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Apoquindo’s Very Big Copper Deal

By Eric Pratt
MidasLetter.com
Friday, May 15, 2009

Yesterday saw the fortunes of TSX Venture-listed Apoquindo Minerals (TSX.V:AQM) improve dramatically with the announcment of a joint venture to acquire up to 100% in Teck’s (TSX:TCK.A) Zafranal Copper-Gold project in Arequipa, Peru.

Speculation among industry geologists suggests that as much as 200 million tonnes of ore averaging at least .5% copper and gold credits of .1 grams per tonne present in the rich deposit. That means an in-situ value potentially in excess of $5 Billion at today's metals prices.

The project is in close proximity to several known multi-billion tonne deposits.

According to the terms of the deal, Apoquindo, through its wholly owned Peruvian subsidiary, Minera KoriTambo SAC, Teck Peru has granted KoriTambo an option to acquire an initial 51% interest in the Zafranal copper-gold porphyry project in the northern extension of the Paleocene Porphyry Copper Belt of Southern Peru, subject only to a back-in right and royalty reserved to Teck Peru, but with further options for KoriTambo to increase its interest to 100%.

KoriTambo can exercise its initial option to acquire a 51% interest in the Zafranal property by making cash payments totalling US $5,000,000, incurring work expenditures totalling US $7,500,000 (of which $2,225,000 of expenditures are considered a firm commitment) and causing Apoquindo to issue an aggregate of 1,500,000 common shares, all by May 31, 2013.

Exploration efforts to date at Zafranal include a total of 11,805 m of drilling in 36 holes (32 reverse circulation holes, 4 diamond) as well as detailed mapping, rock sampling, AMT and EM geophysical surveys. The main zone consists of secondary chalcocite and primary copper sulfides extending approximately 2.5 kilometers in length east-west, with an average width of nearly one kilometer. The main zone has been principally defined by 23 reverse circulation and diamond drill holes at a drill spacing of 250 m – 400 m. Within this long zone, the higher grade chalcocite blanket, which is characterized by secondary copper minerals replacing chalcopyrite, is approximately 1.2 kilometer in length, 250 meters in width, averaging approximately 100 meters in thickness. The limited diamond drilling to date appears to give higher copper grades than the reverse circulation copper grades in the same location.

A few select drill results to date include:

• 70m @ 1.08% Cu & 0.25 g/t Au (RC hole 7)
• 110m @ 1.02% Cu (RC hole 8)
• 110m @ 1.22% Cu (DH hole 1 – twin of RC 8)
• 77m @ 1.80% Cu & 0.21 g/t Au (DH hole 4)

The Zafranal near surface secondary copper mineralization is open to the west and the primary copper-gold zone is open at depth. Good grade primary copper mineralization was intercepted near the bottom of hole RC-08, including 18m @ 0.88% Cu, 0.18 g/t Au, which suggests a potential for a good grade porphyry Cu-Au-Mo system in potassic alteration at depth.

Apoquindo will launch an aggressive exploration program on the Zafranal project in 2009/2010 consisting of 13,000m of diamond drilling to test the primary hypogene mineralization at depth, conduct infill and exploratory drilling on the known chalcocite blanket, and drill test several of the satellite properties on the land package.

Peru is the world's top producer of silver, number 2 in copper and zinc and ranks sixth in gold. Arequipa and Ancash are the two most prolific “departments” or provinces within the country for the red metal.

Peru’s National Ports Authority (APN) reported that the mining company Xstrata has submitted a project proposal to build a port in the district of Ocoña, Arequipa, required for the shipment of minerals from Las Bambas project in Apurimac.