Freeport expands potential of Indonesian operations

Though they may be typical assays for the rich Grasberg deposit, the latest figures reported by Freeport-McMoRan Copper & Gold (NYSE) from its operations in Irian Jaya, New Guinea, would make any geologist’s mouth water.

Within Block A, the company has been delineating additional reserves at the Lembah Tembaga and Kucing Liar prospects, as well as additional, lower-grade mineralization within the Grasberg open pit.

The Lembah Tembaga now contains a geologic resource of 90-100 million tonnes grading 1.6% copper-equivalent. To date, 22 holes have been drilled at the prospect, with the latest results being as follows:

Hole Interval(m) Copper(%) Gold(g/t) Silver(g/t) LT 1-7 131.8 1.56 0.16 17.0 LT 3-6 466.2 1.03 0.65 4.0 LT 3-7 190.9 1.45 1.30 11.0 LT 4-5 7.1 0.92 0.29 13.0 LT 4-8 75.0 1.57 1.29 4.0 This high-grade mineralization was uncovered near the existing mill and above the Big Gossan exploration drift.

Meanwhile, drilling at the Kucing Liar prospect, a zone of high-grade skarn between the 2,500- and 3,000-metre levels, has intersected significant new mineralization. The company concentrated on this area on the theory that high-grade skarns surround the Grasberg intrusive where favorable host rocks are encountered.

Since May of this year, Freeport has drilled four additional holes at Kucing Liar, within the southern periphery of the Grasberg intrusive. Three of the holes were collared underground from the 3,700-metre level, one from the Amole adit and one from the surface. The results are as follows: Hole Interval(m) Copper(%) Gold(g/t)

GRS-37-196 36.0 1.75 1.21

GRS-37-198 166.5 1.64 0.91

A93-17-1 136.5 0.88 1.98

GRS-125 192.0 1.16 6.47

Based on these holes, and three others drilled previously, the company believes “a mantle of copper” exists around the Grasberg intrusive (at the 2,500-3,000-metre elevation) and that this mantle could well containing 200-350 million tonnes of mineralization grading 2% to 4% copper-equivalent.

Five diamond drill rigs — two at surface and three underground — are working to confirm the existence of this copper zone.

Both the Lembah Tembaga and Kucing Liar prospects can be mined through the Amole adit.

A feasibility study will determine which orebody or combination of orebodies — the Lembah Tembaga, Kucing Liar, Big Gossan, or another 400 million tonnes grading 0.8% copper from the Grasberg pit — will provide the millfeed for the best economic return for the planned expansion of the Grasberg operations.

Freeport and its new partner, RTZ (NYSE), plan to expand the Block A operations to between 175,000 and 200,000 tonnes per day. If the exploration proves successful, the operations could be further expanded to between 200,000 and 230,000 tonnes per day.

At the same time that all this activity has been occurring on the 24,700-acre Block A, Freeport’s geologists have been evaluating the much-larger (4.8-million-acre) Block B, as well as another 2.5 million acres held by Eastern Mining, another Freeport subsidiary.

Drilling in Block B has led to the discovery of a mineralized zone at the Wabu gold prospect. In the BO-50 zone, another 1-2 million oz. gold can be added to the previously reported figure, raising the total resource to 3-4 million oz., with the potential for more.

Recent assays from the Wabu prospect are as follows:

Hole Interval(m) Gold(g/t)

BO-50-2 18 6.40

54 4.18

9 6.68

BO-50-3 30 3.83

BO-64-1 93 4.98

BO-64-2 12 2.49

12 7.97

12 4.09

BO-64-3 39 3.74

12 3.96

36 3.50

BO-64-6 18 17.32

BO-65-3 18 5.11

The company will formulate mining plans when more is known of the potential of the resource. Meanwhile, the Hitalipa district (of which the Wabu is part) contains other magnetic and geochemical anomalies that require drilling.

And finally, within Eastern Mining’s work area, four drill rigs are evaluating the mineral potential of the Etna Bay copper district. So far, 34 holes have been drilled in the area, and follow-up geologic and surface sampling at the Wawa prospect is turning up significant values of the red metal.