Rio drops Vicuna property

Vancouver — Despite cutting wide zones of copper-silver mineralization in its first round of drilling on the Vicuna gold project in northwestern Argentina, Rio Tinto (RTP-N) has decided to stop exploring the promising property.

Operator Tenke Mining (TNK-T) completed a 24-hole program over the project earlier this year. The reverse-circulation work tested five target areas on the 264-sq.-km project, which is located in the prolific gold belt that hosts Barrick’s Pascua deposit and the Homestake-Barrick Veladero deposit.

The most encouraging results came from the Filo del Sol target. It revealed intervals of quartz-alunite-enargite-pyrite-chalcocite mineralization, which is typical of the sulphide portion of high-sulphidation epithermal gold systems.

The best result came in hole 4, which cut 118 metres grading 0.51% copper, 81 grams silver and 0.38 gram gold per tonne from a down-hole depth of 162 metres. This interval included a higher-grade section running 0.55% copper, 192 grams silver and 0.39 gram gold from 202 metres down-hole. The hole terminated in mineralization, with the last 10 metres grading 0.92% copper, 5 grams silver and 0.67 gram gold.

Another significant intercept was hole 5, which cut 168 metres grading 0.86% copper, 33 grams silver and 0.23 gram gold. The mineralization is associated with a complex system of erupted breccias and fault structures. It seems to resemble sulphide portions of the Pascua deposit, 60 km to the south.

A further 500 metres to the south, hole 20 cut 58 metres averaging 0.85% copper, 18 grams silver and 0.41 gram gold. Included in this interval was a higher-grade supergene zone running 1.9% copper over 18 metres.

In 1999, Tenke put together the Vicuna project, a package of ground between the Maricunga belt to the north and the El Indio belt to the south. The exploration concessions had been held by Cameco (CCO-T), Westward Exploration (WWE-V) and Cyprus Amax Minerals (CYN-N).

Tenke can earn a 100% interest in the package by spending US$4 million on exploration and issuing 2.4 million shares over four years.

The company subsequently augmented its position by optioning the Lirio property, which is adjacent to Vicuna, in return for exploration expenditures of US$1.5 million over five years.

Tenke also has the right of first refusal on several properties north of Vicuna. These are known collectively as Yamiri.

Rio Tinto was earning a 51% interest by spending US$10 million over four years.