OcañaLocation - The Ocaña project lies along the northern extension of the Southern Peru Porphyry Copper Belt, in the districts of Yanaquihua and Chicas in the province of Condesuyos, Department of Arequipa of southern Peru. The 22 concessions under option held by Indico Resources cover 110 km2. The Toquepala, Quellaveco, Cuajone, and Cerro Verde Mines are on regional trend to the southeast. Recent exploration in the belt has also resulted in discovery of the Zafranal copper - molybdenum - gold porphyry deposit (NI 43-101 compliant Measured & Indicated resources of 301MT of 0.47% Cu, 0.08g/t Au), located approximately 75km to the southeast of the Ocaña Project.
Elevation ranges from 700m at the river to approximately 1,500m around the areas of current exploration.
Access - The Ocaña project is accessible by a graded dirt road along the east side of the Rio Ocoña via an 85 km dirt road and trail from the village of Ocoña. This dirt road is an extension of the paved Pan American Highway that runs from the village to Peru's second largest city of Arequipa located 220 km away from the village. The nearest permanent settlement to the concessions is the small village of La Barrera 24 km to the southwest, situated along the Rio Ocoña, which is populated by the informal miners currently mining distal gold veins immediately east of the Ocaña concessions.
Concessions - Indico's concessions cover an area of 110 km2. Two concessions held by Berteus Resources Peru S.A, totalling an area of 40 km2, known as Barreno 1 and Barreno 2, lie within the centre block of Indico Resources' 22 concessions as seen in the map below.
Terms of Agreement - The Ocaña property consists of 22 Mining Concessions owned by three Peruvian companies: Minera Andina de Exploraciones S.A.A., Mines Representaciones S.A.C. and S.M.R.L. Rosita No.1 de Arequipa. These companies have entered into a Mining Assignment and Option Agreement with Inversiones Minerals S.A.C. (IM) with a right to acquire a 100% interest in the Mining Concessions.
Indico Resources has the exclusive option to acquire all of the issued and outstanding shares of Inversiones Minerals S.A.C. with a cash and share payment agreement made over a 5 year period ending April 20, 2015. The total schedules of payments are listed below:
|Schedule of Property Option Payments|
There are no exploration expenditure commitments, no royalties, back-in rights and no finder's fee in connection with the transaction. Should the company wish to walk away from the deal part way into the agreement, the remaining balance will not be owed and no applicable termination payment.
Surface Exploration - The Ocaña property covers an area with widespread color alteration anomalies discernible from satellite images. These are typical of large porphyry copper-gold systems. Rock types, alteration and veining on the property are consistent with the porphyry model. The surface exploration work completed includes a ground geophysical survey (magnetic and induced polarization), detailed structural and alteration mapping, geochemical surveys (talus fines, rock and trench sampling), and interpretation of satellite imagery. This work has defined two primary targets, Jimena and Waka Waka, as well as a third exotic-copper target.
Satellite Imagery & Geochemistry - The high resolution satellite imagery over the Ocaña clearly shows the two areas of intense clay and iron alteration, which are typically associated with large porphyry systems. The 2010/2011 regional talus fine program returned highly anomalous copper and molybdenum values concentrated over these intensely altered areas. The largest anomalous area is the Jimena Target covering an area of approximately 1.5 km x 0.5 km, which is just the southern half of a 1.5 km X 2.5 km anomaly bisected by the concession boundary. The second anomalous area is the Waka Waka Target, covering an area of more than 1 km2 and located three kilometres east of Jimena. The larger Jimena Target was the focal point for the Phase 1 drill program completed in August 2011.
Drilling - Indico drilled five wide-spaced holes totaling 2195 metres in mid-2011 (Phase 1) on the Jimena target, successfully identifying a significant porphyry copper-molybdenum-gold deposit. All drill holes intersected strong mineralization over significant thicknesses and a follow-up Phase 2 programme was completed in late 2012. This second programme totaled 4733 metres and consisted of 19 holes drilled mostly within the area of the Phase 1 programme, with a few holes drilled to the south and to the east expanding the area of known mineralization. A summary of all significant intercepts is given in Table 1, and a list of drill collars is in Table 2.
The mineralized system has dimensions of at least 1000 metres east-west and up to 500 metres north-south. It comprises two targets of interest: 1) a shallow, flat-lying supergene blanket that is part copper oxide and part copper sulphide (chalcocite), and is amenable to low-cost, acid heap-leaching, based on sequential copper leach tests on core samples; and 2) higher grade copper-gold mineralization within the central and eastern portions of the breccia that underlies most of the mineralized area.
The Phase 2 programme tested the thickness and grade of sulphide and oxide supergene mineralization intersected by two holes in Phase 1, and this supergene resource is the current focus of exploration. The supergene target was successfully tested by five vertical holes along the crest of the southern ridge, two holes along the southern base of the ridge, and expanded into the centre of the system by three angled holes (OCA004, 5 & 6) and an additional vertical infill hole. Under the southern ridge, the supergene blanket is consistently approximately 50 metres thick, dips to the west subparallel to the ridge crest, and has an east-west dimension of over 700 metres, with a width over 200 metres at the west end, increasing to 400 metres on the east end. Under the central part of the system the blanket averages about 30-45 metres thick and thins to the east as the slope steepens. The blanket consists of copper oxide and sulphate minerals near the top, grading down into dominantly chalcocite at the base, where it transitions sharply to hypogene chalcopyrite mineralization.
The supergene mineralization will be the initial focus for resource definition, as preliminary laboratory test work confirms it is amenable to low-cost, acid heap-leaching. Most of the results for sequential copper leaching tests performed on core sample pulps have been received and are summarized in Table 3. The recoveries average about 80% for supergene mineralization averaging about 0.6% copper.
Hypogene copper-molybdenum-gold mineralization occurs mostly as fine-grained disseminated chalcopyrite within dacite porphyry and as disseminated and matrix-fill in phreatic/hydrothermal breccia intruding the dacite. The strongest copper-gold grades occur in the eastern portions of the west-northwest trending breccia, between holes OCA005 and 010. This breccia is continuous for more than 1 kilometre, with a width of at least 200 metres within the concession, and extending for about another 200 metres off the property to the north. The breccia comprises mostly fine diorite (diabase) fragments with dacite fragments increasing toward the contact with the main dacite host rock. A zone of significant gold mineralization (<0.1 g/t) and higher-than-average copper is associated with fine grained diorite and diorite breccia in the central and eastern portions. Outside the areas of significant diorite, where dacite porphyry is the host rock, the gold grades, and in some holes the copper grades, decline sharply, though molybdenum and silver grades are maintained. The highest copper grades are within strong potassic alteration with a weak to moderate quartz-sericite overprint. Examples of typical grades within this zone are OCA004, which intersected 264 metres of 0.36% copper and 0.15 g/t gold, including 39 metres of 0.69% copper and 0.20 g/t gold. Hole OCA005 intersected 111.5 metres of 0.5% Cu and 0.12 g/t gold, or 0.67% Cu Eq. Hole OCA010 intersected the highest-grade primary (hypogene) mineralization yet encountered within the diorite breccia: 300 metres of 0.48% copper and 0.17 g/t gold, or 0.69% CuEq, and including 57 metres of 1.12% copper and 0.21 g/t gold. The hole ended at 300.5 metres within mineralization grading >0.3% copper.
This high-grade mineralization will be drilled out in a future drill programme using a man-portable drill rig capable of being installed on the steep rocky slopes in this area. Mapping indicates the breccia extends for 200 metres east of the high-grade mineralization in hole OCA010. The current known extent of the copper-gold zone is approximately 500 metres east-west by 200 metres north south and truncated by the concession boundary; it is open at depth, but is drill-tested to extend at least 300 metres vertically.
Table 1: Detailed Significant Drill Results
|Hole||From (m)||To (m)||Interval||Cu%||Mo (ppm)||Au g/t||Ag g/t||CuEq||Zone|
Table 2. List of Drill Hole Collars
Table 3. Preliminary Sequential Copper Leach Results
|Hole||From (m)||To (m)||Interval||Total Cu%||Recov. %|