Focus Ventures adds phosphate project

Workers dig a trench at Focus Ventures and Stonegate Agricom's Mantaro phosphate project in Peru. Source: Focus VenturesWorkers dig a trench at Focus Ventures and Stonegate Agricom's Mantaro phosphate project in Peru. Source: Focus Ventures

Peru may be best known for its rich endowment of gold and silver deposits, but the South American nation could also become a player in producing phosphates, Focus Ventures (FCV-V) believes.

The Vancouver-based junior explorer is taking a 70% interest in Stonegate Agricom’s (ST-T) Mantaro phosphate deposit — one of a small number of phosphate deposits known in the Andes — that the two companies believe is one of the world’s largest undeveloped deposits of the mineral. 

“The Mantaro project has the potential to be a world-class deposit,” David Cass, president of Focus Ventures, said in an interview. “Its phosphate resource is already significant with the work that has been done on it so far, but it has the potential to become one of the biggest in the world.”  

The Mantaro property stretches across 26 hectares in Peru’s altiplano in the southern end of the historic Central Peru Mining District at an elevation of 3,600 to 4,000 metres. The deposit, 250 km east of Lima, is hosted in the Aramachay Formation, a Jurassic-aged sandstone-shale unit that extends for hundreds of kilometres along the length of the belt.

The moderately dipping marine sediment sequence at Mantaro has been folded and faulted in three parallel mineralized zones called the West, East and Far East zones. Each zone has been mapped on surface over a strike length of more than 20 km, with 66 km of phosphate-bearing units defined by surface mapping and trenching, averaging 25 km in width.

Stonegate completed a resource estimate on the project’s West zone in 2009 that defined measured and indicated resources of 39.5 million tonnes at an average grade of 10% phosphate (P2O5), and an inferred resource of 376.3 million tonnes grading 9% P2O5.

“The resource numbers have only been done on one of the three zones or units, so by defining, drilling and doing more work on the other two, you could put together a large phosphate deposit,” Cass says, adding that proving up phosphate deposits can be much faster than with metals because of the mineralization’s continuity.

“The thing about phosphates is that you can imagine them a little bit like coal,” he explains. “They are formed on the sea floor, and once you have a unit, it tends to go on for many kilometres. So unlike gold or other metals where to prove up a resource you have to drill on fairly close spacings, with phosphates, because of the continuity of the mineralization, it means that by trenching and drilling on even 500-metre spacings you can come up with a resource fairly quickly.”

Under the letter of intent signed with Stonegate, Focus has the option to take a 70% stake in the project by spending US$25 million over four years on exploration, permitting and drilling; completing a feasibility study; and updating the project’s measured and indicated resources.

In 2010, beneficiation studies at Mantaro concluded that both oxide and unoxidized phosphatic ores could be treated by conventional grinding and flotation techniques to produce a marketable phosphate concentrate of similar quality to phosphate rock in Morocco (about 30% P2O5). Focus estimates that Morocco controls a third of the world’s seaborne-traded phosphate rock that is sold on international markets.

In addition to Mantaro, Focus has two other phosphate properties in Peru and one in Colombia. Its Machay property lies 30 km north of Mantaro, while its Quebranta phosphate property lies south, about 30 km from the coast.

Focus acquired 100% of Machay in early 2011 by staking 27 concessions over the Aramachay Formation. It subsequently staked another four claims, bringing the company’s landholding there to 180 sq. km.

Mapping of one of the claims identified outcrops and float of phosphate-rich calcareous sandstone that showed widths of 15 to 20 metres, commonly containing visible pellets of francolite (a variety of the phosphorous mineral apatite). Sampling returned assays of up to 11.4% P2O5.  The phosphatic sandstone unit is shallowly dipping parallel to slope and could be amenable to low-cost strip mining. Exploration will focus on identifying the phosphatic unit by detailed mapping, soil geochemistry and trenching. Its claims cover about 50 km of strike of the Aramachay Formation.

Its 180 sq. km Quebranta property, meanwhile, was acquired through staking. Its geology is similar to Vale’s (VALE-N) Bayovar phosphate deposit to the north. The pelletal phosphate deposit is younger than Machay and hosted in Miocene-aged diatomitic limestones. Early stage sampling at Quebranta returned up to 16.5% P2O5.

In January, Focus signed an option agreement with a private company in Colombia to earn a 70% stake in the Luisa Maria phosphate property, where sampling has identified at least two high-grade phosphorite beds, with grades ranging from 7.9%  P2O5 to 29.2% P2O5. Ten samples averaged 19.4% P2O5. The property — 16.5 sq. km of titled mining concessions — is about a three-hour drive from the capital of Bogota. The property is hosted in a belt of Jurassic-Cretaceous sedimentary rocks that are 1,000 km in length.

Cass says the company is looking to acquire even more phosphate projects, and sees an opportunity in Andean South America to find more phosphate deposits, as well as demand for phosphates. “Chile, Peru, Colombia — these are all countries with strongly growing agricultural economies,” he says. “I’ve been in Peru since 1996, and fifteen years ago when I used to drive north of Lima up the coast, it would be all desert. Now there are large tracts of green with asparagus and other crops, and that’s all down to irrigation and fertilizers.”

The geologist, who spent 15 years at Anglo American (AAUKY-Q, AAL-L), including four years as the company’s senior geologist in Peru, notes that Focus is one of only 20 junior companies with phosphate projects in the world.

And in the Americas, with the exception of Brazil, there aren’t many major phosrock deposits, with the exception of Vale’s Bayovar deposit in northern Peru and the Mantaro project in central Peru, he says, adding that Central and South America account for less than about 2% of the world’s phosphate reserves.

“There is some phosphate production in Colombia, but it’s mainly artisanal miners and some small-scale production in Chile — so it’s an exciting commodity to be in because it’s producing something that benefits not only international, but also local markets.” 

Cass is bullish on the outlook for phosphorous — a key ingredient in fertilizer and an essential nutrient for plant life — and believes long-term growth in fertilizer consumption, irregular global distribution and lack of phosphate deposits and resources in Latin America will ensure steady demand for the mineral.

“The world will always be hungry, and there’s less agricultural land to go around,” Cass says. “As people get wealthier they want to eat better food, so it’s all about getting more produce out of the land via fertilizers.”

At presstime in Toronto, Focus Ventures was trading at 16¢ a share within a 52-week range of 9¢ to 26.5¢.

The company has 40 million shares outstanding (60 million fully diluted), and insiders own 12% of the issued shares (16% fully diluted). Minas Buenaventura (BVN-N) holds a 9.35% stake in the company.


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