Luquman Shaheen, the CEO of Panoro Minerals (TSXV: PML; US-OTC: POROF), remains upbeat and optimistic about the prospects of the company’s Cotabambas copper–gold–silver–molybdenum project and Antilla copper–moly projects in Peru.
“2014 is going to be a transformational year,” Shaheen said in a Feb. 6 corporate presentation in Toronto. “Because our Cotabambas project has now reached a scale where it has demonstrated it is going to become the next key copper project, in what I will argue is the most important copper district in the most important copper-development country in the world.”
Cotabambas is in the Apurimac region, 50 km west of the city of Cuzco, in the prolific 300 km long Andahuaylas–Yauri porphyry copper–gold belt of southern Peru. This belt hosts several attractive deposits including Glencore Xstrata’s (LSE: GLEN) Tintaya copper mine and Antapaccay and Las Bambas copper projects.
Other notable copper projects include First Quantum Minerals’ (TSX: FM; LSE: FQM; US-OTC: FQVLF) Haquira, Hudbay Minerals’ (TSX: HBM; NYSE: HBM) Constancia and Southern Copper’s (NYSE: SCCO) Los Chancas.
The Vancouver-based firm bought a 100% interest in the Cotabambas project from an Antofagasta (ANTO-L) joint-venture company in 2007. Three years later, it reached an agreement with the local communities to initiate exploration activities along with diamond drilling. Since then, it has completed over 60,000 metres of drilling and substantially increased Cotabambas’ inferred resource from 90 million tonnes to 404 million tonnes in 2012. Last October, the junior bulked up that resource and moved part of it into the indicated category.
Using a copper-equivalent cut-off grade of 0.2%, Cotabambas has 117.1 million indicated tonnes grading 0.42% copper, 0.23 gram gold, 2.74 grams silver and 0.001% moly containing 1.1 billion lb. copper, 900,000 oz. gold, 10.3 million oz. silver and 3.3 million lb. moly. It has another 605.3 inferred tonnes of 0.31% copper, 0.17 gram gold, 2.33 grams silver and 0.002% moly averaging 4.1 billion lb. copper, 3.3 million oz. gold, 45.3 million oz. silver and 25.3 million lb. moly.
The project has a combined 5.2 billion lb. copper and is “approaching the scale of really a number of other mega copper projects in this key part of Peru,” Shaheen says. He adds that the gold and silver by-products bring up the average copper-equivalent grade, as well as provide a potential financing alternative down the road in the form of a precious-metal stream or royalty structure.
Along with the improvement in the resource, Shaheen says there are two other changes at Cotabambas. First, the company recently outlined a 100-million-tonne near-surface oxide zone, which provides Panoro an option to start Cotabambas as a small low-cost oxide operation before mining the high-grade sulphide pit. Second, Shaheen notes the stripping ratio has significantly declined from 3-to-1 to 1.3-to-1.
“If you put all that together it gives us good confidence that we are going to produce a preliminary economic assessment that is going to be very strong,” he says.
So far, metallurgical work on the sulphide component of the deposit shows it produces a “clean and high concentrate” grading 27% copper, 11.9 grams gold and 152 grams silver, without any arsenic or mercury and with low levels of lead and zinc, Shaheen adds. The preliminary economic assessment (PEA) is due out in July.
Concurrently, Panoro is working on completing a PEA at its nearby Antilla project by mid-year. The 7.5 sq. km property is 120 km southwest of Cotabambas.
A December 2013 resource estimate pegged Antilla’s indicated resource at 188.5 million tonnes grading 0.40% copper and 0.009% moly for 1.7 billion lb. copper and 36 million lb. moly. It has an inferred resource of 145.9 million tonnes averaging 0.28% copper and 0.009% moly for 0.9 billion lb. copper and 28 million lb. moly.
Panoro envisions Antilla as a 20,000-tonne-per-day open-pit operation and Cotabambas as a 60,000-tonne-per-day operation.
With $10 million in its treasury, Panoro has more than enough cash to finish the two PEAs and take it well into next year, Shaheen says.
The junior aims to release a bankable feasibility study for both projects by 2017.
Panoro recently closed at 31¢ per share and has a $63-million market cap.
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