Vancouver – Global Copper (GLQ-T, GOCPF-O) has landed Rio Tinto (RTP-N, RIO-L) as an option partner on its Taca Taca copper-gold deposit in Salta Province, northwestern Argentina.
The deal sees Rio Tinto paying US$80 million to Global within three years to exercise its option for 75% of the project. During the option period the major will also make staged payments to Global totaling US$3 million, complete 25,000 metres of drilling and cover all property maintenance costs.
Once vested, Rio Tinto will be responsible for the first US$120 million of project expenditures prior to Global being required to fund its proportional share. Additionally, Global can also elect to have the major cover its share of exploration, development and mine construction expenditures on a deferred carried basis.
Discovered in the 1960s, Taca Taca is an Andean-type porphyry copper-gold deposit that has seen past exploration by Falconbridge (now part of Xstrata (XSRAF-O, XTA-L)), South African mining house Gencor, BHP Billiton (BHP-N, BHP-L) predecessor BHP Minerals, Corriente Resources (CTQ-T, ETQ-X) as well as Rio Tinto. More than 24,000 metres of drilling in 156 holes has been completed on the property.
Based on BHP Minerals’ work, a non-NI43-101 compliant historic inferred resource estimate of 106 million tonnes at 0.66% copper and 0.13 gram gold per tonne has been reviewed using a 0.4% copper cut-off grade. Using a lower 0.2% copper cut-off the historic resource grows to 240 million inferred tonnes of 0.41% copper.
A 20-60 metre thick supergene enrichment zone consisting of chalcocite and covellite coatings on chalcopyrite and pyrite has been defined beneath a roughly 200-300 metre leached cap. Besides copper and gold, molybdenum mineralization has been identified on the project.
Global Copper acquired the project from Corriente Resources in 2005 for US$50,000 and 300,000 shares. There is a 1.5% net smelter return royalty on the property.
Besides Taca Taca, the company has also been advancing its flagship Relincho copper-molybdenum project in Region III, Chile. Additionally, in mid-2006 Global Copper optioned its San Jorge copper-gold project in Argentina to Coro Mining (COP-T).
“With our focus on the aggressive development of our core asset, Relincho, I believe that partnering with Rio Tinto brings the necessary technical expertise and financial commitment to advance Taca Taca towards mine development,” commented Global Copper president and CEO David Strang on the large commitment necessary at the project.