Initial assays from the first drill program on the Warintza West zone at Solaris Resources’ (TSX: SLS; US-OTC: SLSSF) flagship Warintza project in Ecuador were “so exciting,” says President and CEO Daniel Earle, that the company doubled the number of drill rigs from six to 12 rigs.
“We made the new discovery with the very first hole of the program,” Earle said in an interview. “Not only that, but a detailed geophysical survey covering the entire project revealed a much larger porphyry mineralised system than previously recognised.”
The discovery drillhole at Warintza West, SLSW-01, intersected 798 metres grading 0.25% copper, 0.02% molybdenum, and 0.02 gram gold per tonne (0.31% copper-equivalent) starting from 32 metres, including 260 metres of 0.35% copper, 0.01% molybdenum, and 0.02 gram gold (0.42% copper equivalent).
Geophysics, which covered the entire 268 sq. km project, later revealed that the mineralisation cut in hole SLSW-01 is adjacent to a high-conductivity anomaly measuring 3.5 km long by one kilometre wide, and one kilometre deep that encompasses the Warintza Central, East, and West zones.
The new discovery at Warintza West, announced earlier this month, sits one kilometre west of Warintza Central and appears to be another large, open-pit copper discovery, Earle said. The geophysics shows that the two deposits are part of a cluster of porphyry deposits that span multiple kilometres to the east and south.
The project is situated 85 km east of Cuenca in a rural part of the Cordillera del Condor, an inland mountain range forming the border between Ecuador and Peru.
Separate, large-scale high-conductivities anomalies were also discovered at Warintza South, about 4 km southeast of Warintza West, and measured 2.3 km long, one kilometre wide, and 700 metres deep, and at Yawi measuring 2.8 km long, 700 metres wide, and 500 metres deep.
Drilling is concurrently running at both Warintza Central and Warintza West.
Earle joined Solaris in November 2019 from TD Securities, a leading investment bank, where he served as vice president and director. For over 12 years, he worked as an equity research analyst covering small to mid-cap precious metal and base metal companies.
“I could have spent the rest of my career at TD Securities, where I’d built up a reputation for being able to pick world-class projects at a very early stage in their development,” he said. “I saw the same potential in Solaris’ copper portfolio, especially Warintza, and that’s what drew me to the company.”
At the time, Equinox Gold (TSX: EQX; NYSE: EQX) owned Warintza.
In 2018, Equinox spun-out its copper assets into a newly incorporated company named Solaris Copper. In December 2019, the company changed its name to Solaris Resources to reflect the gold potential of its portfolio, the company said. Solaris joined the Augusta Group of companies in January 2020.
The group has a track record of value creation over the last decade, including $4.5 billion in exit transactions and a further $4 billion of value creation through investments, principally in Equinox, which the group founded in 2007.
The group was the “perfect partner to generate value for the copper assets, particularly Warintza, that were locked-up in Equinox’s portfolio,” Earle said.
The project is 40 km north of the Mirador mine, operated by Ecuacorriente, a subsidiary of the Chinese consortium CRCC-Tongguan, which started production in 2019 and is expected to produce 94,000 tonnes of copper concentrate per year. It is also adjacent to Explorcobres’ (previously called Corriente Resources) San Carlos-Panantza copper and gold mine.
Warintza was discovered in 2000 by the late David Lowell, a world-renowned geologist who made over a dozen major discoveries, including the largest copper mine in the world, La Escondida in Chile, which produced US$10 billion worth of copper last year.
But the project had remained dormant since 2001 following a breakdown in relationships with local indigenous communities, which saw it losing its social licence to operate.
In March 2020, Solaris and its subsidiary, Lowell Mineral Exploration Ecuador S.A., completed a pilot project to promote dialogue with the indigenous communities of Warints and Yawi of the Shuar Nation, on whose ancestral lands Warintza sits.
“Through this dialogue we were able to resolve conflicts that had resulted in the breakdown of the social licence and to agree on a framework for operating the project,” Earle said.
The company commenced the first-ever drill program on the property in August 2020 to expand the lateral footprint and depth extent of Warintza Central.
Highlights from the 40,000-metre drill program included drillhole SLS-01, which returned 567 metres grading 0.8% copper, 0.04% molybdenum, and 0.1 gram gold (1% copper-equivalent) starting from 1 metre downhole, including 446 metres of 0.88% copper, 0.04% molybdenum, 0.1 gram gold (1.09% copper equivalent) from 48 metres.
That same month, Solaris began an airborne geophysical survey of the entire project to refine targeting within the five-kilometre-long Warintza porphyry trend, including the interpreted high-grade core at Warintza Central and additional porphyry centres. Another objective of the survey was to define targets within a series of three multi-kilometre gold-in-soil anomalies identified by sampling undertaken northeast of Warintza in 2019.
The company added a second drill rig to its drill program, with a third added in November.
In early September, the company signed an Impacts and Benefits Agreement with the two indigenous communities. Solaris now employs 184 workers from the two communities, representing nearly full-employment for the communities, according to Earle. The company has also built community infrastructure, road access to the site, and power to the area, “dramatically improving the lives of the community and providing a strong social licence to operate,” he said.
In late September, the company continued to expand the mineralisation at Warintza Central. Drillholes SLS-02 intersected 660 metres of 0.79% copper, 0.03% molybdenum, 0.1 gram gold (0.97% copper equivalent) from surface and SLS-04 cut 1,004 metres of 0.59% copper, 0.03% molybdenum, 0.05 gram gold (0.71% copper equivalent) from surface.
“When you’re hitting copper mineralisation above 0.5% in kilometre-long intervals and mineralisation over 1% copper (the average for the industry is 0.4% copper), and you can demonstrate the potential to find similar mineralisation over kilometres along strike, then you know that you’re sitting on a unique opportunity,” Earle said.
In December, the company commenced drilling at Warintza West.
The company plans to drill up to 80,000 metres during the first half of the year, with drilling on Warintza East due to be completed in March, Warintza South in April, and Yawi by the middle of the year. Warintza South is about 4 km southeast of Warintza West. Warintza East is about 1.5 km from Warintza Central.
It also aims to release a mineral resource estimate for Warintza in the third quarter of the year and the first engineering and economic study by the end of the year or early in 2022.
Solaris has budgeted about US$40 million to cover this year’s activities, Earle said, and has over $90 million in the treasury. “We’re extremely well-funded to complete our plan of work this year and next year.”
The company also has a pipeline of grassroots projects that were initially put together by Lowell, including Tamarugo and Ricardo in Chile, Capricho and Paco Orco in Peru, and La Verde in Mexico, a development-stage 60:40 joint venture with Teck Resources (TSX: TECK.A/TECK.B; NYSE: TCK).
Major shareholders in Solaris include Equinox, which holds a 27% stake in the company; Richard Warke, Solaris’ chairman and founder of the Augusta Group, holds a 26% stake; the Lundin Group holds 5%; and management holds 5%.