Since the beginning of the year, prospect-generator Arena Minerals (TSXV: AN) — whose shares traded at only 17¢ at press time — has enticed two heavyweight players in the mining industry to sign option agreements on parts of its 1,492 sq. km Atacama copper property near Antofagasta, Chile.
In July, Japan Oil, Gas and Metals National Corp. (JOGMEC) signed an option agreement to acquire up to a 60% stake in 100 sq. km of the property by spending at least US$16 million in two stages over six years. The hectares under option are collectively referred to as the Baquedano NE project, and include three claim blocks — Carmen Alto, Pampa Union and Cerro Guacate Sur.
Under the deal, JOGMEC will pay US$630,000 to Sociedad Quimica y Minera de Chile (NYSE: SQM) — the underlying property owner — on behalf of Arena during the option period. JOGMEC will also make an initial US$125,000 payment to Arena.
The joint-venture partners announced earlier that JOGMEC would kick-off a US$2.7-million, 12,600-metre drill program for completion within the first term of the option agreement, or before July 26, 2016.
Chief executive officer William Randall was travelling and could not be reached for comment before press time, but Arena stated the 84 holes would be drilled an average 150 metres deep on 1.5 by 1.5 km centres, “to ensure the highest probability of intersecting the alteration halo of typical porphyry-hosted copper deposits.”
The company said in a press release that spacing was found “using sizes and geometries typical of deposits in the area, and in particular, the known characteristics of the Spence and Sierra Gorda copper deposits,” according to the press release statement. (BHP Billiton [NYSE: BHP; LSE: BLT] owns the open-pit Spence copper mine, and KGHM Polska Miedz controls the Sierra Gorda open-pit copper mine.)
Arena’s option deal with JOGMEC came after a similar arrangement with B2Gold (TSX: BTO; NYSE-MKT: BTG) in February. Under this agreement, B2Gold can acquire up to a 60% stake in the Pampa Paciencia and Cerro Barco properties by spending a minimum US$20.5 million over five years.
As in Arena’s deal with JOGMEC, B2Gold must also give US$630,000 to Sociedad Quimica y Minera de Chile (over five years), and pay US$2.5 million to Arena over three years.
Late last month B2Gold began drilling the claims, with an initial focus on the Pampa Paciencia target. Surface exploration has included detailed mapping, trenching and sampling. The program found a number of epithermal gold- and silver-bearing veins up to 2.8 km in strike. Results from the trenching included intersections of 5 metres grading 7.7 grams gold per tonne and 162.2 grams silver per tonne from one trench, and 2.7 metres of 2.9 grams gold and 43 grams silver, including 0.6 metre of 5.58 grams gold and 83.7 grams silver, from another trench. The two trenches were 600 metres apart.
Meanwhile, groundwork has begun at the Cerro Barco target, including mapping, sampling and more geophysics.
In addition to Arena’s flagship Atacama property, the junior also has the Pampas El Penon project, which is less than 1 km from Yamana Gold’s (TSX: YRI; NYSE: AUY; LSE: YAU) Agusta Victoria project.
Arena’s board of directors includes some mining heavyweights: Mark Eaton, the CEO of Belo Sun Mining (TSX: BSX), is chairman of the board, and other directors include Paul Matysek and Bruce Humphrey.
Matysek is president and CEO of Goldrock Mines, and previously served as CEO of Lithium One, Potash One and Energy Metals, while Humphrey is a former president and CEO of Desert Sun Mining and served as chief operating officer at Goldcorp (TSX: G; NYSE: GG) between 1998 and 2004.