 | 
| |
|
Cautionary Note to U.S. Investors
The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms in this press release, such as "mineral deposit", that the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form F-1 Registration Statement, File No. 333-121527, which may be secured from us, or from the SEC's website at http://www.sec.gov/edgar.shtml.
Summary
In 1999, J. David Lowell, one of the founders of the Company, began studying potential mineable deposits of copper ore reserves in Ecuador, Peru and Argentina. Through this process, Mr. Lowell determined that Centromin, a Peruvian state owned mining company, was the owner of certain lands which appeared to include interesting potential targets for exploration. In 2002, Mr. Lowell, together with Catherine E. McLeod Seltzer, Luis Baertl and, later, A. Geoffrey Loudon and David E. De Witt, began to study prospective deposits held by Centromin, several of which were considered before selecting the Toromocho mineral deposit. In April 2003, the group formed Peru Copper Syndicate Ltd. ("PCS") for the purpose of making a bid for the Toromocho mineral concessions, which were being privatized by the Peruvian Government.
PCS, though its wholly owned subsidiary Minera Peru Copper Syndicate Ltd.("MPCS"), successfully bid for the Toromocho mineral concessions, and entered into the Toromocho Option Agreement with Centromin in June 2003. The Toromocho Option Agreement gives the Company the right to acquire certain full and partial interests held by Centromin in the mineral concessions and related assets of the Toromocho Project, including rights of use and easements, buildings, a license for the use of water, and use of certain historical information regarding the mineral deposit.
Peru Copper was formed in February 2004 in connection with the Treasury Private Placement and Secondary Private Placement.
Peru Copper's primary goal is to exercise the Toromocho Option and develop the Toromocho Project. In the longer term, Peru Copper may consider the acquisition of other natural resource properties with the goal of becoming a mid-tier base metals development and operating company.
The Toromocho Project is situated in Morococha, an historical mining district in central Peru. The Toromocho Project is a porphyry copper, potentially open pittable, mineral deposit which Peru Copper, through its wholly owned subsidiary MPCS, has an option to acquire from Centromin pursuant to the Toromocho Option Agreement. See "Toromocho Project" and "Toromocho Project Agreements".
Prior to the Company's involvement in the Toromocho Project, from 1966 to 1976 Cerro de Pasco, a United States mining company which owned a majority of the mineral concessions contained within the Cerro de Pasco mining district prior to their being nationalized in 1974, and Centromin conducted a total of 42,394 metres of diamond drilling on the deposit. From 1976 to 2002, Centromin did not conduct any exploration or development activities on the Toromocho Project.
Location
The Toromocho Project is located in central Peru, approximately 140 kilometres east of Lima in the Morococha mining district, Yauli Province, Junin Department. A paved highway from Lima passes through Morococha. The region has steep topography with elevations over the deposit ranging from 4,700 metres to over 4,900 metres above sea level. The valleys in the area are of glacial origin.
Access to the Toromocho Project is by either the paved central highway or the central railway, which both connect the Morococha mining district to Lima and La Oroya. The distance from Lima to Morococha is approximately 142 kilometres by road and approximately 173 kilometres by rail. The distance east to La Oroya is approximately 32 kilometres by road and approximately 35 kilometres by rail. Another company is currently operating a custom smelter in the town of La Oroya.
Geological Setting, Mineralization and Geology
The description of the geologic setting is based, in part, on material prepared by Kaiser and Centromin. The description has been updated based on information provided to IMC by the Company. IMC personnel observed much of the geologic setting during the site visit to confirm the basic understanding of the regional and deposit geology.
The recent drilling, logging and interpretation of the five drill holes completed by the Company in 2003 indicate some changes to the interpretation of the Toromocho deposit. The description of the mineralization and mineral resource estimates included in the Technical Report considered and incorporated the new data, which concluded that the Toromocho deposit consists of a greater component of hydrothermal breccia within the deposit than Centromin previously interpreted.
The Morococha area is characterized by a series of folded paleozoic and mesozoic rocks, primarily calcareous sediments with some lesser intercalcated volcanic flows. This sequence has been intruded with multiple events. The intrusives helped to prepare the area for mineralization and also provided the source for the hydrothermal mineralization.
The limestone sediments have been folded into an anticline structure with a general north northwest trend so that the limbs dip roughly east and west. There are four main units of the sediments. From youngest to oldest, the sediments are: the Mitu group, the Pucara group, the Goyllarisquizga group and the Machay group. The unit in the immediate area of the Toromocho deposit is the Pucara group of Jurassic age dolomites, and siliceous limestones, with intercalated basalt and trachyite flows. This unit is estimated to be 430 metres thick with an anticlinal structure.
Intrusions in the Toromocho deposit area are tertiary in age with several textural compositions. At the contact between the intrusions and the limestones, contact metamorphic skarns, tactites and hornfels have been formed. The most recent drill holes have categorized these contact metamorphics as tactites.
Hydrothermal mineralization is hosted in both the intrusive and tactite rock types although the tactites are generally of somewhat higher grade. Recent logging of the new drill holes indicates that much of the mineralization is hosted in a hydrothermal breccia. The breccia crosses the rock type boundaries so that clasts can be predominately intrusive, tactite, or a mixture.
Mineralization and Geology
The Toromocho deposit is a complex, mineralized assemblage of veins, veinlets, stockworks, manto type bodies and disseminated sulfides of the general porphyry copper type.
The Toromocho mineralization was deposited in Jurassic limestones of the Pucara formation, together with tertiary intrusives including diorites, granodiorites, quartz, monzonites and quartz porphyries. A lot of metamorphism is related to the intrusive activity and extensive bodies of skarn are present, including tactite and hornfels. Hydrothermal and intrusive breccias are the principal host rocks for much of the copper mineralization.
The deposit shows well developed concentric silicate alteration and metal zoning. There is a central potassic zone with secondary biotite, quartz and pyrite that is surrounded by a phyllic zone with quartz and sericite. The outer zone is prophylitic with epidote, chorite, calcite, and sphene.
The concentric metal zoning at the Toromocho Project is well developed with a central zone of disseminated copper molybdenum surrounded by an almost complete ring of lead-zinc, mostly as vein deposits, but including possible bulk disseminated zinc bodies. This zone, in turn, is surrounded by a zone of lead-silver vein deposits. In total, there are 20 significant veins that have been mined sporadically for 100 years in the Morococha mining district. The metal zoning has some significance from the standpoint of the Toromocho Project's development because ultimate back slopes for a Toromocho pit will extend into the vein zone.
The Toromocho deposit is a roughly vertical cylindrical shaped mass, but in detail it has a complex shape. Intrusive bodies cut dipping limestone beds forming calc-silicate metamorphics (generally mapped as tactite). The copper grade is usually higher in the tactite forming large stacked manto-like higher grade bodies. Some of these relationships have been overprinted by the development of a large intrusive breccia pipe that is contemporaneous with the copper mineralization.
Some enargite has been found in the highest part of the Toromocho deposit, usually in high grade veins, but it is not present in most of the orebody. The presence of enargite, and other zoning features, indicates that drilling to date has sampled the top of the porphyry copper system and the deposit may extend downward hundreds of metres below the present exploration.
The distribution of chalcocite in the deposit is not typical for a porphyry copper deposit. Chalcocite enrichment blankets in other porphyry coppers seldom exceed 100 to 200 metres in thickness and the primary chalcopyrite is usually all replaced by chalcocite. At the Toromocho Project, chalcocite is distributed vertically over at least 250 metres, but some chalcopyrite remains throughout much of this interval. To further complicate the interpretation of this occurrence, the historical drilling was done 30 years ago before porphyry coppers were well understood and no quantitative data was recorded about percentages of chalcocite, chalcopyrite and pyrite. Improved information on mineral species will be important to establish the proper process flowsheet.
The Company's interpretation of the primary Toromocho Project ore control is evolving from the original idea of higher grade, basically sub-horizontal, zones of skarn and skarn contact zones to the idea that the higher grade volumes are part of a large breccia pipe or a series of brecciated high angle higher grade zones.
There is a breccia annulus enclosing a cylindrical mass of only partly brecciated mineralization. The second hole drilled by the Company in 2003 was also in continuous breccia from the surface to a depth of at least 526 metres and the remaining three holes drilled by the Company also cut largely intrusive breccia mineralization.
Future exploration of the Toromocho ore deposit by means of diamond drilling can be from either the surface, or the presently existing drift system. Such drilling will be directed toward the definition of and extension of measured and indicated mineralization in two directions, which are: (1) increase in grades of copper at depth; and (2) extension of the Toromocho Project toward the northeast into a copper, zinc, silver deposit.
| |
| | |
