RI: Andrew Carter, let’s start off with your Colquipucro project in Peru. It’s a silver project and has an established resource of 20 million ounces of silver. Can you give us a breakdown on that project?
AC: We’ve established a resource there with a 15 hole drill campaign. We’ve identified an area that is about 200 kilometers wide and 250 metres deep. The mineralization runs from surface down to about 200 metres averaging 111 g/t. Geophysics identified similar mineralization to the north that will be one of our next objectives—to try to extend Zone One further north.
RI: Let’s talk about what we’re seeing underground here and some of the mines that are around you. I know that 25 kilometers away you have a 150 million ounce silver deposit and other huge deposits in the same general area.
DH: That’s right. This particular area of Colquipucro lies within a very well known base metal belt with silver in Peru. We are strategically placed to find a good deposit and we’ve already found it at Colquipucro. Our initial drilling has defined about 22 million ounces of silver in the first pass. The potential is there for another 6 million which we can see right now. We believe that Colquipucro as it sits today is 30 million ounces of silver or in that ballpark.
RI: Is that your target for the next drill campaign that is starting imminently?
AC: We will hopefully start drilling the first week in April. The initial part of our next campaign will be to drill holes into a new zone that has the same geological setting as Zone One. We will be putting two deep holes into the new zone to test the structural controls and then we will move the drill rig back up to Zone One.
RI: What is it about Zone Two, Ayawilca, that you’re finding and what is the size that you think you’ve got here?
AC: From the information we have from our consulting geologist it is approximately three times the size of Zone One but until you drill it you never know. The geological setting is exactly the same and has the same banded sandstone there and it’s got historical workings so all the indications are that it will be very similar to Zone One.
RI: You’re stepping out now from the initial Zone One, how much farther can you step out and explore?
AC: We have 10,200 hectares and a lot of it we have looked at and some we will probably discard but there are other areas of interest. We’ve got a lot of work ahead of us and really have no idea how big it could be.
RI: Peru is a mining friendly country. What is infrastructure like where you’re operating?
AC: The road in, by Peruvian standards, is reasonable for pickups and work trucks. A lot of work would have to be done if we started mining and that is a long way off. Power runs right through our property and there are many large mines around us.
RI: Is there an exit strategy that you have in mind? Is this to develop a resource and seek a partner to develop it?
AC: We’re explorers and the thrill of the chase is fantastic. You may go through thousands of properties and then all of a sudden you come up with something like Colquipucro and it makes it all worthwhile to a geologist.
DH: Colquipucro has a few interesting things going for it: Strip ratio is virtually zero and the silver leaches unbelievably quickly, which will lower our costs.
RI: Take us through the next steps, what has to happen between now and feasibility or prefeasibility study?
AC: A lot more drilling. We won’t know really until we drill where we go next. Certainly we can increase Zone One marginally by another 6 or 7 million ounces and we don’t believe there will be that much more there. We are using a cutoff grade of 30 g/t.
RI: Is 30 million ounces a target where you could then talk about a production decision?
AC: Given today’s prices of silver, yes, definitely. It would be very economical. There is no strip ratio in the metallurgy is very viable and it’s well located. To get that massive deposit that we’re looking for we want zone two to be just as mineralized as Zone One.
RI: What is the next step that investors can look for that will say, “Yes you’ve accomplished what you set out to do”?
AC: We’ve got a diamond drill coming in the first week of April and they will start immediately at Ayawilka and then move to the northern extension of Zone One. We’ve got many months of drilling ahead of us.
DH: I’d like to make one final point and that is the price of silver which has gone from $20 to $36 today and I certainly believe if this price stays with us that even if we don’t succeed at Ayawilka that we have to seriously look at Zone One as a stand alone mine.