Suramina Resources Inc. (TSX: SAX ) recently announced that the company has significantly increased the mineral resource estimate on its Josemaria property in Argentina.
A Mineral Resource of Almost 5 Billion Copper-Equivalent Pounds
Based on a total of 21,617 meters of reverse-circulation and diamond drilling, Josemaria now has an inferred estimated mineral resource, in accordance with NI 43-101 standards, of 460 million tons of ore grading 0.39% copper and 0.30 grams per ton (g/t) gold at a 0.30% copper cut-off grade.
As a rough figure, this represents about 4.87 million ounces of gold and a hearty 3.59 billion pounds of copper, or about 4.89 billion copper-equivalent pounds...a pretty nice bundle of metal.
The new mineral resource estimate represents a +20% increase in contained copper pounds and a +27% increase in contained gold ounces over the previous estimate. Josemaria previously was defined with having an inferred mineral resource estimate of 374 million tons grading 0.40% copper and 0.29 g/t gold (about 2.99 billion pounds of copper and 3.83 million ounce of gold) at a 0.30% copper cut-off. This was based on 13,697 meters of drilling, about 7,900 meters less than is currently figured in.
At a 0.20% cut-off grade, the most recent estimate suggests a mineral resource of 1.125 billion tons grading 0.31% copper and 0.22 g/t gold. In the table below you'll find the most up-to-date inferred mineral resource estimates in relation to other cut-off grades...
On top of this already impressive inferred mineral resource, the company says drilling indicates that the Josemaria deposit remains open to the northwest where some of the best drill intersections have been recovered to date. These include hole JMRC-27 which intersected 0.47% copper and 0.34 g/t gold over 364 meters, including 0.90% copper and 0.40 g/t gold over the last 36 meters. So there still may be significant upside for further exploration at Josemaria.
Josemaria Location and Ownership
The Josemaria project is located in northern San Juan province, Argentina approximately 10 kilometers east of the Chilean border. Elevation at the property ranges from 3,900 to 4,700 meters above sea level and the terrain varies from broad flat alluvial planes to rounded ridges and peaks of varying steepness.
Suramina Resources, a member of the distinguished Lundin Group, has the right to obtain a 100% ownership of Josemaria through payments totaling US$2.79 million...a hell of a good deal when you consider the massive mineral resource contained. Think about it like this: Suramina paid $2.79 million for 4.89 billion copper-equivalent pounds. Or in other words, the company paid $0.00057 for each pound of copper-equivalent resource. Like I said, it was a good deal.
A Low-Grade Mineral Resource
For investors and speculators, there's one thing that I must point out. It's this: Josemaria is a considerably low-grade deposit. And even with upwards of 5 billion pounds of copper-equivalent resources, I don't think that Josemaria could stand on its own an economically feasible mine. The material is mostly low-grade sulfides, making it an extremely expensive to process.
It's very important to know, however, that Suramina has already considered this.
You see, the company has five other exploration projects near Josemaria. And the plan is to define several large deposits within the same area and merge them into one very large operation. So what I getting at is this: New investors should be aware that despite an already impressive mineral resource, there is still some exploration risk that comes along with Suramina.
On the other hand, I have complete faith in the Lundin boys. Lukas and Ian Lundin have more than justified the respect they've earned in the mining community around the world. The Lundin Group has consistently forged success after success.
I made a brief call to Investors Relations last week and spoke with Sophia Shane. Sophia told me that Suramina will focus on exploring the other properties near Josemaria in the coming months. Suramina's website says that the company will be drilling:
- 3,000 meters of reverse-circulation (RC) holes in the Filo del Sol target;
- 1,600 meters of RC holes in Los Helados; and
- 1,350 meters of RC holes in Cerro Blanco during the 2007/2008 summer season (which is just beginning now in Argentina)
All three of these projects are also copper/gold targets. Sophia tells me that Suramina has about $5 million in the bank, which will probably be enough to fund the company's exploration efforts this season.
It will be very interesting to watch how the Suramina story plays out. If the company can prove up a large mineral resource over their other five properties, Suramina's Argentinean assets may become the next major copper mine in South America and leave a fat wad of cash in the pockets of today's investors.
For more information about Suramina or its properties, visit the company's website at: www.Suramina.com
Until next time,