The North Zone is interesting for many reasons. There are a number of different geological features here, some of which are visible at the surface and others not. Most of the exploration drill holes were advanced here starting in the early 1970s and continuing through the 1990s. So there are lots of historical data available to us. This area has higher grades than elsewhere the property thus far. The January press release from Oroco answered some uncertainty, confirmed what many of you were hoping for, and delivered additional nice surprises to the rest of us.
There’s a good aerial image on page 70 of the Santo Tomas technical report (“ST report”) from Oroco’s website showing the North Zone with the Western Fault and North Zone Footwall labeled. Figure 33 on page 95 of the ST report shows a plan view of the area with several longitudinal cross sections labeled p17 through p25. Subsequent pages in the report include many of these section views, showing the geology, drill holes and other interesting data. It’s really informative to look at each section view because you can see that most of the drill holes shown in views p18 through p23 extend some 200 – 400 m through mineralization and terminate in good Cu grade. In layman’s terms: There’s more Cu to be found by drilling deeper.
References to a “2009 Grade Shell” in both the ST report and in the January press release Figure 1 (look for the red polygon) refer to a spatial representation of the central part of the North Zone mineralization based upon all of the historical drilling with Cu > 30%. The Grade Shell wasn’t intended to represent the fully-mapped out resource.
There’s a good discussion on the importance of section view p20 on page 94 of the ST report. Without repeating the entire page, two things stuck out to me. “The apparent thinning of the Grade Shell south of STD23 is an artifact of drill holes terminating in good grade mineralization before being allowed to pass into the footwall...” and, “The core of the 2009 Grade Shell Cu > 0.30% on this section is comprised of long drill intersections of 0.44% to 0.67% Cu.” The vertical thickness of mineralization here is reported to be about 400 m.
Most of the historical drilling was advanced between the Western Fault and North Zone Footwall. STD-21 and STD-23, shown in section view p20, each terminated in good mineralization at 0.47% and 0.42% Cu respectively, and are located very close to the east side of the fault. But not very many drill holes were advanced west of the fault, and of the six that were, data from only two merit a mention in the “Table 8 Listing of Significant Cu Composite Intervals.”
Prior to the 3D-IP survey, I wondered why most of the historical North Zone drilling was located in the area between the fault and the footwall. Was there any significant amount of Cu west of the fault, or did it serve as some sort of geological barrier limit on the resource? The ST report speculated on page 121 that, “...the structural termination of the North Zone against the Western fault zone is somewhat uncertain due to sparse information for that fault from drilling and surface mapping.”
Section p20 appears again as Figure 2 in the January press release. From the IP data, we can see how highly-charged the subsurface is around STD-21 and STD-23. Figure 1 shows that it continues westward from the section p20 reference line by more than 500 m. This is what the press release is telling us with, “Notably the chargeability-high response extends westward of the Company's 3D geological model of the mineral deposit (the 2009 Gradeshell of Cu > 0.30%), under the concealing limestone cap of the Santo Tomas ridge.” The 2009 Grade Shell model did not go past the Western Fault.
Figure 1 from the January press release shows that the entire area within the 2009 Grade Shell is highly charged to the tune of 25.1 – 50.1 mV/V, and that it extends both east and west of the red polygon. The strong presumption is that the highly-charged geology to the west also holds similar Cu grade resource as within the 2009 Grade Shell. We won’t know with absolute certainty what the grades are and how much resource it holds until it the area had been drilled and the cores assayed.
I reviewed drill hole measurements for the six holes west of the fault, comparing them with other drill hole elevation data along section views p20 through p23 where good Cu grades were encountered. Three of them (STD-06, STD-25, and STD-26) likely did not go deep enough and one of them (STD-07) is the furthest northwest of all locations at the ST concession, and is possibly an outlier to the deposit. The remaining two (STD-29 and STD-40) are reasonably close to the fault, were included in Table 8, and appear to have reached sufficient depth to make contact with decent Cu grade. Historical drill hole measurements are all in Table 7 starting on page 88 of the ST report.
Without seeing additional cross section IP data views of the areas further west of the fault, it is difficult to precisely map the vertical depth thickness of the highly-charged mineralization there.
Based on historical drilling data, section views p20 through p22 in the ST report show that vertical mineralization thickness with good Cu grades runs between 200 – 400 m. STD-21 and STD-23, just on the east side of the fault, appear to each represent a mineralized Cu grade thickness of 200 m and 300 m respectively. STD-40, just on the west side of the fault, represents a mineralized Cu grade thickness of at least 144 m, but with a 35 m gap in continuity and terminating in good grade. STD-29, also west of the fault, represents a mineralized Cu grade thickness of 75 m with some continuity gaps, but it terminated into good grade as well. STD-09 is shown to be right on the fault; it encountered 107 m of mineralized Cu grade; but appears to have terminated in good grade ~ 0.41% Cu as well. So the mineralization is most likely deeper at all three of these locations. See Table 8 data on pages 90 - 92 and the section views in the ST report.
From this collection of historical drilling data close to the fault, I would conservatively estimate the vertical depth thickness of good grade mineralization at the fault to be at least 200 m. It could be even greater. From the limited available data, and that pesky problem of historical drill holes terminating in good Cu grades, we can’t be certain on a precise number. It likely varies in vertical thickness as one moves along the fault. The p20 section view of IP data in the press release (Figure 2) represents chargeability of 25.1 mV/V running 200 m of depth at STD-21. A lower value of 20 mV/V increases that vertical depth to 400 m at the STD-21 location.
From looking at the IP data in Figure 1 with chargeability of 25.1 – 50.1 mV/V (pink and dark orange colors), I estimate that the surface area external to and west of the 2009 Grade Shell / red polygon covers about 300,000 square meters. I wouldn’t write of the areas with chargeability at 20 mV/V (light orange color). Those areas could very well hold economically viable resource as well. I have no way of quantifying Cu content in those areas from available data. But to be conservative in the calculations below, I will use only the area to the west displayed with a chargeability range of 25.1 – 50.1 mV/V.
As one moves west of the fault location (“A”) and closer to the river, the mineralization may dip in elevation, become thinner or both. If we assume that it becomes thinner moving west where measured chargeability eventually drops to 15.8 mV/V (light orange color on figure 1), then let’s estimate conservatively a thickness of 100 m at that location (“B”).
200 m mineralization vertical thickness at Fault (A)
100 m mineralization vertical thickness further west (B) where chargeability ≥ 25.1 mV/V
400 m distance West to East (C)
750 m distance North to South (D)
300,000 square meters surface area
Volume = [(A+B)/2]*[(C)(D)] = 45 million cubic meters
An average bulk ore density conversion rate of 2.7 tonnes / cubic meter yields 121.5 million tonnes ore. Assuming an average grade of 0.45% Cu yields the following amount:
(121.5 Mt)(2,204.6 lbs/tonne)(0.0045) = 1,205 M lbs. Cu
Presented below is a range of average grades, deposit vertical thickness, and the corresponding Cu resource representing the potential additional North Zone resource to the west of the 2009 Grade Shell boundary. I estimated an initial 200 m vertical depth of deposit thickness at the fault and included additional columns of data for scenarios where that thickness might be as great as 225 m or as low as 150 m. All scenarios assume that it gradually tapers to a vertical thickness of 100 m at the furthest point west and closer to the river where the IP chargeability limit is at least 25.1 mV/V (dark orange color on Figure 1). You can scale the volume up or down, the grade, and the CuEq credit based on your judgement.
North Zone – West of Historical Grade Shell only
Cu resource estimate in millions of pounds
% Cu (150 m) (175 m) (200 m) (225 m)
0.50 1,116 1,228 1,339 1,451
0.45 1,004 1,105 1,205 1,306
0.40 892.9 982.1 1,071 1,161
0.35 781.3 859.4 937.5 1,016
This does not take into account areas where measured chargeability was less than 25.1 mV/V – which could very well hold additional economically viable Cu ore resource. This also does not take into account resource credit for other metals such as Au, Ag, and Mo.
The 2011 historical resource estimate pegged the North Zone at 280.5 Mt of measured and indicated higher grade ore (> 0.35% Cut), equating to 2,725.7 million pounds Cu. The average grade was estimated at 0.461% Cu measured and 0.429% indicated. You can see from the calculations above how the 3D-IP survey results have the potential to expand the project resource significantly. By including the area just west of the historical North Zone deposit, it can easily add a billion pounds of copper to the current 2.725 billion pound resource estimate.
After my last post on February 8, someone pointed out to me an error in my calculations. I had incorrectly assumed a bulk ore density of 2.265 tonnes / cubic meter, which is a bit lower than typically measured in copper mining projects. Vizcachitas, Chile (Los Andes Copper) calculates an average bulk density from their project ore samples of 2.589, while Alpala, Ecuador (Cornerstone Resources) varies between 2.770 – 2.892, depending upon grade. Based on those calculated values from their published 43-101 resource reports, I will assume an average bulk ore density of 2.7 on future calculations. Since I always want to correct any errors in what I post, the South Zone table from my earlier post has been corrected and inserted below, using a bulk ore density of 2.7 tonnes / cubic meter. This results in Cu values 19% greater than previously estimated.
I will turn my attention to analyzing the other portions of the North Zone and IP data. Future posts will include separate analyses of the area to the east and the grade shell at depth (spoiler alert: It appears to be deeper than that in the ST43-101.)
South Zone Table – East of Historical Drilled areas only
(Revised from February 8 post to correct bulk ore density to 2.7 tonnes/cubic meter)
Cu resource estimate in millions of pounds
% Cu (275 m) (300 m) (325 m)
0.50 4,420 4,821 5,223
0.45 3,978 4,339 4,701
0.40 3,536 3,857 4,179
0.35 3,094 3,375 3,656
0.30 2,652 2,893 3,134