News travels fast - Minesite (London)Minews Story
Date: February 18, 2005
Sonora Gold Finds That Its Copper Molybdenum Project Offers Increasing Potential.
When we last wrote about Canadian listed Sonora Gold back in November it was made quite clear that the junior had two distinct projects. The company was no longer simply focused on the Santa Gertrudis gold project in Mexico as three months earlier a surface access agreement had been reached with the landowner on the nearby San Enrique gold-copper-molybdenum project after seven long years of dispute with the previous operator. The long time it took to come to an agreement means that some investors may have put this project mentally on the back-burner and they are only gradually coming to appreciate that much has been achieved since then with what could be a company maker.
San Enrique is an anomaly 4kms in diameter which was first identified by Campbell Resources as a result of a regional soil geochemistry programme. Geological mapping, rock chip sampling and airborne geophysical coverage also took place but follow-up work was interrupted by the dispute. The project therefore remained dormant until Sonora picked it up in 2002 and the company is now making up for lost time. Since September a lot of exploration work has been carried out and at the beginning of January the company confirmed that the mineralization was very different from that of its Santa Gertrudis gold project which is only 6.5 kms to the north. The main production area at Santa Gertrudis is a Carlin-style epithermal gold deposit, whereas San Enrique is thought to be the only occurrence of porphyry style base metal mineralization encountered in this part of Mexico.
At the beginning of this month Sonora announced that it had received ore grade molybdenum -copper drill intervals from drilling at San Enrique. Most of the holes had elevated copper and molybdenum values and one of them, which was targeted at high values in a trench, returned 27.6 metres at 0.148% molybdenum, 0.308% copper and 6.7 g/t silver including 5.3 metres grading 0.454% Mo, 0.92% copper and 21.3% silver. The price of molybdenum, which is mostly used in the manufacture of stainless steel, rose from US$2.40 per pound in 2002 to US$21.50 /lb last November and Sonora is now using a conservative price of US$30/lb in its calculations. With China forecasting continuing growth in the years ahead there is no sign of demand lightening up any time soon.
In fact demand is expected to grow upwards of 6 per cent annually over the next few years with China, Chile and the United States making up for about three-quarters of global molybdenum output. Molybdenum is usually a by-product of copper mining and the world’s largest copper producers are wasting no time in cashing in. Sonora could join them if a mine proves economic at San Enrique. At the moment all that can be said is that it has the potential to host a low grade bulk tonnage copper-molybdenum ore deposit with associated precious metal credits. The probability is that the company will seek a joint venture partner and it is likely to be a major as polymetallic projects such as this cost a lot of money to develop as well as plenty of expertise. This would mean dilution of Sonora’s interest , but even so it could be worth many times the current market capitalisation of the company. Time will tell.
In the meantime drilling has continued on the Ontario gold zone which is a few kilometers south east of the past production area at Santa Gertrudis . Just a bit of history on this project. Previous operators Phelps Dodge and Campbell Resources produced some 540,000 oz of gold from 1991-2000. The last estimate gives a measured resource of 320,000 tonnes grading 2.27 g/t gold and an indicated resource of 1 million tonnes grading 1.9 g/t gold for a total of nearly 100,000 contained ounces. Another 6.9 million tonnes grading 1.7 g/t gold lie in the inferred section, but trenching and sampling at the bottom of two past producing pits, especially the Mirador pit, returned up to 10.7 g/t gold over 10.1 metres. It is here where the initial ore will be mined if operations are resumed at Santa Gertrudis.
Higher grade material will be key to this decision, so it is very encouraging that the latest results from an additional 32 holes from its short-hole percussion drill programme on the near-surface Ontario Zone include intercepts of 5 metres grading 28.46 g/t gold, another 5 metres at 15.14 g/t and 4 metres at 12.79 g/t. And plenty more of the holes graded in the 4 to 7 g/t range over similar intersections. Robert Sibhtorpe, the company’s chief oprating officer, points out that there are other zones in the area surrounding the Ontario Zone with relatively high grade gold values on surface known from work by the previous operators. These include Greta, La Gloria, Tracy and El Tigre. These will be explored further in 2005 to develop tonnages, which in conjunction with the known deposits in the Central area, will be compiled to form the basis for the production decision.