The juniors looking to replenish Peru’s copper pipeline
A lack of major development projects on the horizon after Quellaveco comes into production in 2022 has sharpened the spotlight on copper-focused juniors. If Peru is serious about making inroads into Chile’s lead as the world’s number one copper producer, the country will require more than just brownfield expansions, but significant greenfield discoveries moving rapidly through the exploration and development lifecycle.
Chakana Copper (TSXV: PERU) is currently advancing its Soledad project near Aija, in the Ancash region of the Miocene mineral belt, and achieved a critical milestone during the Covid lockdown in 2020 when it was awarded a permit to drill in the central part of the project area. When drilling recommenced in August, the company was able to make three new discoveries; at Paloma East, a small outcropping breccia pipe which gets bigger at depth; Paloma West, a high-grade breccia with a bigger footprint at surface; and Huancarama, a larger breccia complex with five principal pipes cropping out at surface.
David Kelley, Chakana’s president and CEO, explained that these breccias are like fingers on a hand, which, as your go deeper, coalesce into one larger Breccia body, and the ongoing scout drilling performed has confirmed that two of the breccias do coalesce at depth on the eastern half of the complex.
Elaborating on the type of mine he envisages at Soledad, Kelley commented that the scale of the mineralization at the Paloma area and the proximity of the breccia pipes, as well as Huancarama’s footprint, means that Chakana can start considering the potential for small-scale open-pit mining, which would lend itself to a staged capex approach before moving underground. He added: “This creates additional optionality, which is what mining engineers have always loved about this project. You can put different breccia pipes into production, or multiple zones within a pipe into production.”
In January 2021, Chakana announced a C$10 million private placement with Gold Fields increasing its ownership interest to 19.99%. In February, the South African gold producer transacted with another copper-focused junior, Regulus Resources (TSXV: REG), with Regulus signing an option agreement to further consolidate the land position around its AntaKori copper-gold project.
In a statement, CEO John Black pointed out that these claims allow Regulus to layback its current resource estimation pit further than it could previously, which should add resources that are already classified but not within the current constraints of the estimated resource pit.
The new kid on the block in Peru’s copper community is Element 29 Resources (TSXV: ECU), but the company brings with it a wealth of experience, including president and CEO Brian Booth, previous CEO of Pembrook Copper Corp. E29 was spun out of project generator GlobeTrotter Resources, taking two new assets to the market, the Elisa and Flor de Cobre projects, and putting them into a new shell before competing its IPO in December 2020.
Flor de Cobre is a copper porphyry located near Arequipa, close to Chapi and Cerro Verde, which until recently had been privately owned. The historic Candelaria resource on the project was drilled in the 1990s by Phelps Dodge, but not developed at the time because it needed to be 1% or better to be feasible as a leach project, according to Booth, who noted: “In today’s world, a 57 million ton resource at 0.67% copper, all above 200 meters (m) from surface, is very attractive.”
E29’s other project, Elida, a large property of just under 20,000 hectares located 170 km northwest of Lima, was drilled by Lundin Mining in 2015. Booth commented on what attracted his team to the project: “When you initially drill porphyries and want to see their significance, you need to see scale. Lundin drilled numerous holes that are 500 m to 600 m intersections at good grade copper molybdenum silver, which shows that there is potential for significant volume.”
Having raised C$6.7 million to further exploration and development in 2021, Booth outlined the company’s plans for the year, which include releasing a maiden resource at Elida, a new 43-101 report to modernize the historic resource at Flor de Cobre, and resource extension work around both. This will be followed by metallurgical work from the core at Flor de Cobre that will go towards a PEA.
The macro theme of a future fueled by copper is also making new management teams revisit old projects, as is the case for Camino Corp. (TSXV: COR), whose president and CEO, Jay Chmelauskas, was drawn to the company’s Los Chapitos project because of previous drill results from 2017 that indicated the potential scale and grade for a copper mine. Speaking of the company’s flagship Los Chapitos project, Chmelauskas noted that over 20,000 meters of drilling has already been conducted in a very specific area over the past four years, and Camino’s target for 2021 is to continue drilling along the 8 km extension of the Diva structure. “Subject to permitting, we will drill on other targets throughout our 220 km2 land package,” he added.
On March 30th, 2021, Camino announced the company had entered into an agreement with Denham Capital to acquire the Maria Cecilia porphyry complex in Peru, adding a third project to its portfolio. Chmelauskas pointed out that Denham, a US$10 billion resource-focused investment fund, “has the capability to fund larger transactions and is interested in both building and acquiring, so we intend to collaborate on future projects.”
New copper juniors to list in 2021
Ivan Bebek has been a busy man. Auryn Resources spun out three companies in 2020, resulting in the Quebec-focused Fury Gold Mines (TSX: FURY) listing in Q4 2020, Tier One Silver (TSXV: TSLV) listing in June 2021, and finally Sombrero Resources, which intends to list in the second half of 2021.
Sombrero will focus on copper and gold, with Bebek as its president and CEO, who clarified that the idea behind the spin offs was to give each project the attention and valuation it deserves, separating them by commodity focus.
Considering the Sombrero project sits on the western half of the Andahuaylas-Yauri belt on the same trend as Las Bambas, Tintaya and Antapaccay, why has it remained undeveloped?
“Sombrero was primarily overlooked because of a thin blanket of volcanic rocks that sits on the surface,” said Bebek, explaining that this layer of rock was identified in a government survey as Miocene age, which is not the prospective Eocene aged mineralization that hosts the mines to the west of Sombrero. “However, geologist Miguel Cardozo saw the potential through small erosional windows of outcrop that had limited rock sampling and returned high-grade copper and gold.”
After confirming that the age of the mineralization below the volcanic cover is in fact Eocene, the Sombrero team believes the Andahuaylas-Yauri belt extends over 200km west to where the project is located. “We have now taken over 5,000 samples, completed geophysics and some channel sampling, which returned up to 184 m of 0.57% CuEq,” detailed Bebek.
Forte Minerals Corp (formerly Forte Copper Corp) was formed in 2016, but decided to stay private while amalgamating assets. Patrick Elliot, Forte’s president and CEO, explained that this was to help preserve share capital and assemble a meaningful portfolio before going public and drill testing. Now the company intends to list on the CSE in July 2021, by way of IPO with Haywood Securities Inc., and plans to raise up to C$4 million to support exploration expenditures planned for 2021-22 on its porphyry copper and epithermal gold projects in Peru, revealed Elliot.
Like Element 29 Resources, Forte Minerals’ Esperanza and Pucarini assets are the fruits of a decade of generative work with GlobeTrotters Resource Group in Peru, where Elliot worked with Richard Osmond and Manuel Montoya, formerly of Teck Resources. Forte’s third property, Don Gregorio, is a JV with Candente Copper, and Elliot hopes to have received permits for at least two of his projects by Q4.
Describing the potential he sees in the assets, Elliot said: “Significant value growth is generated when early stage exploration moves towards resource definition, while zoning in on target development and eliminating the early-stage grassroots risk. All three of Forte’s properties offer this opportunity.”
He also pointed out that the alteration systems at Forte’s projects are large enough to be meaningful to move into a development phase if exploration success is achieved.
Image courtesy of Element 29 Resources