Copper Part II9 Mar 2012 20:55
tonne gold and 100 grams per tonne silver. With gold steady at over US$1,700, and costs likely to stay at less than US$600, that should generate enough cash to keep the lights on for a long time yet.
Some investors might argue that this is nothing new. But actually the company’s Mexican operations in the past relied entirely on Diablito, and although it did pay some bills it never quite cut the mustard in allowing VANE to cover all its costs and entertain ambitious growth plans. But David is clearly pretty pleased when he states that in the last quarter, and for the first time, the Mexican operations have covered all of VANE’s costs, including an ambitious copper porphyry exploration programme in Arizona and New Mexico.
For many a year, VANE touted its uranium breccia pipes in Arizona and Utah as its first priority. But legal complexities involving the US federal government and the sheer scale of the upside on offer from the copper exploration have combined to cause a shift of emphasis. In VANE’s presentational literature, porphyry copper exploration comes first, followed by uranium, followed by the Mexican gold operation.
And it’s not hard to see why. For one thing, there’s Clark and Steven’s extensive experience in copper exploration. But more than that, the company also has at its disposal a database of over 7,000 files of exploration data accumulated by Freeport McMoRan over a 100 year period. This was acquired by Clark and Steven in conjunction with two other of VANE’s founders after Freeport engaged in a radical restructuring and decided to focus exclusively on Indonesia. The bulk of the data relates to exploration prospects in the USA, and includes among its choicest morsels, details of extensive copper exploration work undertaken in Arizona and New Mexico.
It took a while to pull the requisite information together, but VANE finally got round to drilling for copper porphyrys last year. The first two targets drilled, Yuma King and Granite Gap, turned out to be dead ends. But the third, McGhee Peak, shows real promise as a potential copper-moly porphyry system. The company has identified two mineralised targets roughly one mile apart, and has already completed two rotary holes and is re-drilling a third. So far, copper values ranging between 300 parts per million (ppm) and 600 ppm have been encountered, accompanied by zinc values greater than 200 ppm.
“There are now two boxes to tick”, says David. “The first is to positively identify it as a porphyry system. The second is to identify something economic that’s in it”. The stakes are pretty high, as a quick glance at the nearby Mission/Pima mine shows. Here, Asarco is sitting on around a billion tonnes of 0.57% copper, with silver and moly credits. Bearing in mind that copper is currently trading at around US$8,500 per tonne, that is a lot of in situ value.
Not that VANE is guaranteed of finding anythi
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