Indico Announces Maiden Resource Estimate of Supergene Mineralization at Ocana
July 24 2014 - 6:12PM
Marketwired Canada
Indico Resources Ltd. ("Indico" or the "Company") (TSX VENTURE:IDI) is pleased
to announce the maiden independent resource estimate for the supergene portion
of the Ocana porphyry copper-gold project, southern Peru. Indico has
diamond-drilled a total of 9903 metres in 57 holes at the project. Table 1 lists
the estimated resources following Canadian Institute of Mining, Metallurgy and
Petroleum ("CIM") classification definitions at the cut-off grade of 0.1%
recoverable (acid and cyanide soluble) copper. The recoverable copper cut-off,
using sequential copper leach analysis, is used because it reflects a more
conservative estimate of economically extractable material.
Table 1. Ocana Supergene Resources at 0.1% Recoverable Copper Cut-off
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Classification Millions of Tonnes Total Cu %
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Indicated 13.7 0.46
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Inferred 36.1 0.34
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Highlights of the mineral resource estimate are:
-- Indicated mineral resource of 139 million pounds (63,000 tonnes) of
total copper grading 0.46% Cu
-- Inferred mineral resource 270 million pounds (122,000 tonnes) of total
copper grading 0.34% Cu
-- Supergene mineralization remains open to the south and east, with
significant potential to increase resources
President and CEO, Bob Baxter stated: "We are excited by the results of our
maiden resource estimate. During the drilling program we recognised the
potential for additional resources to the east and we will now be required to
drill this area prior to completion of the Preliminary Economic Assessment. We
believe that following the completion of the PEA that we are headed towards the
production of copper cathodes. It is our objective to fast track the project."
The Ocana Property consists of 23 concessions covering 123 km2 and is located on
the northwest extension of the Southern Peru Porphyry Copper Belt, a trend
defined in part by the Toquepala, Quellaveco, Cuajone, and Cerro Verde Mines to
the southeast. Most recent exploration of the belt has resulted in discovery of
the Zafranal copper-porphyry deposit, located approximately 75 km to the
southeast of the Ocana Property. Significant hypogene (primary sulphide)
mineralization underlies the supergene zone at Ocana, with intersections of
greater than 0.2% copper occurring over 800 metres east-west, and 600 metres
north-south. Mineralization continues to the north onto the neighbouring
property and is currently being drilled by Pembrook Mining Corp. as part of
their Pecoy project.
Supergene Mineral Resources
Table 2 below summarizes the resource estimate in over a range of recoverable
copper (Rec Cu%) cut-off grades.
Table 2. Grade and Tonnages of Indicated(1) and Inferred(2) Resources.
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Indicated Inferred
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Cumulative Cumulative
Rec Cu % Tonnes Tonnes
Cut-off (millions) Tot Cu % (millions) Tot Cu %
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0.10 13.7 0.46 36.1 0.34
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0.20 12.7 0.47 30.0 0.39
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0.30 8.2 0.52 17.1 0.44
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0.40 4.2 0.61 7.1 0.52
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(1) An Indicated Mineral Resource is that part of a Mineral Resource for
which quantity, grade or quality, densities, shape and physical
characteristics can be estimated with a level of confidence sufficient
to allow the appropriate application of technical and economic
parameters, to support mine planning and evaluation of the economic
viability of the deposit. The estimate is based on detailed and
reliable exploration and testing information gathered through
appropriate techniques from locations such as outcrops, trenches, pits,
workings and drill holes that are spaced closely enough for geological
and grade continuity to be reasonably assumed.
(2) An Inferred Mineral Resource is that part of a Mineral Resource for
which quantity and grade or quality can be estimated on the basis of
geological evidence and limited sampling and reasonably assumed, but
not verified, geological and grade continuity. The estimate is based on
limited information and sampling gathered through appropriate
techniques from locations such as outcrops, trenches, pits, workings
and drill holes. Due to the uncertainty that may be attached to
Inferred Mineral Resources, it cannot be assumed that all or any part
of an Inferred Mineral Resource will be upgraded to an Indicated or
Measured Mineral Resource as a result of continued exploration.
Confidence in the estimate is insufficient to allow the meaningful
application of technical and economic parameters or to enable an
evaluation of economic viability worthy of public disclosure.
Recoverable copper cut-off grades are based on sequential copper leach tests on
sample pulps by Acme Laboratories in Santiago, Chile. Based on average soluble
copper recoveries of 77%, together with sulphuric acid consumption tests that
indicate low acid consumption, we believe the supergene mineralization should be
amenable to low-cost, SX/EW heap-leach processing. Metallurgical samples have
been dispatched to SGS Laboratories in Arizona, where they will undergo column
leach testing under the direction of veteran metallurgist Joseph Keane.
Estimation Methods
The resource estimate was completed by Marek Mroczek, P.Geo. of Mining Plus
Canada Consultants Ltd. ("Mining Plus"), an Independent Qualified Person as
defined by National Instrument 43-101 Standards of Disclosure for Mineral
Projects ("NI 43-101") in accordance with CIM Standards on Mineral Resources and
Mineral Reserves. Estimation methods are summarized below and additional details
of the estimation methods and procedures will be available in a NI 43-101
technical report to be co-authored and released by Mining Plus, and filed on
SEDAR (www.sedar.com) within 45 days from the date of this news release.
The resources estimate is based on results from 9,928 metres of drilling in 57
diamond drillholes. Quality control data generated during the various drill
programs conducted at Indico Resources were independently verified by Mining
Plus as part of the project review. The resource model consists of a detailed
three dimensional deposit model interpreted for cut off 0.1% recoverable copper,
different mineralogical zones and lithology. The interpreted three dimensional
deposit model was used to estimate total copper and recoverable copper grades.
The recoverable copper grade is based on sequential leaching lab analyses and
consists of sum cyanide leachable copper and acid soluble copper. All
recoverable copper values exceeding total copper were capped to the total copper
values. The block model grades were estimated by ordinary kriging in cells
measuring 15 x 10 x 6 metres. In total 1,278 assays for total copper and
recoverable copper were composited to 872 composites of 2 metre length. The
basic statistics analyses showed that capping of high assay values was not
necessary.
Future Drilling
Figure 1 (available at the following address:
http://media3.marketwire.com/docs/959237_Figure1.pdf) shows the outline of the
resource estimate and layout/density of the drill holes colour-coded by drill
phase. Additional maps and cross sections, as well as previous drill results,
are available at http://www.indicoresources.com/s/Ocana.asp.
As the mineralization remains open to the east, four additional long holes (400
metres each) and eleven additional short (100-150 metres) holes are currently
planned to test the eastern limits of the hypogene and supergene mineralization,
respectively; these will total about 3000 metres. One of the best supergene
intercepts from the last drill programme is from this area (hole OCA13-27 with
31.5 metres of 0.70% total copper, and 0.63% recoverable copper).
Diamond Drilling and Sampling Procedures
The diamond drilling was completed using exclusively HQ core size. Core recovery
was estimated to be greater than 95% for any given hole. Whole core was split in
half with a manual core splitter for intervals of brittle copper oxides, and the
remainder with a diamond saw. One half is collected for sample preparation and
analysis, and the other half retained for future reference. Samples were
collected on a 2.0m (leached, mixed and enriched zones) and 3.0m (hypogene zone)
sample intervals. Indico on-site personnel rigorously mark, collect, and track
samples which are then security sealed and shipped to Acme, Lima, Peru for
preparation. Pulps are then forwarded to Acme's analytical lab in Santiago,
Chile.
Analytical accuracy and precision are monitored by the analysis of reagent
blanks, certified reference material, and duplicate (coarse rejects and quarter
core) samples. Indico inserts blind certified reference material at regular
intervals (1 in 20) into the sample sequence by field personnel in order to
independently assess analytical accuracy of both regular assays and acid-soluble
copper analysis. In addition, representative blind duplicate samples are
routinely forwarded to Acme for additional quality control (1 in 20 coarse
rejects, and 1 in 40 quarter core). Multi-elements were assayed using Acme's
M300 package, which includes 4-acid digestion and ICP-ES finish; samples with
greater than 0.5% copper are reassayed using an atomic asorption (AAS) finish
(MA402). Lower detection limits are as follows: Cu greater than 0.001%, Mo
greater than 0.001%, Ag greater than 0.5g/t. Sequential copper leach tests are
done by method LHSEQ, and acid consumption by method (GC850). Gold is assayed by
fire assay (FA430), in which fusion of a 30-gram aliquote is followed by AA
finish; with a lower detection limit of 0.005 g/t. Acme has an 9001:2008 and
17025 International Standard Organization rating.
Qualified Person
John Drobe, P.Geo., Indico's Chief Operating Officer and a qualified person as
defined by National Instrument 43-101, has reviewed the scientific and technical
information that forms the basis for this news release. Mr. Drobe is not
independent of the Company, as he is an officer.
On behalf of Indico Resources Ltd.
Robert Baxter
President and Chief Executive Officer
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts responsibility
for the adequacy or accuracy of this release.
A Note on Canadian Anti-spam Legislation
For subscribers to Indico Resources Ltd.'s email list who are not receiving
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to comply with Canada's new anti-spam law which came into effect on July 1,
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anytime if you no longer wish to receive updates.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of
the United States Private Securities Litigation Reform Act of 1995 and "forward
looking information" within the meaning of the British Columbia Securities Act
and the Alberta Securities Act. Generally, the words "expect", "intend",
"estimate", "will" and similar expressions identify forward-looking information.
By their very nature, forward-looking statements are subject to known and
unknown risks and uncertainties that may cause our actual results, performance
or achievements, or that of our industry, to differ materially from those
expressed or implied in any of our forward looking information. Statements in
this press release regarding Indico's business or proposed business, which are
not historical facts, are forward-looking information that involve risks and
uncertainties, such as estimates and statements that describe Indico's future
plans, objectives or goals, including words to the effect that Indico or
management expects a stated condition or result to occur. Since forward-looking
statements address events and conditions, by their very nature, they involve
inherent risks and uncertainties. Actual results in each case could differ
materially from those currently anticipated in such statements. Investors are
cautioned not to place undue reliance on forward-looking statements, which speak
only as of the date they are made. All of the Company's Canadian public
disclosure filings may be accessed via www.sedar.com and readers are urged to
review these materials, including the technical reports filed with respect to
the Company's mineral properties. The foregoing commentary is based on the
beliefs, expectations and opinions of management on the date the statements are
made. The Company disclaims any intention or obligation to update or revise
forward-looking information, whether as a result of new information, future
events or otherwise.
Cautionary Note Regarding References to Resources and Reserves
National Instrument 43 101 - Standards of Disclosure for Mineral Projects ("NI
43-101") is a rule developed by the Canadian Securities Administrators which
establishes standards for all public disclosure an issuer makes of scientific
and technical information concerning mineral projects. Unless otherwise
indicated, all resource estimates contained in or incorporated by reference in
this press release have been prepared in accordance with NI 43-101 and the
guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum
(the "CIM") Standards on Mineral Resource and Mineral Reserves, adopted by the
CIM Council on November 14, 2004 (the "CIM Standards") as they may be amended
from time to time by the CIM.
United States shareholders are cautioned that the requirements and terminology
of NI 43-101 and the CIM Standards differ significantly from the requirements
and terminology of the SEC set forth in the SEC's Industry Guide 7 ("SEC
Industry Guide 7"). Accordingly, the Company's disclosures regarding
mineralization may not be comparable to similar information disclosed by
companies subject to SEC Industry Guide 7. Without limiting the foregoing, while
the terms "mineral resources", "inferred mineral resources", "indicated mineral
resources" and "measured mineral resources" are recognized and required by NI
43-101 and the CIM Standards, they are not recognized by the SEC and are not
permitted to be used in documents filed with the SEC by companies subject to SEC
Industry Guide 7. Mineral resources which are not mineral reserves do not have
demonstrated economic viability, and US investors are cautioned not to assume
that all or any part of a mineral resource will ever be converted into reserves.
Further, inferred resources have a great amount of uncertainty as to their
existence and as to whether they can be mined legally or economically. It cannot
be assumed that all or any part of the inferred resources will ever be upgraded
to a higher resource category. Under Canadian rules, estimates of inferred
mineral resources may not form the basis of a feasibility study or
prefeasibility study, except in rare cases. The SEC normally only permits
issuers to report mineralization that does not constitute SEC Industry Guide 7
compliant "reserves" as in-place tonnage and grade without reference to unit
amounts. The term "contained ounces" is not permitted under the rules of SEC
Industry Guide 7. In addition, the NI 43-101 and CIM Standards definition of a
"reserve" differs from the definition in SEC Industry Guide 7. In SEC Industry
Guide 7, a mineral reserve is defined as a part of a mineral deposit which could
be economically and legally extracted or produced at the time the mineral
reserve determination is made, and a "final" or "bankable" feasibility study is
required to report reserves, the three-year historical price is used in any
reserve or cash flow analysis of designated reserves and the primary
environmental analysis or report must be filed with the appropriate governmental
authority.
FOR FURTHER INFORMATION PLEASE CONTACT:
Dennis Nenadic
IR/Corporate Communications
(604) 398-5379
+1(604) 398-5387 (FAX)
dnenadic@indicoresources.com
www.indicoresources.com
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