Southern Rio Resources (SNZ-V) has begun a 12-hole, 3,500-metre reverse-circulation drilling program at the Santo Thomas copper-gold-molybdenum porphyry prospect in Chile.
The holes will test four geophysical anomalies, three of which are in a 2-by-3-km area. The property has not been previously drilled.
Santo Tomas comprises 63 sq. km at an elevation of 3,300 metres. It is 20 km southwest of the Collahuasi copper mine and 12 km west of the Quebrada Blanca copper mine.
Of 193 samples collected from the prospect:
- 37 samples ran above 10 parts-per-million (ppm) molybdenum, with a high of 243 ppm;
- 12 were above 0.1 gram gold per tonne, with a high of 0.73 gram; and
- 12 assayed greater than 0.01% copper, with a high of 0.051%.
The inner molybdenum-gold core of partially brecciated and stockworked intrusive rock exhibits strong leaching. It shows evidence of argillic alteration and boxwork-textured jarosite and hematite. The area is surrounded and overlapped by seritized and illitized zones.
Southern Rio can acquire a 100% interest, subject to a 2% net smelter return royalty, by paying the owner US$6 million and issuing 200,000 shares over four years.
BHP‘s Chilean subsidiary can earn an initial 55% interest in the property by paying Southern Rio US$125,000 within 45 days and spending US$2 million over four years. The major has also agreed to pay all underlying land costs, which total US$6 million, over three years.
In return, Southern Rio will issue to BHP 2 million warrants exercisable into shares at 41 each for 18 months.
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