Rio Tinto signs on at Pimenton

Vancouver — Mining giant Rio Tinto (RTP-N) has converted its letter of understanding with South American Gold and Copper (SAG-T) into a full option agreement on the junior’s Pimenton project in the high Andes of east-central Chile.

The major entered the picture earlier this year with an eye to testing the porphyry copper potential beneath South American Gold and Copper’s (SAG&C) small-scale gold mine, located in the Central Porphyry copper belt.

Rio Tinto has drilled a few holes on the deeper porphyry copper target at Pimenton but no results have been reported.

Rio Tinto can earn a 60% interest by meeting a 4-year schedule of expenditures and completing a feasibility study within seven years.

Since resuming operations in mid-2004, Pimenton produced limited amounts of gold from underground mining of narrow, mineralized veins.

Operating problems have resulted in lower than anticipated mining rates with average gold output of just several hundred ounces per month, along with nominal amounts of copper and silver. Also, recent heavy snowfall caused an avalanche risk at the mine, further hampering production.