09:38 | Lima, Dec. 28 (ANDINA).
Vancouver-based Indico Resources has signed a non-binding letter of intent (LOI) with Qatar Mining for the development of the Ocaña copper project, located in Peru's southern Arequipa region.
Pursuant to the terms of the LOI, it is expected that Qatar Mining (QM) will own 51% of the joint venture company after completion of the initial earn in payment, with Indico owning the remaining 49%.
It is also expected that the board of directors of the JV Company will consist of five members, three of which will be appointed by QM and two of which will be nominees of Indico.
"We are extremely pleased to have Qatar Mining enter into a Letter of Intent with Indico Resources to potentially develop the Ocaña Cu-Au-Mo project," said Indico's CEO and President Robert Baxter. "Together with our major shareholder Stonehouse Constructions, we welcome the positive outcome of our discussions and negotiations that will allow us to develop the Ocaña project in a timely manner."
"The skill set of Stonehouse Constructions has been an important factor in Qatar Mining's decision to enter into discussions and negotiations on the Ocaña project. Stonehouse Director Carlos Ballon has taken a lead role in the discussions to date and deserves a special mention," he added.
The LOI is intended to serve as a basis for the negotiation and execution of a definitive joint venture agreement. The completion of the joint venture is subject to a number of customary conditions precedent, including completion of due diligence, as well as the approval of the TSX Venture Exchange and all other required regulatory, corporate and security holder approvals.
The Ocaña Property consists of 22 concessions covering 110.24 km2 and is located on the northwest extension of the Southern Peru Porphyry Copper Belt, a trend defined in part by the Toquepala, Quellaveco, Cuajone, and Cerro Verde Mines to the southeast.
Most recent exploration of the belt has resulted in discovery of the Zafranal copper-porphyry deposit, located approximately 75 km to the southeast of the Ocaña Property.
Indico has completed 6828m of drilling on the main Jimena porphyry target initially identified by remote sensing, mapping, and geochemical sampling in 2010. Drilling in late 2012 defined shallow, flat-lying supergene copper oxides and secondary copper sulphides.
This mineralization overlies higher-grade (>0.35% Cu & 0.1 g/t Au) hypogene Cu-Au mineralization, hosted by breccia and diorite, and open to the east, north, and at depth. The supergene mineralization is amenable to low-cost SX/EW heap-leach processing.
Highlights from the last drill campaign included hole OCA010, which intersected the highest-grade primary (hypogene) mineralization yet encountered. This hole assayed 300 metres of 0.49% copper and 0.17 g/t gold, and included 57 metres of 1.11% copper and 0.21 g/t gold. The hole ended at 300.5 metres within mineralization grading >0.3% copper.
A 4650m Phase 3 drill programme will infill drill the supergene soluble copper resource to allow for preliminary resource estimation, and define the eastern extent of the hypogene.
(END) INT/EEP
Published: 12/28/2013