THE INSIDE STORY: Actions, they say, speak louder than words and the recent actions of Peru-focused junior exploration play Laconia Resources Limited (ASX: LCR) has a few of the bigger industry players taking notice.
The attraction has come about due to the dual-focussed approach Laconia has taken with its Kimsa Orcco project in Peru.
While keeping one eye firmly focused on assembling a jigsaw puzzle of historic data into an impressive geological model, Laconia has trained its other eye on establishing close relationships with local communities and the Peruvian government.
The Kimsa Orcco project is the amalgamation of Laconia’s 100 per cent-owned Rasuhuilca project and the Huaco Cucho project, over which Laconia has an option to earn an 80 per cent indirect interest.
The Kimsa Orcco project consists of two large areas of alteration zones, which Laconia has identified as the Northern Kimsa Orcco prospects and the Southern Kimsa Orcco prospects.
All of Laconia’s Patacancha permits plus the 80 per cent Earn In Option Huaco Cucho permits No 1, No 2 and Once encompass the Southern Kimsa Orcco prospects.
The balance of the 80 per cent Earn In Option Huaco Cucho permits surround the Northern Kimsa Orcco prospects.
The project currently has an Inferred Mineral Resource estimate of 360,000 tonne at 1.97 grams per tonne gold and 179g/t silver at a 2.5g/t gold-equivalent cut-off.
When Laconia initially acquired the project in 2011 it knew it held potential to be a worthwhile silver-gold project. Stuart said ‘we always thought there was potential for a mineralised porphyry system driving the gold silver resource, and that was in our longer term thinking,
However, we didn’t expect the project would display such significant copper exploration scope and scale and so quickly
“The project was brought to our attention as a silver-gold project,” Laconia Resources managing director Ian Stuart told The Resources Roadhouse.
“However the more data that emerged and was included by our chief geologist, the more it began to evolve into a porphyry copper project, which has just got better with each lot of additional data.”
After it acquired the project, Laconia set about compiling a database of more than 3,000 channel samples from approximately five kilometres of underground development and adits, and more than 40 diamond drill holes, plus associated survey and assay data.
This systematic review of data highlighted the copper potential of the project area in addition to the project’s already developed existing gold-silver epithermal vein systems.
The review revealed a high fully-intact high-sulphidation copper-gold-silver system with strong potential for an underlying mineralised copper porphyry system or associated deposits.
The results Laconia has achieved haven’t gone unnoticed and the company has recently been kept busy answering knocks on its front door from a number of companies, some much larger and knocking louder than expected.
These unsolicited approaches from entities seeking to conduct due diligence on the Kimsa Orcco project led Laconia to create a virtual data room in late 2013, which allows interested parties to access its technical data under relevant confidentiality agreements.
The idea paid off very quickly with the company recently announcing it has entered into confidentiality agreements with a number of international copper-focussed groups, several of which have conducted sites visits to further evaluate the project and complete due diligence.
One of these site visits has moved to initial discussions on potential corporate activity.
“Due to the restraints of the confidentiality agreements we are unable, at this stage, to identify any of the companies that have demonstrated a very keen interest in what we are achieving at the Kimsa Orcco project,” Stuart said.
“However, what we can reveal is that the level of corporate interest and technical expertise of the interested parties strongly validates our geological assessment and belief that the Kimsa Orcco project has extremely large exploration potential.”
As important as assembling the data base has been to the progress of the project, Laconia has also been busy finalising the necessary Social Licence required for work to begin on the Kimsa Orcco.
Changes to the approvals process for the mineral exploration industry in Peru were effected in September 2011, which means exploration companies must obtain signed agreements from community groups before commencing exploration activities.
Earlier this year Laconia Resources reached agreement with the community of Tintay, the third of three community groups Laconia needed to consult in order to gain social licence within the immediate area of impact of Kimsa Orcco and the contiguous Huaco Cucho concessions.
The Tintay agreement followed community agreements and executed access and infrastructure agreements with the nearby Yanama and Huacana communities.
“Forging the final community agreement with the Tintay formalises Social Licence over the project area and enables us to move forward with our planned drilling campaign,” Stuart said.
“This has taken a lot of hard work, as well as a diligent and considered approach on our part, ensuring we have done everything correctly and in the best interest of all parties involved.
“Community issues are an important part of operating in Peru and after a lot of hard work we have delivered in that regard.”
The strategic nature of Laconia’s dual-focused approach is apparent with the formalising of the agreements with the community groups being just as important as the information the company has put together in the virtual data room to the company’s numerous suitors.
“Our approach to community agreements, gaining Social Licence and all permissions required to drill has without doubt, been of significant importance to the outside corporate interest we have been receiving,” Stuart continued.
Quickly on the heels of finalising its social licence, Laconia received formal permission to drill (Ordene Initio) at Kimsa Orcco by the Peruvian regulator, the Ministry of Energy and Mines (MINEM).
The company wasted no time in getting exploration activities underway, kicking off with sampling and geological mapping programs.
“We now have Social Licence, permission to drill, and we have also been granted a DIA [Declaración de Impacto Ambiental], which is an environmental statement,” Stuart said.
“These aren’t trivial matters, they are what the Peruvian government requires us to do and that’s what we have done.”
“Now what people should be asking is why have we bothered to do all that”?
“The reason is that we believe we have a quality project, which we consider to be worthwhile persevering with in, what many people say is, the toughest market they can recall.”
The Kimsa Orcco project is situated on the collapsed rim of the Ccarhuaraso strato-volcano within a highly-visible zone of secondary argillic alteration.
The company has used modern exploration technology and processes to become the first explorers to systematically collate all available information and construct three-dimensional models of mineralisation at Kimsa Orcco.
Laconia believes its work supports views of previous explorers, who compared the style and nature of the mineralisation at the Ccarhuarazo Epithermal System to the high-grade El Indio deposit in northern Chile.
With all permits and licences now in place the company’s future work will target the high-grade copper-gold-silver targets within buried intrusive stocks, as well as copper-gold-silver-zinc mineralisation in skarns surrounding buried intrusive stocks.
Laconia Resources Limited (ASX: LCR)
…The Short Story
Suite 2, Level 1, 47 Havelock Street
West Perth WA 6005
Ph: +61 8 9486 1599
Fax: +61 8 9486 7899
Matthew Howison – Chairman
Ian Stuart – Managing Director
Matthew Edmondson – Non-Executive Director
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