In February 2010, Tiomin
Resources Inc. (‘Tiomin’), now Vaaldiam, converted its
49% contributing equity interest in the Pukaqaqa
copper-gold project in Peru into cash and, at
production, additional cash payments and a Net Smelter
Return royalty ('NSR'). The property is located
approximately 400 km SE of Lima in the province of
Huancavelica.
Under the terms of the agreement with its joint venture
partner, ñia Minera Milpo S.A. ('Milpo'), Tiomin
received US$7 million in cash and Vaaldiam will receive
a further US$4 million if the project reaches commercial
production and an additional US$4 million one year
later. In addition, Vaaldiam receives a 1%
NSR on all mineral production from the current property
package if the quarterly LME copper price averages
US$3/lb or less and a 2% NSR above US$3/lb. The NSR also
applies to any properties subsequently acquired by Milpo
within 15km of the boundaries of the existing property
package.
The Pukaqaqa deposit contains five zones of copper-gold
mineralization: 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.
Based on the exploration data
gathered, Milpo prepared a mineral resources estimate
using geological and resources modeling features from
MineSight. Met-Chem Canada Inc. completed an
independent audit of the resource and a Technical Report
in accordance with National Instrument 43-101 standards
in December 2007. The mineral resources for the
Blanket, Breccia and Raurac have been estimated at
99,147,000 tonnes at 0.56 % Cu in the measured and
indicated categories, , using a cut-off of 0.3% Cu and
58,662,000 tonnes at 0.60 % Cu in the inferred category.
In early 2008, Milpo acquired the
Tinyaccla property from Buenaventura, located within 3
km from the main deposit at Pukaqaqa. Under the
agreement Tiomin paid 49% of the acquisition cost in May
2008. Buenaventura explored the property extensively
and calculated a resource of 16 million tonnes at 0.76%
Cu and 0.17gpt Au (cut-off at 0.3% Cu) for the Bella Sol
deposit, located on the property. This resource is not
NI 43-101 compliant and is therefore not included in the
Pukaqaqa Mineral Resource mentioned above. Milpo
has delineated an exploration program for the Bella Sol
deposit and other targets on the property.
Peru hosts about 30% of the world’s copper resources and
is known for the large size of its deposits.
Pukaqaqa has the potential to grow substantially and
Milpo will be significantly motivated to develop the
project now that it has 100% of the equity. The
Pukaqaqa deposit, excluding the Bella Sol resource,
contains 2 billion pounds of copper and
500,000 ounces of gold and has the potential to become a
large scale copper/gold producer.
