SW Res. sells Poracota

Southwestern Resources (SWG-T) has inked a deal to sell its half-stake in the Poracota gold property in Peru to Compania de Minas Buenaventura for $7.1 million over three years.

Teck Cominco (TEK-T) owns the remaining half of the property, which lies 15 km west of Buenaventura’s Orcopampa mine, producer of 150,000 oz. gold per year.

Under the deal, Buenaventura has paid Southwestern $159,000 and will make staged payments of $318,000, $477,000 and $6.2 million over the term of the agreement.

Buenaventura has an option to pick up an additional 25% of the project from Teck Cominco for an additional US$3 million over three years. The company has committed to spend at least US$400,000 in the first year of the option, and must spend no less than US$1 million in the second year and US$1.6 million in the third year to maintain its option.

Poracota is 160 km northwest of Arequipa. Numerous zones of gold-rich pyrite mineralization and native gold have been identified in a hydrothermally altered 35-sq.-km area with the margins of a volcanic collapse structure or caldera.

So far, four zones — Poracota B, Sombreruni, C Zone and Puma — have been found to contain gold values in excess of 1 gram gold per tonne at surface.

Widely spaced drilling on Poracota B has defined an inferred resource of 14.5 million tonnes running 2.26 grams gold in an interpreted stratabound, gold-bearing lens. The lens is hosted by a thicker 30-to-100-metre alteration zone, one of several stacked zones said to have potential to host significant gold values. The gold mineralization is open downdip and along strike to the south.