite-pyrite veinlets from 300 metres to its current depth of 349 metres.

The second rig is turning some 400 metres west of hole 25 (513 metres grading 0.42% copper and 0.38 gram gold), where hole 3 has cut a xenolith of debris flow containing altered porphyry clasts with disseminated chalcopyrite and pyrite from 322 to 325 metres down-hole.

“The early results of the scout holes south of Boyongan strengthen our conviction that another porphyry system lies in the general vicinity,” Brimo says.

Some 15,000 metres of delineation drilling and 3,000 metres of reconnaissance drilling are slated for 2002.

‘High sulphidation’

The Boyongan target lies on the North property in eastern Mindanao, where all the previously discovered copper porphyry deposits occur as clusters farther to the south. The companies are defining a large body of oxide and primary copper-gold mineralization that is covered by later-stage volcanics. High-grade copper-gold values are associated with “high sulphidation” mineralization overprinting an earlier copper-gold porphyry event.

Typically, the mineralized district is part of a north-northwest-striking belt of pre-Miocene arc basement that has been severely fractured by multiple splays of the major Philippine fault system. Miocene quartz diorite stocks and later subvolcanic andesite porphyries invade late Cretaceous and lower Tertiary rocks. Many of these mineralized intrusions are structurally controlled, occurring along major high-angle faults.

Earlier this year, Philex sold an additional 10% equity stake in the project and surrounding ground to Anglo American for US$20 million. Additional payments of up to US$5 million will be required, should the metal content of the deposit (or from any other discovery within the surrounding claims) contain more than 7.96 billion lbs. copper-equivalent. The additional payments will be computed by applying US2.51 per lb. copper-equivalent to 10% of the metal content above 7.96 billion lbs. copper-equivalent, multiplied by a factor of 0.5.

Philex and Anglo American own the project equally; the major can earn an additional 30% interest by completing a bankable feasibility study.