falcon23
10 years ago
Tahoe Pays $1.35 Billion for Gold Mine in Peru
Inca One's Peruvian Gold Factory Ramps Up Production
VANCOUVER, British Columbia, March 2, 2015 (GLOBE NEWSWIRE) -- By Financial Press
In the biggest gold take-over in 10 months, Tahoe Resources has agreed to buy Rio Alto's La Arena gold mine in Peru for C$1.35 billion. Peru's 'political discount' is evaporating and fortunes are being made in the Amazon jungle while the Bay Street analysts flutz with their calculators.
Peru is currently one of the world's top producers of gold, with substantial production coming from artisanal miners who now need government-permitted milling facilities to process their ore.
Inca One (TSX-V:I0) (OTC:INCAF) is a Canadian-based ore processing company with a gold milling facility in Peru servicing small-scale miners. Construction of Inca One's 100 tonne per day milling plant is complete. The company is generating cash as it ramps up to full capacity.
"We are currently processing up to 60 tons per day," states President and CEO Edward Kelly in an exclusive interview with Financial Press, "When you're dealing with high grade ore, operational protocols are critical to achieve high recoveries. We are still optimizing our mill. Currently recovery is at about 90%. A few percent here or there can make a big difference to the bottom line."
Kelly and his operations team are steadily increasing production to the 100 tonne per day target. Full production is anticipated by the end of Q1 to early Q2, 2015.
"We forecasted the ore grade would be about half an ounce per tonne," stated Kelly, "However the trucks are arriving at with an average grade of .9 of an ounce – which means a longer processing time. Higher grade equals higher profits so it's a nice problem to have."
Kelly wants Inca One to be known as the gold processing company that pays fairly and quickly.
"In our business, prompt payment is critical," confirms Kelly, "The Peruvian miners have labour intensive operations. They have a lot of people to pay – and their livelihood is tied up in an inventory of rocks. So we take the customer-service part of our business very seriously."
Last week Inca One had five customers show up at the same time with 20-tonne trucks loaded with ore. Kelly cites this as part of the teething process with the new facility.
"The five loaded trucks caused a bottleneck of ore at the cone crusher," explains Kelly, "And guess what? Miners are just like anyone else. They don't like lining up. So to avoid delaying the trucks, we upgraded our cone crusher."
At 60 tonnes per day Inca One is breaking even and starting to make money. But Kelly states that it is not in the company's DNA to tread water at 100 tonnes capacity. Inca One has formed an evaluation committee looking for expansion projects - including purchasing and upgrading existing gold mills and building new ones.
In the 34 days from December 3, 2014 to January 7, 2015 Inca One recovered 521 ounces of gold and 557 ounces of silver from 753 tonnes of material at its start-up operations at the Chala One plant. Total current value of the metal is $686,000. Kelly anticipates the next gold recovery will be about 50% higher.
"The biggest surprise is that Peru is such a straight forward place to do business," states Kelly, "We are in daily contact with regional and national authorities on a variety of issues including business expansion and permitting for a new tailings pond. The key to success is to have experienced trustworthy local people in place."
On February 18, 2015 Inca One announced an agreement to purchase 400 tonnes per month of ore with an anticipated grade of 30 grams per tonne gold from an additional mine in Peru. The company also closed a $500,000 financing to fund the purchase of mill feed materials for its Chala Plant. The financing was arranged by SC Strategy.
"The European and Swiss investors have been very pleased with the work performed by Inca One," stated SC Strategy CEO Bjorn Paffrath, "Our focus is on sustainable projects with sincere partners who deliver on their promises. Ed Kelly and his team have so far exceeded our expectations in every aspect."
"We will continue to add dollars to our balance sheet," stated Kelly, "But we are a growth company which means we require infusions of capital to fund expansion."
The new mining legislation in Peru has created a perfect storm of opportunity for Inca One. The company does not stake land, run seismic or drill. The risks are metallurgical, not geological – and therefore easier to control.
"The rules in Peru create something of a captive market for Inca One," confirms influential Gold Newsletter Publisher Brien Lundin in the summer 2014 issue.
Dynacor Mines also has a gold ore-processing business in Peru. Its plant has maximum capacity of 250 tonnes per day. Dynacor's share price has risen from .17 to $1.90 in the last 5 years – an increase of 1,100%. DNG'S current market cap is $68 million.
Inca One, with its 100-tonne per day capacity, is currently trading at .23 with a market cap of $15.7 million.
Legal Disclaimer/Disclosure: This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Financial Press makes no guarantee, representation or warranty and a fee has been paid for the production and distribution of this Report.
CONTACT: Kin Communications Inc.
1-866-684-6730
1-604-684-6730
falcon23
10 years ago
Inca One receives $1.5M (U.S.) in financing commitments
2015-02-26 08:33 ET - News Release
Mr. Edward Kelly reports
INCA ONE RECEIVES TOTAL COMMITMENTS OF US$1,500,000 IN DEBENTURE FINANCING
Inca One Gold Corp., further to its news release dated Feb. 18, 2015, has now received total commitments of $1.5-million (U.S.) in respect of its non-brokered private placement of units, which is $1-million (U.S.) above the initial $500,000 (U.S.) previously announced.
Closing of the first tranche of $1-million (U.S.), including the $500,000 (U.S.) previously announced, is expected to occur shortly. Closing of a second tranche of $500,000 (U.S.) is expected mid-March. Closing of the tranches is subject to approval of the TSX Venture Exchange.
The net proceeds of the debt financing will provide the company with additional funds for both future working capital and accretive expansion opportunities.
The financing
The debt financing will be for up to 60 units, with each unit comprising one debenture in the principal amount of $25,000 (U.S.), and 25,000 non-transferable warrants to purchase up to 25,000 shares of the company's common stock, exercisable for up to 12 months from closing at an exercise price of 25 cents. The holders of the debentures will be entitled to receive interest at the rate of 14 per cent per annum, calculated and paid quarterly in arrears. The term of the debentures is 12 months.
A finder's fee of 8 per cent of the gross proceeds of the debt financing will be payable in cash by the company to certain finders in accordance with exchange policies. The company will also issue to the finders that number of finders' warrants equal to 8 per cent of the proceeds of the debt financing, divided by the exercise price of 25 cents.
We seek Safe Harbor.
© 2015 Canjex Publishing Ltd. All rights reserved.
thomasp1
10 years ago
Small-Scale Mining is Big Business in Peru
VANCOUVER, BC / ACCESSWIRE / September 22, 2014 / Peru's gold industry is undergoing an exciting wave of development. Reforms in Peru have ignited a new gold rush that is spreading to other Latin American countries who are keen to follow in Peru's footsteps. The focus of the reform is on 'informal' mining whereby the government has opened up the gold market to companies with the right expertise to process mined materials. Foreign companies see the opportunity to establish a presence while the industry is just beginning to heat up.
But there is one mining junior worth watching out for - Inca One Gold Corp. (TSX.V: IO). Their share price doubled recently to $0.17 after achieving their first milestone of initial production and cash flow. Recently they attracted the expertise of mining expert Jamie Polar who formerly served as VP of mining colossus Barrick Gold Corp. (ABX:TSX, ABX:NYSE). Inca One is currently rapidly expanding its operations at Chala.
But what is the reform process that is giving rise to the gold rush?
Peru's Gold Ascension
Peru is the largest gold producer in Latin America today, having overtaken South Africa as the 5th biggest producer globally (Jan '14, see below) with an estimated 182 tonnes of gold produced in 2013. A key enticing feature of Peruvian gold mining success has been the availability of high-grade gold, involving low-tonnage and low CAPEX allowing companies to generate profit in the near term. This is something many exploration companies crave in the current market.
Inca One's best days are yet to come as Peru is still in the process of reforming the gold mining sector, trying to address illegal or small-scale mining. The government is also attempting to bring small-scale mining into legal business in order to tax effectively. It generates revenues of about US $3bn annually according to official figures, with over US $500m estimated tax lost to date because this activity has operated under the tax radar.
"The business of informal gold mining would be huge if we could effectively start collecting from this sector. On top of that they would work within environmental laws and meet their obligations to the taxpayers."
Minister for Energy and Mines, Jorge Merino Tafur, in La Republica
The Investment Opportunity
A rare opportunity has presented itself as the government attempts to bring a US $3bn revenue sector into the tax stream via the expertise of companies licensed to operate gold processing mills. Registered small-scale miners can bring their extracted materials to a licensed mill to have the materials processed. Foreign companies like Inca One are particularly set to gain as the right expertise is required to help organise, develop and mature a very lucrative industry for the country.
Inca One only started out in Peru in 2011 but has grown quickly in that time. Their gold milling facility at Chala is expanding to 100 TPD and is due by the end of Q4 2014. The company wants to achieve four mills running at 250 TPD to reach 1,000 TPD. The plan is to achieve 18,000-20,000 ounces of gold per year when they reach the 100 TPD mark.
Only a handful of other companies have made a name in Peru. Probably the largest name in the game is Dynacor (TSX: DNG.TO) which has been active in Peru through its subsidiaries since 1996 with nearly 20 years of experience in the local mining industry. They have significant exploration and mill processing presence. In terms of mill processing, they have a 250 TPD mill at Huanca, a 250 TPD gold and silver mill at Acari and are awaiting a permit for a 300-600 TPD mill at Chala TPD operation. Dynacor is viewed as a solid business model for gold processing in Peru.
Another name is Volcan Compañía Minera S.A.A. (STT: H3Z.SG), a Peruvian exploration and production company with main operations in Alpamarca, Animón, Cerro de Pasco, Chungar, Vinchos and Yauli. Volcan has advantages of being a domestic company with all the market knowledge that brings and has been involved in mining since it was founded in 1943.
The gold mining sector is clearly just beginning to heat up, with the country leading the way for other Latin American countries to bring small-scale mining into the legal business stream and to tax activity too. Dynacor found a viable model of investing and expanding in Peru but the market is wide open for newer companies to get a piece of the action. Inca One stands out because it has progressed from a 25 TPD operation to 100 TPD (due late 2014) in just a year, with bigger plans ahead. Importantly, they did so on schedule and on budget – a rollout that separates them from other ambitious juniors that can't go the distance. The doubling of their share price recently on the news of successful expansion confirms the broader appraisal of the company and the arrival of a talented veteran like Jamie Polar with experience at a mammoth like Barrick Gold shows that big business knows a good bet when they see one.
CansoSpaceMan
13 years ago
Inca One Commences Sustainability Program to support community on the Peruvian Gold-Copper Project
TSX-V: IO
VANCOUVER, Feb. 22, 2012 /CNW/ - INCA ONE RESOURCE CORP. (TSXV:IO) ("the Company" or "Inca One") is pleased to announce that it has commenced its Sustainability Program for the communities surrounding its Las Huaquillas Gold-Copper project in Peru.
The current Peruvian government promised a Social Inclusion Program during the most recent election cycle. As a result, the government of Peru now requires a Sustainability Program to be designed and implemented by the company exploring and developing natural resource assets prior to the issuance of social and drilling permits.
In order to meet these requirements and stay on track with the Company's established development timeline and goals, Inca One has partnered with Cooperative Agraria Santuario de la Frontera Ltd. located in Peru. The primary goal of the Sustainability Program is to provide education and training with four main components. The components include increasing coffee production, quality improvement, certification, and education.
The Sustainability Program Inca One has committed to will positively impact 800 families who own and operate a combined 1,237 hectares of coffee-growing farms in the area surrounding the Company's mineral resource project for the next three years. It will also train more than 1,200 individuals on maximizing coffee yield from their current operations, which will triple their current yield by the third year. The total increase in economic benefit due to higher coffee yields will be approximately US$1.5 million per year once the Sustainability Program has been fully implemented.
Furthermore, Inca One's Sustainability Program is focused on creating a high-impact socioeconomic program while mitigating direct costs to the Company. The Company has engaged local and national government organizations to both increase the impact of the initiative and defray the costs.
The local community relies heavily on coffee production as its primary economic activity. Inca One's President and CEO's past experience as a coffee industry executive will be helpful in completing the Sustainability Program and keeping direct costs incurred by Inca One at a minimum.
Edward Kelly, Inca One CEO, says, "The start of the Sustainability Program is another positive step forward for Inca One. The program is critical to maintaining the strong relationship we have with the local community and our future success in Peru. This program offers tremendous benefits to the Company and both direct and indirect stakeholders of our project."
With the implementation of the Sustainability Program now underway, Inca One believes that it has met the requirements of the government.
About Inca One Resources Corp.:
Inca One Resources Corp. is a publicly listed (TSX VENTURE:IO) mineral resource company focused on acquiring and advancing properties in the South American country of Peru.
Led by successful entrepreneur and business owner Edward Kelly, the team has built multiple successful business ventures in a number of different business sectors. The company has the option to acquire a 100% interest in the Las Huaquillas Gold-Copper project in Peru.
Previous exploration on the Project was executed by Cooperation Minero Peruano - Alemana (1988-1992) and Sulliden Gold Corporation Ltd. (TSX: SUE, "Sulliden") (1996 - 1999). The exploration consisted of surface geological, geochemical, and geophysical studies, 26 drill holes and 1200 meters of underground workings.
In 1998, Sulliden estimated a 500 meter section of the 2.2 km long Los Socavones Zone hosted an estimated geological resource of 6.57 million tonnes grading 2.09 g/t Au and 25.2 g/t Ag (equivalent to 443,000 ounces of gold and 5.3 million ounces of silver). The resource estimate is based on historical findings and is not NI 43-101 compliant.
The historical estimate used a cut-off of 1.5 g/t gold and remains open at depth and along strike. The historical resource estimate was based on data retrieved from 10 drill holes and 20 mineralized intercepts to a depth of 200 meters.
Inca One management believes the Company can obtain its Social and Drilling Permits in a timely and efficient manner based on the community support received to date and support from its property vendors.
After receiving Social and Drilling Permits, the Company's objective will be to develop shareholder value by upgrading the Las Huaquillas Gold-Copper Project's historical resource into an NI 43-101 compliant resource estimate.
The completion of an NI 43-101 compliant resource estimate will be followed by additional drilling to develop the project's full potential.
Note: The historic resource was calculated in 1998 and the Company has not completed the work necessary to have the historical estimate verified by a Qualified Person. The Company is not treating the estimate as a current NI 43-101 defined resource and the historical estimate should not be relied upon. The Project will require considerable future exploration which the Company intends to carry out in due course.
More information on the project and Inca one can be found on its web site at www.incaone.com.
On behalf of the Board,
INCA ONE RESOURCES CORP.
Edward Kelly
CEO & President
Statements in this press release regarding the Company which are not historical facts are "forward-looking statements" that involve risks and uncertainties. Such information can generally be identified by the use of forwarding-looking wording such as "may", "expect", "estimate", "anticipate", "intend", "believe" and "continue" or the negative thereof or similar variations. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties such as the risk that the closing may not occur for any reason. Actual results in each case could differ materially from those currently anticipated in such statements due to factors such as: (i) the inability of the parties to consummate the definitive letter agreement; (ii) fluctuation of mineral prices; (iii) a change in market conditions; (iv) the inability to produce the technical report for any reason whatsoever; and (v) the refusal of the Exchange to accept the proposed transaction for any reason whatsoever. Except as required by law, the Company does not intend to update any changes to such statements.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For more information contact the Company at:
Telephone: (604) 669-9788
Facsimile: (604) 669-9768
ir@incaone.com
www.incaone.com
Canada Newswire
February 22, 2012 - 9:30 AM EST
CansoSpaceMan
13 years ago
ON THE INCA ONE TRAIL IN PERU
I just returned from a trip through the amazing country of Peru. Its been a few years since I have had a chance to visit Lima and I was so impressed to see how the economy is thriving. The new construction and growth have been partially fuelled by a friendly approach to foreign investment and this can be a huge opportunity for the mining sector. Inca One Site
Throughout history the world has known of the wealth of gold in the countries mountains. The explorations for gold, silver and copper are in full swing and those companies astute enough to meet the challenge will reap great rewards. There are some challenges to doing business in Peru. The country is willing to work with new companies but does demand some key hurdles be dealt with before moving forward. As one analyst said to me,"in reality they seem to be asking to be treated with fairness and dignity. You can't fault them for that." This could be from a combination of some companies slick entry approach in the past with little regard for sustainability left behind for the communities effected by the exploration and mining. As well as witnessing environmental disasters in countries around the world due in part to fast track permitting. While in Lima I found a local newspaper stating "The government of Peru wants to push ahead with $50 billion in mining projects, saying they are crucial to stoke expansion in one of Latin America's fastest-growing economies."
Ed Kelly the CEO of Inca One knows how to approach the government with a solid plan that works closely with the communities so that their will be an economic benefit to everyone involved. While leaving the smallest ecological footprint on the land itself. CEO video interview.
San Ignacio is a small town in the north of Peru, just south of the border with Ecuador. After taking a small plane into the north there is still a long drive to get to this community that looks untouched for the past 50 years. The people do not have an easy life and the lure of wealth can blind even the most conservative person. As you drive into the mountains you can see evidence that the government is living up to its promise of better roads and the new pavement should extend all the way to Ecuador this year. This provides easy access to the Inca One property, the Las Huaquillas property in northern Peru is Inca One's principal asset. The project consists of 9 mineral concessions totaling 3,700 hectares in size. On May 2, 2011, the company entered into an option agreement with Rial Minera SAC and its founding shareholders, to acquire a 100% interest in the 37 km2 Huaquillas gold property, located in the Department of Cajamarca of Northern Peru. Historic drilling to date has identified the Los Socavones epithermal zone and two potentially large porphyry copper-gold zones (Cementerio and San Antonio).
The region is full of coffee growers and while hiking through the area you encounter families steeped in traditional coffee growing. The family pride in their crops and the simple life and pleasure of providing for their family on their terms. The current Peruvian government promised a Social Inclusion Program during the most recent election cycle. As a result, the government of Peru now requires a Sustainability Program to be designed and implemented by the company exploring and developing natural resource assets prior to the issuance of social and drilling permits. In order to meet these requirements and stay on track with the company's established development timeline and goals, Inca One has partnered with Cooperative Agraria Santuario de la Frontera Ltd. located in Peru.The primary goal of the Sustainability Program is to provide education and training with four main components, while the components include increasing coffee production, quality improvement, certification, and education.The Sustainability Program Inca One has committed to will positively impact 800 families who own and operate a combined 1,237 hectares of coffee-growing farms in the area surrounding the company's mineral resource project for the next three years. It will also train more than 1,200 individuals on maximizing coffee yield from their current operations, which will triple their current yield by the third year. The total increase in economic benefit due to higher coffee yields will be approximately US$1.5 million per year once the Sustainability Program has been fully implemented.
The Los Socavones zone is located at the eastern end of a northeast, 2.2-kilometre long, gold-bearing structure which has been tested via diamond drilling along a strike length of 1,000 metres and explored via underground workings along 400 metres of strike length and averaging 100 metres vertically. The deepest drill hole tested the heart of known mineralization approximately 200 metres below the surface. Using more than 20 mineralized intercepts, Sulliden calculated that the Los Socavones zone hosts a historic geological resource of 6.57 million tonnes grading 2.09 g/t Au and 25.2 g/t Ag (1.5 g/t cut-off), for 443,000 ounces of gold and 5.3 million ounces of silver (608,000 gold equivalent ounces), estimate over 500 metres of strike length.
The Cementerio porphyry system measures approximately 1.5 kilometres in diameter and is located immediately due south of the Los Socavones zone. Four holes were drilled, and the most significant intersection to date comes from drill hole LH97-04 that tested an induced polarization anomaly located on the edge of a strongly magnetic zone. This drill hole intersected 99.5 metres grading 0.47% Cu, 0.11 g/t Au and 4.5 g/t Ag and was still in the mineralized zone at the end of the hole.
Socavonesppb Au, and a discrete molybdenum soil anomaly also characterize the zone. Historic diamond drill hole LH97-17, which led to the discovery of this zone, was drilled to investigate the southern portion of the copper soil anomaly. Composed of quartz-magnetite-chalcopyrite-bornite veins and veinlets in a quartz diorite, the most significant mineralized intersection of this hole is 100.7 m grading 0.28% Cu, 0.38 g/t Au and 4.5 g/t Ag. The grades of the 21 metre-section are similar to average grades of the bulk of the world’s largest porphyry copper-gold deposits.
Excluding the porphyry zones, the Los Socavones zone alone might be able to demonstrate the potential for between 0.6 million and 4.6 million gold and gold equivalent silver ounces through future drilling, based on its historic resource estimate and assumed dip and strike length extensions within the current concession boundary.
The comparables I found show an average in-ground valuation of gold exploration companies of approximately US$48 per ounce and an average take-over value of approximately US$116 per ounce. Based on these metrics and assuming resource potential of between 0.6 and 4.6 million ounces of gold, I believe it is reasonable to estimate a share price potential of between Cdn$0.80 and Cdn$3.00 per share and a take-over price of between Cdn$2.00 and Cdn$7.00 per share. This is subject to the company receiving its social and drilling permits and raising sufficient capital for a significant drilling program.
Las Huaquillas lies within the Miocene Metallogenic Belt of central and northern Peru, which stretches over 900 kilometres along the western Cordillera and adjacent high plateau provinces. This belt is host to several economic gold epithermal and porphyry gold-copper deposits including the high-sulphidation Yanacocha gold mine. Las Huaquillas is located on or close to the trend of the Fruta Del Norte (FDN) fault extensions, which cross the border into Peru south of the FDN deposit. In the Ecuadorian portion of the belt, almost all mineral deposits and occurrences are located within a few kilometres of this prominent north-south fault zone and that pattern of discovery is expected to continue in Peru.
Modern exploration on the Ecuadorian side of the border has resulted in the discovery of multiple, significant and world-class gold and base metal-bearing districts, such as Kinross Gold Corp’s Fruta del Norte Gold deposit with an inferred resource of 13.6 million contained ounces of gold averaging 7.23 g/t gold.
I ran into Rodney Stevens,currently at Wolverton, who will be preparing a due diligence report on Inca One. Rodney has established a reputation for picking home-run stock picks, previously as an analyst at Salman Partners, and more recently Peninsula, headed by Sam Magid. Peninsula is renowned recently for its investments in Ventana Gold Corp. and Canaco Resources.
Rodney was good enough to answer some questions on the Inca One project:
TTD/ "Are there any similarities you see between Inca One and Ventana?"
RS/ "Like Ventana, Inca One has an initial high grade resource (although historic in the case of Inca One, and lower grade) and intends to drill off the full potential of the mineralization along strike and at depth (although Inca One has less mineral potential than Ventana)."
TTD/ "What do you think the mineralized potential is of the property?"
RS/ "Currently there is roughly 0.5M ozs at 2 g/t on 25% of the strike length of the property. If the full 2.2km projected strike length of the vein is mineralized, their might be potential for 4 million ounces. If 1/2 is mineralized, then maybe 2 million ounces. Although the mineralization is open at depth, the grade may be declining, possibly not economic at depth."
TTD/ "How would you value these ounces?"
RS/ "$40/oz in ground and $100/oz in a take-over scenario or take-over speculation scenario."
TTD/ "What are the major hurdles?"
RS/ "Currently the shares of Inca One are trading at a discount in the market because it does not have an active drilling program yet and the resources are historic and not 43-101 compliant (despite being drilled by Sulliden in the past). Currently the companies main challenge is receiving its social and drilling permits in a socially sensitive areas of coffee growers and a Mayor who is against mining. However, I have seen that Ed Kelly has made significant strides in drumming up community support and his past experience in the coffee industry does not hurt. I am confident that the company should receive its drilling and social permits within 4 to 6 months, which might shock the financial community."
The process is under way now for Inca One to get permits to drill and confirm what most already know, or at least suspect. The basin itself could host a multiple of Rodney's calculations if the full extent of the Fruta Del Norte extends this far. Its a long trek across the mountain range in the dark but unfortunately for me the rains caused some roads to halt traffic. This meant a nice brisk walk in the jungle with some flashlights. One of the local coffee farmers Martin was waiting along the path for my group to hike towards the tunnels. The caverns themselves were put in by a German company and extend over 1 km into the mountain. I was pretty excited to go through the tunnel system itself and see what I could of the structure itself. This excitement was doused when I noticed some had collapsed in to some degree and due to the time of day it wasn't safe to go in to deep in the dark. I also noticed the local spiders on the cave walls were the size of house cats. Some tunnels will need to be pumped out and word spread that a group was at the tunnels that day so we were quickly joined by former workers on the site. Oddly enough I was standing on an old road that had grown in but this showed how easy access would be to restore for advanced exploration.
*These calculations are based on many factors and you should draw your conclusion after conducting your own due diligence. Some comments in this report are merely my own opinion and I suggest you speak with an investment professional before investing in the markets. This may or may not meet your portfolio needs.
History
Sulliden became involved in the Las Huaquillas project after reviewing the results of work done between 1987 and 1992 by the Cooperación Minera Peruano-Alemana (CMPA). This six-year program resulted in the discovery of the Los Socavones gold-silver epithermal zone which was evaluated to have geological reserves of 2.6 million tonnes grading 2.69 g/t Au, 27.0 g/t Ag, 1.09% Zn, 0.34% Pb and 0.18% Cu (292,000 Au + AgEqAu ozs). Realizing the under-explored potential of this region and more specifically this property, Sulliden initiated the process of optioning the complete land package during the Summer 1996. An option agreement was signed in October 1996 and a US$5 million financing for the project was closed in November 1996.
General Geological Setting
Regionally, the property is located within an important assemblage of Mesozoic and Tertiary volcanic and intrusive rocks. With respect to metallurgy, the property lies in the Miocene Metallogenic Belt of central and northern Peru, which runs for several hundred kilometres along the western Cordillera. This belt has undergone several episodes of deformation and is defined by a large number of hydrothermal mineral deposits of different types that were formed between 6 million and 20 million years.
The belt is divided into two sub-belts. The western belt is named the Quiruvilca-Pierina Sub-Belt, and the eastern belt is called the Michiquillay-El Toro Sub-Belt. According to our interpretation, and taking into account recent discoveries made by other companies working in Peru and Ecuador, the Las Huaquillas property is located in the northern extension of the Michiquillay-El Toro Sub-Belt.
Locally, the property is situated within a major caldera characterized by a concentric and radial fracture pattern. The oldest rocks consist of intermediate volcanics belonging to the Jurassic Oyotún Formation, and were intruded by Cretaceous and Jurassic intrusions of dioritic to granodioritic composition. Approximately 50% of the property is covered by Pleistocene and Cretaceous sediments. During the course of our geological surveys, several conjugate fault systems were mapped. Movement along these faults is interpreted to be reverse, based on the juxtaposition of plutonic rocks over older volcanic rocks. Finally, a ring-dyke structure mapped in the Cementerio sector is indicative of the potential for porphyry mineralization in this sector.
The 1998 Sulliden historic resource estimate was based diamond drilling over a 500 metre section of the 2,200 metre long Los Socavones Zone hosts a geological resource of 6.57 million tonnes grading 2.09 g/t Au and 25.5 g/t Ag (608,000 AuEq ozs), which remains open at depth. This historic resource, based on 10 drill holes and 20 mineralized intercepts, was estimated to a depth of 200 metres. The average true width encountered to date is 20+ metres, with some intercepts more than 75 metres in true width. In the table on the following page, we show three scenarios for the resource potential of Los Socavones. The first scenario is based on the historic resource estimate, the second “base case” scenario assumes that ½ of the projected strike length of the zone is mineralized with depth extensions, and the third “Upside” scenario assumes that the all of the projected strike length of the zone is mineralized with further depth extensions. Although the “Upside” scenario may appear aggressive, it is not out of reach for the company to acquire concessions further along strike if the mineralization appears to extend beyond its concession boundaries.
Disclosure: I am invested in Inca One on the TSX-V.
CONTENT POSTED ON THIS BLOG DOES NOT CONSTITUTE A BUY OR SELL RECOMMENDATION. MANY OF THE COMPANIES PROFILED HERE I AM NOT INVESTED IN AND DO NOT INTEND TO INVEST IN. THESE ARE MERELY MY THOUGHTS ON MARKET CONDITIONS AND STOCK VALUATIONS. INVESTING IN THE STOCK MARKET CAN BE VERY RISKY AND YOU SHOULD ALWAYS CONSULT AN INVESTMENT PROFESSIONAL BEFORE MAKING ANY DECISIONS. ULTIMATELY YOU ARE RESPONSIBLE FOR CONDUCTING YOUR OWN DUE DILIGENCE AND PROTECTING YOUR MONEY.
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