Panoro Minerals has over a dozen properties in Peru, but is putting its resources into exploring and developing two projects in the country’s southeastern corner.
Its top priority is the 100%-owned Cotabambas copper-gold project, where it is completing a 24,400-metre program to double resources. Next in line is the Antilla copper-molybdenum project, which is ready for a resource update and scoping studies. Both projects are located within the Andahuaylas-Yauri belt.
The junior says Cotabambas will remain its main exploration focus in 2012 and 2013, with drilling to date extending mineralization beyond the limits of the previously established resource. The project is located 48 km southwest of Cuzco in the Apurimac region of southern Peru. Panoro says it’s nearing completion of the 24,400-metre program, which began in November 2010.
The latest drill highlights from Cotabambas, released in mid-April, returned 114.1 metres of supergene enriched mineralization grading 1.7% Cu, 1.2 g/t Au and 8 g/t Ag, including 28 metres of 2.93% Cu, 1.48 g/t Au and 13 g/t Ag.
Another notable intercept returned 122 metres of hypogene mineralization grading 0.54% Cu, grading 0.33 g/t Au and 4 g/t Ag.
In a statement, the company’s CEO Luquman Shaheen said he’s pleased that the ongoing exploration continues to define extensions to the high grade enriched supergene zone at the north and south side of the project’s main deposit, Ccalla. “The results also continue to help define the geologic model for the Ccalla deposit and identify opportunities for expanding the deposit,” he stated.
With the March 2012 closing of a $13.8-million private placement, Panoro has about $20 million in working capital and says it is well financed to expand the current drill program at Cotabambas to 30,000 metres. It plans to include step out and exploration drilling to keep growing the resource at both the Ccalla and Azulccaca deposits and infill drilling to upgrade inferred resources, as well as test promising exploration targets. The 30,000-metre program should wrap up by year end.
The first 24,400 metres of that program will be included in the resource estimate update, expected by July. That resource revision should double inferred resources of 2.1 billion lb CuEq to 4.2 billion lb, Mackie Research analyst Matt O’Keefe said in an April note. He has a speculative buy and a $1.20 target on the stock.
Cotabambas, a cluster of copper-gold porphyry deposits, is located 38 km north of Xstrata’s Las Bambas copper [project]. In 2007, Panoro completed an inferred resource estimate for the 9.9-km2 property based on historical data collected from previous operators Antofagasta and Vale. Using a 0.4% Cu grade, Ccalla hosts an inferred resource of 90 million tonnes grading 0.77% Cu and 0.42 g/t Au.
In late 2010 Panoro kicked off a 5,500-metre program at Cotabambas, which it temporarily suspended in June 2011 after drilling 2,800 metres. It then ran magnetic and induced polarization surveys on the property in October, and found the two zones on the project, Ccalla and Azulccaca, were not connected as previously thought. But instead the two were separate, 2 or 3 km long, northeasterly trending mineralized corridors.
With this in mind, Panoro resumed drilling at Cotabambas in August 2011 and encouraged with the results expanded the program to 24,400 metres.
The company’s second focus is its Antilla project, which is 140 km southwest of Cuzco and accessible through the main Cuzco to Nazca highway and an unpaved road to the small village of Antilla. The project sits 25 km southeast of Southern Copper’s Los Chancas [project], which is undergoing a feasibility study.
A 2009 resource estimate, pegged inferred resources for Antilla’s East Block area at 154.4 million tonnes grading 0.47% Cu and 0.009% Mo using a 0.25% Cu cut-off. This resource includes a higher grade zone of 70.4 million tonnes averaging 0.56% Cu and 0.011% Mo. Even if the project is envisioned as a 20,000-t/d open pit operation, the East Block would have a 21-year mine life with a 2.5 stripping ratio, says Panoro, adding the project is ready for a resource estimate update and scoping studies.
However, the downside is the project’s 100% ownership has been part of a dispute since 2010. The company is in an arbitration process confirming that it ended a joint venture with Centauro after the private Peruvian company failed to make payments to exercise its option to acquire 70% of Antilla. A ruling is expected soon.
Other projects near Panoro’s properties include Xstrata’s Antapaccay copper project and the Tintaya copper mine. The region also contains First Quantum Minerals' Haquira copper project and HudBay Minerals' Constancia copper project.
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