Ocaña
Location - 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 | ||
| Year | $US | Shares |
| 0 | $387,272.72 | 0 |
| 1 | $322,727.26 | 200,000 |
| 2 | $451,818.18 | 300,000 |
| 3 | $516,363.65 | 500,000 |
| 4 | $580,909.09 | 1,000,000 |
| 5 | $15,490,909.09 | 6,500,000 |
| Total | $17,750,000.00 | 8,500,000 |
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.
Phase 1 Drill Results -- Indico drilled five holes totaling 2,195 metres on the Jimena target, completing Phase I. All drill holes intersected strong mineralization over significant thicknesses; intersections are shown in Table 1.
Table 1: Detailed Significant Drill Results
Drill Hole |
From (m) |
To (m) |
Interval |
CuEq (%)* |
Cu (%) |
Mo (ppm) |
Au (g/t) |
Ag (g/t) |
Mineral Zone |
|
OKA-001 130°/-70° |
2 |
46 |
44 |
0.824 |
0.734 |
105 |
0.032 |
1.3 |
oxide supergene |
46 |
192 |
146 |
0.308 |
0.232 |
97 |
0.022 |
1.1 |
hypogene |
|
192 |
447 |
255 |
0.217 |
0.153 |
98 |
0.014 |
0.6 |
hypogene |
|
447 |
697.8 |
250.8 |
0.126 |
0.094 |
44 |
0.009 |
0.4 |
hypogene |
|
OKA-002 120°/-70° |
4 |
24 |
20 |
0.776 |
0.183 |
742 |
0.254 |
3.6 |
oxide |
24 |
38 |
14 |
1.607 |
1.290 |
511 |
0.057 |
1.9 |
supergene |
|
38 |
150 |
112 |
0.334 |
0.209 |
136 |
0.057 |
1.5 |
hypogene |
|
150 |
406.3 |
256.3 |
0.211 |
0.154 |
71 |
0.015 |
0.9 |
hypogene |
|
| OKA-003 120°/-70° including |
2 |
150 |
148 |
0.285 |
0.134 |
98 |
0.132 |
0.6 |
hypogene |
150 |
321 |
171 |
0.536 |
0.322 |
111 |
0.187 |
2.2 |
hypogene |
|
219 |
270 |
51 |
0.706 |
0.424 |
187 |
0.206 |
3.8 |
hypogene |
|
321 |
403.3 |
82.3 |
0.219 |
0.125 |
145 |
0.020 |
0.7 |
hypogene |
|
| OKA-004 310°/-80° including |
57 |
356.7 |
299.7 |
0.318 |
0.253 |
70 |
0.027 |
1.1 |
hypogene |
300 |
356.7 |
56.7 |
0.449 |
0.368 |
89 |
0.030 |
1.5 |
hypogene |
|
OKA-005 235°/-70° |
63 |
84 |
21 |
0.669 |
0.605 |
73 |
0.018 |
1.4 |
mixed supergene |
84 |
216 |
132 |
0.340 |
0.270 |
72 |
0.023 |
1.7 |
hypogene |
|
216 |
276 |
60 |
0.210 |
0.164 |
42 |
0.020 |
1.0 |
Hypogene |
Porphyry copper-gold-molybdenum mineralization was intersected at surface and continues to depths of 400 metres or greater from surface. In addition to significant hypogene grades, there is also a shallow supergene zone with high copper grades. The upper portion of Hole OKA-001 grades 0.734% copper from 2 metres to 46 metres, hosted within an upper weathered zone, where mineralization mostly occurs as copper oxides. Similarly, hole OKA-002 intersected 14 metres of 1.29% copper as mostly chalcocite. Below the weathered (leached) and supergene zones, hypogene copper mineralization occurs as disseminated and blebby matrix-filling chalcopyrite within potassic-altered, phreatic breccias and adjacent dacite porphyry. Mineralization is less intense within phyllic-altered zones.
Hole OKA-004 ended in increasing copper grades, with the last 15 metres averaging 0.42% copper. This hole collared in 51 metres of overburden, then intersected a thin (<3 metre) leached zone before entering consistent primary mineralization to the end of the hole.
Hole OKA-005, drilled to the southwest from the farthest west platform, intersected 36 metres of overburden overlying 15 metres of leached rock, and 21 metres of mixed supergene mineralization with 0.67% CuEq. Below and to the southwest of this was 132 metres of primary running 0.34% CuEq, for a total of 153 metres grading 0.39% CuEq. The drill hole remained in mineralization (0.21% CuEq) to a depth of 276 metres, where the mineralization terminated on a faulted contact.
Phase 1 drilling indicates the mineralized system has dimensions of at least 840 metres east-west and 250 metres north-south. Phreatic breccia underlies most of this area and trends west-northwest and is continuous for more than 1 kilometre, over a width of at least 200 metres within the concession, and extending for about another 200 metres off the property to the north.
The occurrence of significant copper oxides beneath a leached surface horizon indicates there is potential for exotic copper deposits to have formed at the base of the deep gravel-filled valley adjacent to the Jimena target. Below is a schematic cross section through the Jimena and Waka Waka targets that helps illustrate this potential. Once the leached and supergene profiles are better understood, a calculation will be made as to how much copper may have leached from the system and if it is significant, exotic copper under the gravels will be targeted.
Going Forward - Indico is preparing a Phase 2 infill drilling program of about 4500 metres to test for higher-grade zones within this primary breccia target, as well as further delimit the southern and eastern edges of both primary and supergene mineralization. The drill hole spacing will be roughly 200 metres. When Phase 2 is completed, Indico should have sufficient data to estimate Inferred resources at Ocaña.