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Introduction & History
Tiomin has earned a 49% interest in the Pukaqaqa copper-gold project located on a 3,150 hectare (31.5 square km) land package situated some 15km northwest of Huancavelica and 230 km southeast of Lima. Mineralization on the property was first discovered by Rio Tinto in 1996. Tiomin encountered the property in 1998 when Pangea Goldfields and Rio Tinto were jointly exploring the adjacent Huancavelica property. By 2000, Rio Tinto had spent approximately US$7 million in an exploration program which included geological mapping, geochemistry, trenching, geophysics, 17,099 m of diamond drilling and metallurgical studies including flotation and leaching.
In October 2001, an LOU signed between Compania Minera Milpo S.A. ("Milpo") and Rio Tinto granted Milpo the possibility to acquire a 100% interest in the concessions within an original period of five years. Subsequently, in October 2004, Milpo and Tiomin signed a Joint Venture Agreement (JVA) which allowed Tiomin to acquire a 49% interest in the Rio Tinto concessions. Milpo, the project operator, is a Peruvian mining company with an excellent track record in the development and operation of low cost mines. A total of 39,533 m of drilling in 186 holes was completed in seven drilling campaigns by Rio Tinto or Milpo. Of this total, 182 holes totalling 39,145 m were diamond drill core holes (DDH) and four holes totalling 628 m were reverse circulation (RC) holes. This drillhole database serves as the basis of the mineral resources estimate prepared by Milpo.
Geology
Five zones of copper-gold mineralization have been defined: Gaby Breccia, Monica Breccia, Blanket Norte, Blanket Sur, and Raurac Breccia. The Blanket Norte and the Blanket Sur zones are essentially flat-lying mineralized skarn deposits that are flanked to the east by the steeply dipping Gaby Breccia and Monica Breccia zones and to the west by the Raurac Breccia zone. The blankets are sub-horizontal and contain irregularly disseminated copper mineralization. The Breccias are composed of sulphide rich zones along the steeping inclined to vertical portions of the marble/intrusive contact.
The results from the infill drilling program indicate that both the Blanket Norte and the Gaby Breccia have substantial variability in grade and volume. The Blanket Norte is now wider than initially interpreted towards the southwest but has decreased in width towards the northwest. A relatively higher grade Breccia zone joins the Northern and Southern Blanket deposits, extending for200 m with a width ranging from 50 m to 100 m to a depth
of 170 m.
Mineral Resources Estimation
Based on the exploration data gathered, Milpo prepared a mineral resources estimate using geological and resources modelling features from MineSight. The mineral resources estimate was done using industry standards methodologies and conforms to the requirement set out in CIM Definition Standards and National Instrument 43-101. The geological resources for the Blanket, Breccia and Raurac have been estimated, using a cut-off of 0.3% Cu, at 99,147,000 tonnes(t) at 0.56 % Cu in the Measured and Indicated categories and 58,662,000 t, at 0.60 % Cu in the Inferred category. Tiomin released its latest resource estimate on October 25, 2007.
Pukaqaqa Mineral Resource Estimate (100 % basis)
| Category |
Cutoff
(% Cu) |
tonnes ('000) |
% Cu |
g/t Au |
'000 lbs Cu |
Au ‘000 ozs |
| Measured |
|
|
0.3 |
2,793 |
0.62 |
0.08 |
38,176 |
7.1 |
|
0.4 |
2,190 |
0.70 |
0.09 |
33,796 |
6.3 |
| Indicated |
|
|
0.3 |
96,355 |
0.55 |
0.09 |
1,168,333 |
278.8 |
|
0.4 |
62,867 |
0.66 |
0.10 |
914,737 |
202.1 |
| Measured + Indicated |
|
|
0.3 |
99,147 |
0.56 |
0.09 |
1,224,045 |
286.9 |
|
0.4 |
65,056 |
0.67 |
0.10 |
960,930 |
209.1 |
| Inferred |
|
|
0.3 |
58,662 |
0.60 |
0.11 |
775,957 |
207.4 |
|
0.4 |
39,014 |
0.73 |
0.13 |
627,874 |
163.0 |
The review of the geological information also provides strong confidence that good potential exists to increase the resources in the extensions of the Blanket zone which is a low-grade large-tonnage zone, but also in areas similar to the Breccia zone, which shows substantially higher copper grades.
Project Development
Preliminary metallurgical tests indicated that flotation appears to be the most suitable way to process the ore. The next step is to develop a model which will identify the different types of mineralized zones. This model will be linked to additional testwork in order to more accurately evaluate copper recovery.
Based on the latest resource and capital cost estimates, Milpo is currently conducting a scoping study to optimize the production rate of the operation and rate of return of the project. Preliminary indications are that a large scale open pit operation is favoured, which best suits the relatively large low grade resource in the blankets. The higher grade breccia zones will be targeted for development in the early years of the mine life.
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