Teck (TEK-T) has enountered low-grade copper mineralization in its first round of drilling at the Mocha porphyry prospect in northern Chile.
Under an agreement with its joint-venture partner, Royal Silver Mines (RSMI-O), Teck drilled six reverse-circulation holes, each of which hit significant intervals of copper mineralization.
Beneath 48 metres of cover, hole 4 intercepted 142 metres grading about 0.35% copper; the upper third of the interval contained oxide mineralization. The hole also encountered a secondary chalcocite zone overlying primary sulphide mineralization.
All of the other holes intersected similar mineral zonation: from oxide, through a secondary chalcocite zone, into primary sulphide mineralization.
* Hole 3 encountered 101 metres grading about 0.36% copper beneath 56 metres of cover.
* Hole 5 hit 73 metres grading nearly 0.4% copper, the bottom 25 metres of which grades 0.48% copper.
* Hole 1 hit 75 metres of about 0.34% copper beneath 214 metres of cover.
* Hole 6 hit 63 metres of about 0.36% copper.
* Hole 2 hit 116 metres of about 0.2% copper.
In all, Teck completed 1,000 metres of drilling in order to locate an unexposed chalcocite blanket in the western portion of the Mocha deposit.
The holes targeted an area within 350 metres of the main deposit, following up a single-line, induced-polarization anomaly.
Previous drilling at Mocha outlined a near-surface resource of 250 million tons grading 0.4% copper, including 40 million tons of chalcocite mineralization grading 0.6% copper in the Tarapaca zone on the east side of the deposit.
Upon completing the first round of drilling, Teck has an option to earn a 60% interest in the 50,000-acre property. Teck is expected to make a decision on the matter in the next few weeks, said Royal Silver spokesman George Jay.
If Teck proceeds with the earn-in, it must purchase 1.2 million Royal Silver shares, worth approximately US$900,000. Teck would also hold a warrant to purchase 1.2 million shares at a 20% discount to the market price on or before the first anniversary of the agreement, plus another warrant to purchase 1.2 million shares at a 10% discount on the second anniversary.
Royal Silver must spend 85% of the funds from Teck on the Mocha property.
Ultimately, Teck can earn a 60% interest by completing a feasibility study and arranging financing for project development.
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