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Metminco, through its wholly owned subsidiaries Minera Hampton Chile Limitada and Minera Hampton Peru SAC, holds an interest in a portfolio of base and precious metal projects that are located within well-constrained metallogenic belts associated with the Andean Cordillera in Chile and Peru.
By April 2011, Metminco had secured a 100% interest in the majority of its projects, allowing it to focus on the exploration and development of its key projects.
The Company has four projects, of which the most advanced projects are the Los Calatos (copper-molybdenum), Mollacas (copper leach) and Vallecillo (gold-zinc) projects, for which mineral resources have been classified in accordance with the JORC Code (See Mineral Resources Section).
The Company's premier project, Los Calatos, is located in southern Peru near, and in a similar geological setting to, three large operating open pit copper-molybdenum mines, namely Cerro Verde, Cuajone and Toquepala (Figure 1).
Figure 1: Location of Los Calatos and surrounding operating mines.
Metminco has completed four phases of drilling at Los Calatos (Phase 1: 6,385m; Phase 2: 9,100m; Phase 3: 35,897m and Phase 4: 65,677m), which in addition to the prior drilling conducted by Phelps Dodge and Barrick Gold Corporation (8,317m), total 125,376 metres of drilling (135 drill holes).
In January 2013 the Company released a mineral resource update for Los Calatos based on the drilling results of Phases 1, 2, 3 and 4, and the identification of a preferred mining scenario (small open pit operation followed by a large underground bulk mining operation) by NCL Ingenieria y Construccion Ltda (NCL). This was superceded by a further mineral resource estimate (February 2013) in support of a Mining Scoping Study completed on the preferred mining scenario by NCL. In August 2013, RungePincockMinarco (RPM) completed a Mine Production Study on the preferred mining scenario (Optimised L3_Model), which culminated in a revised mineral resource estimate of 493 million tonnes at a Cu grade of 0.38% and Mo grade of 0.023% (using a 0.15% CuEq cut-off) for those resources that are amenable to open pit mining to vertical depth of 700 metres below surface, and 926 million tonnes at a grade of 0.51% Cu and 0.022% Mo (using a 0.35% CuEq cut-off) for those resources that are amenable to undergound bulk mining below this depth.
The Company completed a detailed re-logging program of the Los Calatos diamond drill core in early 2015 aimed at better constraining, and quantifying, the high grade Cu and Mo zones developed within the Los Calatos Porphyry Complex, which was followed by the completion of a detailed geological model and revised mineral resource estimate. SRK Consulting (Chile) S.A. completed the mineral resource estimate in accordance with the guidelines of the JORC Code (2012 Edition) in June 2015, which totals 352 million tonnes at 0.76% Cu and 318 ppm at a 0.50% Cu cut-off grade, inclusive of all mineral resource categories. With the completion of a new 3D Block Model in support of the mineral resource estimate, RPM were requested to complete a Strategic Mining Study on the Los Calatos deposit, using as its reference base the updated 3D Block Model. A key scope in this regard was to evaluate the project as a high grade, low tonnage, operation that could deliver approximately 50,000 tonnes of copper in concentrate per annum at a milling rate of 6.0 to 6.5 Mtpa. This work was completed in August 2015, following the evaluation of three case studies.
Metminco's other projects are located in Chile to the north of Santiago, as indicated in Figure 2. Exploration programs, which largely involved in-fill drilling, were completed at the Mollacas and Vallecillo projects in early 2012.
Figure 2: Location of Metminco's projects in Chile.
In July 2012, the Company announced an updated mineral resource estimate for the Mollacas Project of 15.5 million tonnes at a Cu grade of 0.51% (using a 0.2% Cu cut-off grade), which is amenable to leaching (Copper Leach Project). The total leachable contained copper is 79,111 tonnes, of which 61,650 tonnes is soluble. Following the conclusion of additional metallurgical testwork, as well as revised operating and capital cost estimates, the Company updated a prior Scoping Study (completed by SRK Consulting [Chile] S.A. in 2008) in March 2014, the results of which support the robust economic nature of the project as an open pit, heap leach, solvent extraction - electrowinning operation. Given these encouraging results, it was disappointing that in late March 2014, the IV Region Court of Appeal overturned a 2011 judgement by the First Court of Ovalle which had granted the Company the right to mine the Mollacas deposit. The Company is rigorously contesting this judgement through the Supreme Court of Chile.
The in-fill drill program completed at the Vallecillo Project (La Colorada deposit) in 2012 has, in conjunction with the prior drilling results, formed the basis of the current geological model for the La Colorada deposit. In reviewing the geological model, and the associated style of mineralisation, it became clear that further refinement of the model was required, which necessitated the sampling of previously un-sampled zones, and additional geological analysis of the drill core. In October 2012 SRK Consulting (Chile) S.A. completed a further mineral resource estimate comprising 8.86 million tonnes at a Au grade of 0.80g/t, Ag grade of 9.94g/t, Zn grade of 1.01%, Cu grade of 0.07% and Pb grade of 0.32% (using a 0.2g/t Au cut-off). A Preliminary Economic Assessment of the project in 2013 indicated that additional mineral resources need to be identified to develop an economically viable mining operation.
Metminco's other project, namely the Loica Project, is regarded as an early stage exploration project, where limited exploration work has served to identify anomalous occurrences of copper and molybdenum, that have yet to be assessed by follow-up geophysical and drilling programs.