Discovery made in Peru — Juniors buoyed by “trespass” drilling

It isn’t often that a junior company is pleased when a major company trespasses on its property to drill a few holes.

But Nicholas Tintor, president of New Inca Gold (NIGL-C), says he is “extremely pleased” with results from three holes drilled by an Australian company on the junior’s El Molino property in Peru’s Yanacocha district. New Inca holds El Molino concession in a 50-50 joint-venture with Terrace Gold, a wholly owned subsidiary of Australian Kimberley Diamonds.

The trespass occurred when Australian-based North Limited was drilling neighboring El Galeno copper-gold porphyry discovery, a joint venture with Newmont Gold (NGC-N).

Results from that drilling showed that the mineralization from El Galeno extended onto El Molino. The best North hole on New Inca’s claims intersected 190 metres grading 0.45% copper, starting from surface. The interval from surface to 82 metres also assayed 0.17 gram gold per tonne.

“We’re very encouraged by the results,” Tintor says. “And we want to explore the potential of North’s El Galeno discovery on our side of the boundary.” He adds that, at first, North was less than enthusiastic about recognizing New Inca’s charge of trespassing. But all appears rosy now that North has made the results of its trespass drilling available to both New Inca and Terrace.

Tintor points out that, in 1995, North drilled four holes within 200 metres of the Molino property boundary. The best hole hit 167 metres of 0.67% copper with low-grade gold values. The Australian company optioned the project a year later and then launched a major drilling program.

According to a recent release by North, subsequent work at El Galeno outlined a deposit of 300 million tonnes grading 0.7% copper plus gold values, to a depth 200 metres, where the deposit remains open.

New Inca and Terrace note that North’s drilling has not yet tested El Molino’s other major exploration target, a 1-km-long alteration zone that returned values of 1.9 grams gold and 5 oz. silver in grab samples. This target is 1.5 km east of El Galeno.

Though recognized for its copper potential, Peru’s Yanacocha district is best known for its producing gold mines. Newmont is the largest producer in the region; its mines turned out more than 1 million oz. gold last year at a cash cost of US$95 per oz. The major also is advancing several exploration projects in the region, including the Minas Congas discovery, 11 km north of New Inca’s El Molino project. This gold-copper deposit is reported to contain more than 7 million oz. gold (262 million tonnes averaging 0.32% copper and 0.92 gram gold).

Immediately south of El Molino is the Michiquillay deposit, which hosts 544 million tonnes grading 0.69% copper and 0.2 gram gold.

New Inca, which has 10.5 million shares outstanding, also owns the San Luis gold project in central Chile.

Tintor says the junior intends to seek a partner for ongoing work at El Molino.