GSC Signs Cerro Negro Purchase Option Agreement
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
8 July 2024
Great Southern Copper plc
("GSC" or the "Company")
Great Southern Copper Signs Cerro Negro Purchase Option Agreement
Preparation for drilling in progress to extend historical high-grade Cu-Ag-Au deposit,
including multiple drill-ready targets
Great Southern Copper plc (LSE: GSCU), the company focused on copper-gold-lithium exploration in Chile, is pleased to announce that, following a four month due diligence period, it has finalised signing of the Purchase Option Agreement for the Cerro Negro exploitation concessions which includes the historical Mostaza Cu-Ag-Au Mine.
Highlights:
· Purchase Option Agreement finalised allowing the Company to acquire 100% ownership of the prospect
· Includes the historical Mostaza Cu-Ag-Au mine previously owned by Antofagasta Minerals
· 7 tabular bodies (lenses) of high-grade Cu-Ag-Au mineralisation identified to date
· An historical (1981) non-JORC mineral resource estimate for Lens 1 and 2 reported 190,600t of measured & indicated sulphide with grades of 1.2% Cu, 80 g/t Ag, and 0.45 g/t Au, plus an additional 63,000t of inferred sulphide resource at depth
· Historical drilling of 25 holes (1,024m) at Mostaza indicates mineralisation is open at depth and along strike. Only 14 holes reached target depth and deepest drilling was to only 92m
· Untested alteration-mineralisation traced at surface along strike for up to 4km
· Style and type of alteration and mineralisation is indicative of potential for porphyry copper type deposits
· Permitting process commenced by GSC for drilling authorisation
Next steps:
· GSC to commence drilling at the Mostaza Mine following completion of permitting approval process
· The Mostaza Mine and greater Cerro Negro prospect is a compelling exploration target with potential to:
o significantly expand on the known mineralisation inventory at the Mostaza mine both at depth and along strike
o test of the known "near-mine" lenses to define new mineral inventory
o identify new targets along the MFZ for preliminary testing
o find further evidence for and vectors towards porphyry-style mineralisation
Exploration programmes will employ geological mapping, geochemistry, geophysics, petrography and other appropriate techniques, with a view to defining targets for drill testing as soon as permitting allows.
Drilling plan
Historical drilling at Mostaza indicates that high-grade Cu-Ag-Au mineralisation is open in all directions. A resource definition programme targeting near-mine depth and strike extensions to the Mostaza mineralisation will be the Company's initial focus for drilling. Significantly, the results of GSC's recent due diligence mapping and rock-chip sampling suggests that the structure hosting the Mostaza deposit extends up to 4km to the south. However, outside of the immediate mine area this structure has not been drill-tested, so the potential for significant up-scaling of the mineral inventory along this trend will constitute the secondary exploration phase of the Mostaza drilling programme.
Further, our due diligence research suggests that the style of high-grade copper-silver-gold mineralisation seen at Mostaza is consistent with the upper high-sulphidation zones of porphyry copper type deposits. This is coincident with the location of the mine stratigraphically below the base of the extensive Colorado lithocap alteration zone which the Company is targeting regionally for porphyry copper deposits. The Company's drilling and exploration programmes at Mostaza and Cerro Negro will be designed with the aim of vectoring toward large-scale porphyry copper type deposits.
Sam Garrett, Chief Executive Officer of Great Southern Copper, said: "The signing of the Cerro Negro option agreement represents an important milestone for Great Southern Copper. We now have the option to become 100% owner of the historical Mostaza Mine with an existing mineral inventory that has been drill-tested and remains open for expansion in all directions.
"With the Mostaza deposit now in hand, we aim to commence drilling at the soonest opportunity targeting both extensions to the existing high-grade resource and upscaling the deposit to the south along the MFZ, as well as testing the potential for large-scale porphyry copper type mineralisation.
"Alongside the permitting process for drilling authorisation at Mostaza Mine, we are also progressing the permitting to commence drilling at Victoria and Aurelia, all of which sets GSC up for a busy and exciting period of exploration."
Cerro Negro prospect and geology:
On 22 February 2024, GSC announced the signing of a binding Letter of Intent ("LOI") with terms for the 100% acquisition of the Cerro Negro group of exploitation concessions1. Following a four-month technical and legal due diligence period, the Company has finalised the acquisition of the concessions with the signing of a Purchase Option Agreement. The Cerro Negro agreement gives GSC the option to acquire 100% of the mining rights to 83 ha of granted mining concessions that include the historical Mostaza Cu-Ag-Au mine.
Cerro Negro lies within the Company's Especularita project which is ideally located close to national infrastructure including main highways, powerlines, and towns. The project is situated 170km from the port city of Coquimbo, and 130km from Antofagasta Minerals' copper concentrate port at Los Vilos. The area lies at an elevation between 800 and 1200m and is accessible year-round (Figure 1).
The Especularita project is located within the north-south trending Cretaceous metallogenic belt that includes Teck's Carmen de Andacollo Cu-Au Mine 80km to the north, and Pucobre's El Espino Cu-Au development project 30km to the south. At Especularita this under-explored belt intersects with a northwest-trending corridor that controls the "Colorada" advanced argillic lithocap and extends to the Piuquénes porphyry Cu-Au deposit in Argentina.
The Cerro Negro prospect includes the historical Mostaza Mine (Plate 1) which consists of multiple elongated tabular bodies (or lenses or lodes) of high-grade Cu-Ag-Au mineralisation hosted within a north-south trending, west-dipping fault system known as the Mostaza Fault Zone (MFZ). Individual copper-rich lenses vary from >2-10m in width and >100m in length with mineralisation occurring as disseminations, veinlets and crackle networks of quartz and sulphides within intensely phyllic (quartz-sericite-clay) altered dykes, tuffisite and/or breccias which invade the MFZ. Petrology studies indicate the high-sulphidation style copper mineralisation is dominated by hypogene stromeyerite (copper-silver) and chalcocite, covellite, digenite, bornite, plus lesser chalcopyrite and pyrite.
The MFZ varies from several metres to tens of metres wide and forms a major regional feature visible over tens of kilometres. Hydrothermal alteration, mineralisation, and brecciation has been observed along the MFZ for up to 4km within GSC ground which represents a significant exploration target to potentially up-scale the known mine mineralisation (Plate 2, Figure 2). Untested copper mineralisation also extends up to 500-1000m to the east of the mine area and is recognised at surface as oxide copper associated with quartz and quartz-baryte veins and vein-breccias orientated sub-parallel to the main MFZ structure (Plate 3, Figure 2). Mapping and sampling is on-going in these areas to delineate targets for exploration drilling.
The geology of the Cerro Negro area (Figure 2) exhibits characteristics consistent with the upper parts of a porphyry-epithermal mineral system, including a felsic dome field and an extensive quartz-alunite advanced argillic blanket (lithocap) which is underlain by structurally controlled feeders of advanced argillic alteration zoning downward into the phyllic-altered Cu-Ag-Au mineralised lenses (Mostaza). The presence of mineralised tuffisites and breccias along the MFZ, some of them potentially phreatic in origin, further suggests an underlying porphyry intrusive as the source.
The Mostaza Cu-Ag-Au mine:
Mining of copper and silver from the Mostaza Mine is first reported in 1884 although there are no production records. In 1977, the mine was acquired by the Jeraldo Gold Mining Company which commenced mining of oxide and mixed copper ores from a small open pit at Lens 1 and from underground stopes at Lens 2, producing a reported total of 17,500 tonnes of ore with an average grade of 1.25% Cu, 77 g/t Ag, and 0.5 g/t Au.
From 1978 to 1981 Jeraldo Mining drilled 25 exploration holes (1,024m) to test the continuity of the mineralised lenses at depth. Most of the holes were angled at -70 degrees and the deepest hole was only 92 mts. Only 14 of the 25 holes reached their required depth to test the target mineralisation (Figure 3).
Drilling confirmed the depth extent of the lenses exposed in near-surface mining and returned encouraging intercepts of Cu, Ag and Au (Figure 4, 5). In 1981 Jeraldo used these drill results, together with underground sampling and interpreted cross-sections to calculate an internal non-JORC compliant mineral resource estimate for Lens 1 and Lens 2 (The 1981 Historical Mineral Resource Estimate - HMRE)2. Assuming a cut-off grade of 1.5% Cu they obtained the following results for sulphides (oxide and mixed resources are mined out and not shown);
|
1981 HMRE Category |
Metric Tonnes |
Cu % |
Ag g/t |
Au g/t |
|
Measured & Indicated Sulphide |
190,600 |
1.2 |
80 |
0.45 |
|
Inferred Sulphide |
63,000 |
na |
na |
na |
|
Total for Lens 1 and 2 |
253,600 |
|
|
|
Table 1: Extract from the 1981 Historical Mineral Resource Estimate by Jeraldo Mining. The resource calculation pre-dates the introduction of the JORC code and therefore is non-JORC compliant. Refer to Cautionary note.
In 1982 the Mostaza Mine was acquired by the Centinela Mining Company, a subsidiary of Antofagasta Minerals. Between 1982 and 1988 Centinela developed a new open pit on Lens 2 and mined mixed and sulphide ores for processing at their nearby Parral flotation plant until the company's focus shifted with the acquisition and of the Michilla and Los Pelambres deposits. Centinela production records are not available.
In 1983 Centinela produced an internal non-JORC compliant mineral resource estimate for Lens 2 only (The 1983 HMRE)3. Using a cut-off-grade of 1.5% Cu, the exercise gave the following results for the sulphides (oxide and mixed resources are mined out and not shown);
|
1983 HMRE Category |
Metric Tonnes |
Cu % |
Ag g/t |
Au g/t |
|
Total Measured Sulphide Lens 2 |
55,841 |
1.2 |
73.71 |
na |
Table 2: Extract from the 1983 Historical Mineral Resource Estimate by Centinela Mining. The resource calculation pre-dates the introduction of the JORC code and therefore is non-JORC compliant (Refer to Cautionary Note).
Mining at the Mostaza Mine ceased in 1988 and the property was later acquired by Boroquim S.A. in 2011. However, since that time the property has been dormant with no further exploration activity on the property being carried out since the 1980's drilling by Jeraldo Gold Mining Company.
Figure 1: Location of Cerro Negro prospect, Especularita Project, Chile.
Figure 2: Geology of the Cerro Negro prospect with rock chip geochemistry for copper (%). Internal "dashed" area defines the Mostaza Mine area (Figure 3). The Mostaza Fault Zone (MTZ) extends well south of the mine area and is untested by drilling to date.
Plate 1: The Mostaza Mine is currently inactive. Open-pit mining has exposed evidence of earlier underground workings. GSC aims to target its initial drilling beneath the old workings to expand the known mineral inventory to depth and along strike.
Plate 2: Quartz veining and vein-breccia with oxide copper outcropping within the Mostaza Fault Zone south of the Mostaza mine. These areas have not been drill-tested.
Plate 3: GSC Chief Geologist, David Hopper, mapping and sampling oxide mineralisation associated with quartz and quartz-baryte veins east of the Mostaza Mine. Note the abundance of copper oxide in this location. This area has not been drill tested.
Figure 3: Map of the Mostaza Mine area adapted from the 1981 Historical Mineral Resource Estimate, showing historical drill holes and geological cross-sections on the pre-mining topography. To date mining activity has only centred on Lenses 1 and 2, with minimal exploration and drilling outside of the mine area.
Figure 4: Long section of the Mostaza Mine adapted from the 1981 Historical Mineral Resource Estimate of Jeraldo Mining, showing Lens 1 and 2 and the cross-sections and polygons used for estimation. Mineral resource estimates are non-JORC. The results emphasise that the Mostaza Cu-Ag-Au mineralisation is open in all directions.
Figure 5: Geological cross-section S-00 adapted from the 1981 Historical Mineral Resource Estimate by Jeraldo Mining. Mineralisation remains open at depth beneath the historic drilling intersections. (GSCU has not been able to independently verify the historical channel sample or drill hole assay results).
Cautionary note on references to Resources:
The Company cautions that all references to "resources", "mineral resources", or "mineral resource estimates" in this RNS were calculated internally and reported prior to the implementation of the JORC code and therefore are non-JORC compliant. The Company advises that the resource categories used in the historical estimates, for example "measured, indicated, demonstrated and inferred", may not have the same meaning or degree of confidence as current JORC categories. Historical records indicate that the quoted non-JORC resources were calculated using the polygonal method based on underground sampling, 1024m of drilling in 25 holes, and geological cross-sections and level plans. GSC is presenting this information for historical context only and is not treating it as a current mineral resource estimate. The Company has not been able to independently verify the results of historical drilling or mine channel samples.
References:
1. RNS 0741E (22 February 2024): GSC expands Especularita Project with two new agreements.
2. 1981 Mineral Resource Estimate; Internal report by Jeraldo Gold Mining.
3. 1983 Mineral Resource Estimate; Internal report by Centinela Mining Company.
Enquiries:
|
Great Southern Copper plc |
|
|
Sam Garrett, Chief Executive Officer |
+44 (0) 20 4582 3500 |
|
|
|
|
SI Capital Limited |
|
|
Nick Emerson |
+44 (0) 1483 413500 |
|
|
|
|
Gracechurch Group |
|
|
Harry Chathli, Alexis Gore, Henry Gamble |
+44 (0) 20 4582 3500 |
Notes for Editors:
About Great Southern Copper
Great Southern Copper PLC is a UK-listed mineral exploration company focused on the discovery of copper-gold and lithium deposits in Chile. The Company has the option to acquire rights to 100% of two projects in the under-explored coastal belt of Chile that are prospective for large scale copper-gold deposits. In addition, the Company has the option to acquire rights to 100% of a lithium project located in the Salar de Atacama district of Chile. Chile is a globally significant mining jurisdiction being the world's largest copper producer and the second-largest producer of lithium.
The two, early-stage Cu-Au projects comprise the Especularita and San Lorenzo Projects, both located in the coastal metallogenic belt of Chile which hosts significant copper mines and deposits, including Teck's Carmen de Andacollo copper mine, and boasts excellent access to infrastructure such as roads, power and ports. Significant historical small-scale and artisanal workings for both copper and gold are readily evident in both exploration project areas.
The Company's Monti Lithium project is strategically located in the pre-Andean region of Salar de Atacama which is Chile's premier lithium-producing region with well-established lithium mining operations and infrastructure.
Great Southern Copper is strategically positioned to support the global market for copper and lithium - both critical battery metals in the clean energy transition around the world. The Company is actively engaged in exploration and evaluation work programmes targeting both large tonnage, low to medium grade Cu-Au and Li deposits as well as high-grade Cu-Au deposits.
Further information on the Company is available on the Company's website: https://gscplc.com
Competent Person Statement
The information in this announcement that relates to exploration results is based on and fairly represents information reviewed or compiled by Mr Sam Garrett, a Competent Person who is a Member of the Australian Institute of Geoscientists and a Fellow of the Society of Economic Geologists. Mr Garrett is the CEO and a shareholder of Great Southern Copper PLC. Mr Garrett has sufficient experience that is relevant to the styles of mineralisation and types of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Garrett has provided his prior written consent to the inclusion in this announcement of the matters based on information in the form and context in which it appears.
The Company confirms that it is not aware of any new information or data that materially affects the information included within the Prospectus dated 20 December 2021.
Forward Looking and Cautionary Statements
Some statements in this announcement regarding estimates or future events are forward-looking statements. They include indications of, and guidance on, future earnings, cash flow, costs and financial performance. Forward-looking statements include, but are not limited to, statements preceded by words such as "planned", "expected", "projected", "estimated", "may", "scheduled", "intends", "anticipates", "believes", "potential", "predict", "foresee", "proposed", "aim", "target", "opportunity", "could", "nominal", "conceptual" and similar expressions. Forward-looking statements, opinions and estimates included in this report are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward-looking statements are provided as a general guide only and should not be relied on as a guarantee of future performance. Forward-looking statements may be affected by a range of variables that could cause actual results to differ from estimated or anticipated results and may cause the Company's actual performance and financial results in future periods to materially differ from any projections of future performance or results expressed or implied by such forward-looking statements. So, there can be no assurance that actual outcomes will not materially differ from these forward-looking statements.
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