TORONTO (miningweekly.com) – King copper’s crown recently slipped in Peru; formally the second-largest producer of the red metal, the country was pushed into third place by China during 2011, according to the International Copper Study Group’s 2012 fact book.
Peru is keen to rectify this. On May 6, the country’s energy and Mines Minister Jorge Merino outlined the country’s objective to ramp up production to a yearly output of 2.8-million tons by 2016 compared with the current figure of 1.3-million tons, Peruvian news agency Andina reported.
Critical to achieving this would be rapid exploration and development of the county’s ample copper resources and not just by significant operators, but also by mid-tier and junior mining and exploration companies.
One company with high hopes is Panoro Minerals, which has recorded notable progress over the past year. The company has a suite of Peru-located projects, with the focus currently centred on its Cotabambas copper/gold/silver project and Antilla copper/molybdenum project. Both are located in the south-central Peru.
“I was first introduced to Panoro while living and working in Peru from 1996 to 2001. My friend Christian Pilon [now executive director, Peru] helped establish the company and I became small, quiet shareholder,” Panoro Minerals president, CEO and director Luquman Shaheen told Mining Weekly Online.
“Leaping forward to 2008, I was asked to take over as president and agreed,” he said. “Our first focus was on the Antilla project, where we started drilling in 2008. The results of these campaigns enabled us to produce a resource estimate during 2009.”
The Antilla project subsequently became the subject an arbitration proceeding between Panoro and Chancadora Centauro. The case related to the termination of a joint-venture agreement stemming from a lack of payment by Chancadora. On September 27, 2012, the Peruvian courts ruled decisively in Panoro’s favour, a decision that cannot be appealed.
“We gained possession of the site in January 2013 and have since been re-evaluating the property, its drill hole data base and its geology etc. We’ve also been incorporating the drill data conducted by our former partner into a new resource model and, within the next few months, expect to produce a new resource estimate for Antilla. After this, we’ll start a preliminary economic assessment [PEA]”, Shaheen said.
At an inferred level, and with a cut-off grade of 0.25% copper, Antilla currently has 154-million tons for 0.47% copper and 0.009% molybdenum. This equates to an in-situ content of 1.6-billion pounds of copper and 30-million pounds of molybdenum.
As the wrangles continued over Antilla, Panoro’s shifted its focus to Cotabambas. “From late 2010 until mid-2012, we drilled about 24 000 m, enabling us to produce the current resource estimate in September last year,” Shaheen said.
This inferred resource stands at just over 404-million tons for 0.42% copper, 0.23 g/t gold and 2.84 g/t silver, with a cut-off grade of 0.2% copper equivalent. The in-situ content comprises 3.75-billion lbs copper, 3-million ounces gold and 36.9-million ounces silver.
“Since September 2012, we’ve completed another 30 000 m of drilling, which we’ll incorporate into a new resource estimate planned for September 2013,” Shaheen said.
“We expect a portion of the new resource will be within the indicated category and, potentially, a portion to be in the measured category. However, our main focus is to increase the tonnage and to increase the high-grade component of that tonnage,” he said. “We plan to start a project PEA after the resource estimate is unveiled.”
“Over $15-million has been spent on exploration on Cotabambas,” he added. “So it’s quickly becoming a significant project in an important part of Peru.”
Drilling work continues at Cotabambas, although at a reduced level. “We’ve cut the number of drill rigs from six to one or two, simply because we don’t want to drill too fast before releasing the new estimate. In the meantime, we’ve been announcing intersects returned from high-grade zones,” he said.
This includes the latest drill results that were released on May 6. Highlights contained drill hole CB-111, which intersected 88.5 metres oxide copper mineralisation, grading 0.93% copper, 0.31 g/t gold and 3.3 g/t silver, and drill hole CB-115, which returned 119.6 metres copper mineralisation, grading 0.61% copper, 0.25 g/t gold and 4.3 g/t silver.
Money, Community and Copper
Compared with many others in the same sector, Panoro has been fortunate with its financing. “Thankfully, we’d thought ahead and in March completed a $15-million financing,” Shaheen said. “Post-financing we had $21-million; right now we have between $19-million and $19.5-million.”
Community relations also continue to be fostered and developed. “Community relations are critical and we spend about 6% and 10% of our exploration budget on community relations initiatives. To conduct mining business in Peru, you must have the three Ps in place: proyectos, or good projects; plata, by which is meant money; and permiso, the correct permissions and permits,” Shaheen said.
“For successful the latter, a company must have excellent community relations,” he continued. “We also have a full-time, on-site community relations team. They’re all Peruvian. In addition, Panoro has socio-economic agreements with the communities surrounding Cotabambas, where we’ve been drilling without delay or any disruption.”
Shaheen is bullish about the future; projects like those being developed by Panoro would be critical for Peru to achieve its goal in ramping-up copper output, he argued.
“The Peruvian Minister of Energy and Mines and the Peruvian president have stated the country’s goal is to double its copper production. Peru wants to compete with Chile and this will require the development of all copper projects in the south-central part of country, the region where we find Xtrata’s Las Bambas project, First Quantum’s Haquira project and Hudbay’s Constancia project,” he said.
“And it’s also the region where the Cotabambas project is located, for which we have strong government support; we believe it will be the region’s next big copper project,” he concluded.