PacMag Metals Hits a Mother Lode in Nevada
By Andrew Burger
08 Oct 2006 at 03:23 PM EDT
resourceinvestor.com
DAMMAM, Saudi Arabia (ResourceInvestor.com) -- West Perth, Australia’s PacMag Metals (ASX: PMH) on October 5 announced that its Ann Mason property in western Nevada contained 64% more copper than previously estimated. The company’s announcement on the Australian Stock Exchange (ASX) sent its shares sky-rocketing to A$ 0.43, a 132% one-day gain.
Based on the results of a recently concluded resource estimate, the Ann Mason property’s inferred resources include 810 million tonnes of 0.40% copper and 0.004% molybdenum (0.30% copper cut-off) with higher grade zones including 221 million tonnes at 0.51% copper and 0.004% molybdenum (at a 0.43% copper cut-off), making it one of the largest undeveloped deposits of its type in the North American continent, according to Michael Clifford, managing director.
The resource estimate was conducted over the past 12 months for PacMag by Golder Associates, an international mining company with experience in evaluating copper porphyry deposits. The estimate complies with the latest Australian resource reporting codes (JORC).
Clifford said in the ASX statement that the 3.2 million tonnes (7.1 billion pounds) of contained copper metal in the deposit had an in-ground value of US$25 billion based on current prices.
“Ann Mason is an advanced exploration project with a very large inferred resource…and the immediate focus is on adding value to the project with additional drilling planned to assess large data gaps in the north-west of the resource along strike from known higher grade mineralization,” Clifford told RI.
Revitalising Anaconda Deposits
The Ann Mason project consists of a total of 80 unpatented mining claims covering a deposit discovered in the 1970s by the Anaconda Copper Corporation. Anaconda completed resource and reserve estimates, as well as detailed mining studies, but PacMag undertook new estimates in order to comply with Australia’s JORC mineral resource reporting requirements, and also to better survey and sample the resource area. In addition to meeting JORC requirements, management expects that its latest set of results will also comply with Canadian National Instrument NI 43-101 requirements following completion of additional documentation.
"We own 100% of the Ann Mason copper-molybdenum-gold deposit, which is close to rail and power and is in Phelps-Dodge's backyard, located in what is considered the most attractive location for mining investment in the world," Clifford stated in the company’s ASX release.
According to the resource estimate and report, the deposit is “open at depth” on most sections drilled to date, indicating that additional tonnes could be added by drilling beyond the limit of existing drill holes.
“Higher grade copper sulphide mineralisation at Ann Mason starts from 97 metres below surface, extends to a depth of greater than 880 metres and is continuous over 1600 metres of strike and 750 metres of width,” Clifford stated in the exchange announcement.
PacMag has drilled through high-grade copper mineralisation grading up to 10.5% copper in the northwest of the property, which has only been sparsely drilled. These and additional results are located in a “highly prospective zone along strike from the high-grade zone on the south flank of the deposit,” according to company information.
In addition to two large new target areas in the northwest, the company is assessing new regional targets in the vicinity of Ann Mason that management believes will be synergistic with its potential future operations the property.
Management noted that these target areas also include a partly overlapping higher grade molybdenum zone of 220 million tonnes at 0.014% molybdenum and 0.33% copper (0.008% molybdenum cut-off). These include gold and silver rich zones that were not included in the ASX announcement due to inappropriate assay techniques used on the initial drill core for gold and silver in the 1970's and therefore could not be estimated with sufficient confidence.
Mineralisation & Metallurgy
In a February 2006 ASX report, management characterized mineralisation of the Ann Mason deposit to be “highly favourable.” “The mineralogy of the Ann Mason ore is simple; sulphide minerals are not interlocked, and the copper minerals are coarse grained and clean. Bulk flotation recovered more than 90% of the copper, 65% of the molybdenum, and 65% of the silver into a concentrate grading 26% copper. This performance is considered good, and compares favourably with that of operating porphyry copper projects,” they reported.
PacMag management also draws attention to the fact that, given its estimated size and composition, “the Ann Mason copper deposit compares favourably in size and grade to a number of existing North and South American porphyry copper mining operations, such as Teck-Cominco's Highland Valley copper mine in Canada, Quadra's Robinson copper mine in Nevada and Phelps Dodge's Arizona copper operations at Cobre-Chino and Morenci.”
They add that Ann Mason is of a similar size and grade to other publicly reported resources and reserves from deposits under evaluation where detailed feasibility studies are in progress, such as at Aur Resources' Andacollo sulphide copper deposit in Chile and BC Metals' Red Chris porphyry copper deposit located in British Columbia.
Source: PacMag Metals, ASX Announcement, Oct. 5, 2006
Looking Ahead
The property’s location in western Nevada puts PacMag in good position to develop the property. “During the fourth quarter of this year, we will complete our scoping level study, which will provide us with the details we need for mine and processing operations. Also, we have in place a test drilling program for our northwestern resource growth targets,” Clifford told RI.
PacMag management has obtained all the permits required to commence drilling, and the property is close to existing infrastructure, such as power and railway lines, a natural gas pipeline, and the town of Yerington, management pointed out in its ASX report.
“The Fort Churchill power station is located 24km northeast of Ann Mason, whilst a railway line is only 26km northeast. The town of Yerington located 8km east of Ann Mason is accessed from Reno via the sealed A95 alternate route to Las Vegas and is supplied by a natural gas pipeline.”
Management has begun searching for a contractor to undertake a new drilling program to further test northwestern resource targets, which it expects will begin later this month. They noted that a significant increase in exploration activities in the region during the past six months has caused a delay in carrying out this phase of their exploration and development plans.
The scoping level mining study is under way and is due for completion in Q4. In addition to examining mining and processing options, it is to include an open pit optimisation plan, and provide operating and capital cost estimates with sufficient detail to allow assessment of the project economics, according to the ASX announcement. |
