Cobre Montana moves Chilean copper mountain
The acquisition of a new project led to a new focus and subsequent name change for this South America-focused base metals play.
Recently rebranded Cobre Montana (ASX: CXB) (formerly Midwinter Resources) has become the latest Australian exploration play to hang its shingle in South America.
The company made its move in May 2013, striking a farm-in agreement with Southern Hemisphere Resources (ASX: SUH) over the Mantos Grandes project in the province of Limari in Chile.
“We are shifting our focus to South America by choice, and we can certainly see the benefits in doing so,” Cobre Montana managing director Adrian Griffin told The Resources Roadhouse.
“The Chilean Government earns a lot of money from the copper mining industry, which enables it to subsidise small operators, creating unparalleled opportunities for companies producing less than 12,000 tonnes of copper per year.
“Those opportunities include waiver of royalties and the use of government toll treating facilities.”
The Mantos Grande project comprises a number of mineralised occurrences dominated by skarn hosted copper/gold deposits, of which the Mantos Grandes deposit is the most prominent.
Other mineralised occurrences have been identified within the project area including: La Demonia (mine development circa 1935) El Durazno (skarn) Agua del Minera (skarn) Verde (porphyry copper) Pórfido Diorítico (porphyry copper).
“These deposits have not been extensively drilled, even though they have been mined in a haphazard fashion by prospectors chasing the high-grade skarns,” Griffin explained.
“We intend conducting is a systematic drilling program through the deposits, with work commencing in the field by the end of November.”
Griffin described the Mantos Grandes project as one that has flown well-under the radar for a long time.
The project does have a long mining history stretching back to 1935 then sporadically from the 1940s through to 1976, and then continuous through to 2001.
“The last mining campaign undertaken focused solely on the Mantos Grande deposit – and that deposit is one of seven within the project area,” Griffin said.
“Of the seven there are five that are skarn deposits and two are porphyry copper deposits.”
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The project hasn’t so much flown under the radar it has, for one reason or another, just not received the attention Cobre considers it has deserved in recent times.
Its ownership pedigree includes major company Rio Tinto, which acquired it as part of a deal with North Ltd.
North was a true believer in the project, which it joint ventured with the then owner in about 1999.
After making the owner an offer he could barely refuse, North ceased production to evaluate the larger potential offered by exploration within the project area.
North soon became victim of a hostile takeover from Rio, which had its eyes on the North’s iron ore assets as the main prize.
Rio ran its ruler over Mantos Grandes only to declare it to be too small for its consideration.
The next company to hold the project was Sundance Resources, which was introduced to it by Eduardo Valezuela, who is now chairman of Cobre Montana following a recent Board restructure.
Although the acquisition of the project buoyed its share price, Sundance was ultimately distracted by another iron ore project, which today remains its principal focus.
“It got bowled over by an iron ore deal with Rio, then by another iron ore deal with Sundance,” Griffin said.
“Eduardo found it all too hard to believe so he bought the project from Sundance and put it together in a package to form Southern Hemisphere and floated on the TSX.”
There was still one last hurdle for Mantos Grande, as Southern Hemisphere focused initially on manganese and farming out much of the grassroots base metal acreage it had.
“This one, geographically, didn’t fit into any of the packages they let go,” Griffin explained.
“We were looking for a project in Chile and Eduardo walked through my door one day and said, ‘I think I have what you are looking for’.”
Although considered too small by Rio, the Mantos Grande project is an exciting prospect for a junior company such as Cobre Montana.
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The prospective nature of the project is spelt out by the term ‘Mantos’, which in Chilean is a mining term for tabular ore lenses that shoot out from the sides of porphyry copper stratigraphy.
Griffin suggested Mantos Grandes roughly translates to mean, “A very bloody big one of those style of deposits!”
As exciting as Mantos Grandes may be, the announcement of a further acquisition has firmly entrenched Cobre Montana as a Chile-focused explorer/developer.
The company has optioned the acquisition of 65 per cent equity in the 2370 hectare Piedrecillas copper-silver project, located 180 kilometres southwest of Santiago.
Piedrecillas displays similar geological style to Mantos Grande and other manto-style deposits found elsewhere in the region.
Manto-style mineralisation has been proven to host significant copper deposits, such as the 200 million tonnes at 1.35 per cent copper El Soldado deposit operated by Anglo American.
Manto deposits are often higher in grade than, what are usually larger, porphyry deposits, due to high occurrences of bornite mineralisation.
There is a history of small-scale mining having taken place in the Piedrecillas area, albeit intermittently from 1940 to 1950.
No production records remain and there has been no more recent exploration of the tenure since this time.
Cobre Montana has identified three separate copper occurrences in the area, all of which, upon inspection, have shown mineralisation consisting of primary bornite and chalcopyrite, with secondary copper oxides.
Area 1
Demonstrates evidence of mineralisation consisting of malachite, azurite. Minor bornite is exposed at the base of diggings into a steep ridge.
Access is provided via a northeast-trending creek, which may represent a fault zone.
Shallow workings 300m up the creek line expose more small adits into the walls of the creek, with narrow vein mineralisation.
Area 2
Area 2 is located about 5km to the northeast of Area 1.
Mineralisation again appears to be structurally controlled within narrow, steep dipping shears in the host andesite.
Several small historic excavations mark the zone over a length of some 200m.
Area 3
In Area 3, copper oxides, including chalcocite, occur over at least a 200-m long zone with pervasive epidote-quartz-pyrite alteration.
The host rock is extensively altered, with the observed alteration and associated copper mineralisation occurring within a broad basin measuring some 2km across.
Griffin said the company was initially attracted to the Piedrecillas project by its extensive surface mineralisation, prospective geology, good location and evidence of past exploitation.
“Our plan is to develop a pipeline of copper/gold projects within Chile,” Griffin said.
“The historic Mantos Grandes gold/copper mine clearly has potential for early production, and other deposits, including deposits within the greater Mantos Grandes project area, will add longevity to the plan by building a strong resource base.
“The acquisition of Piedrecillas is the first step towards broadening our exploration base to achieve that outcome.
“Exploration around the areas of Past production at Mantos Grandes remains the priority target as it can potentially result in near-term production.
“It is envisaged that field work will commence in November, and will be run concurrently with reconnaissance exploration at Piedrecillas.”
Cobre Montana NL (ASX: CXB)
…The Short Story
HEAD OFFICE
Suite 3, 23 Belgravia Street
Belmont WA 6104
Ph: +61 8 6145 0288
Fax: +61 8 9475 0847
Email: info@cobremontana.com.au
Web: www.cobremontana.com.au
DIRECTORS
Eduardo Valenzuela, Adrian Griffin, Bryan Dixon
MAJOR SHAREHOLDERS
Wilgus Investments 4.93%
Citicorp Nominees 4.41%
Alan Jenks 4.4%
SHARES ON ISSUE
57.5 million
MARKET CAPITALISATION
$3.2 million (at 10/10/13)