Laconia Resources Identifies Further High Grade Gold-Silver Targets In Peru

Nov. 12, 2012 7:58 PM ET
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Laconia Resources (ASX: LCR) has further increased the Rasuhuilca Gold-Silver Project's exploration upside and near-term development potential with the identification of additional high grade targets at the Hyallatas Prospect.

The high grade targets and exploration potential of the Hyallatas Prospect in Peru were uncovered in a review of surface and underground sampling 520 metres west of the Rasuhuilca Project's resource.

Best results include 6 metres at 3.59 grams per tonne (g/t) gold and 225.43g/t silver (composite), 4 metres at 2.06g/t gold and 301.63g/t silver (composite), 1 metre at 1.12g/t gold and 1041.7g/t silver, and 1.5 metres at 2.31g/t gold and 604.9g/t silver.

The most significant outcome from the data review and target generation phase has been recognition that there is gold enrichment, in a very high proportion of all surface samples collected by Cominco, Buenaventura and Cambridge Mineral Resources over the Rasuhuilca Project area, highlighting the strong development potential of the asset.

Ian Stuart, managing director, commented: "We are very pleased with the progress of the ongoing review at our Flagship Rasuhuilca Project in Peru, and the fact that a number of high grade targets have been generated.

"This work further increases the project's exploration upside and near-term development potential. We anticipate following up these high grade targets with a drilling program in the near future."

High grade silver zone

A review of surface and underground channel sampling data at the Olga Vein has revealed an extension of the high grade silver zone.

Best results include 1.1 metres at 6.29g/t gold and 89.87g/t silver, 0.7 metres at 10.1g/t gold and 101.3g/t silver, 2.5 metres at 5.08g/t gold and 65.78g/t silver, and 0.7 metres at 5.7g/t gold and 441g/t silver.

The Olga Prospect is a vein system that lies 1.5 kilometres to the northwest of the Rasuhuilca resource. The system is similar to the Rasuhuilca vein.

Composite surface sampling undertaken across 22 metres of channel samples returned a weighted average grade of 2.9g/t gold and 116 g/t silver.

Composite underground sampling over 50 metres of channel samples, returned a weighted average grade of 2.22g/t gold and 65g/t silver.

Typically, there are modest grades throughout the vein and silicification system, with some samples returning higher grades of above 5g/t gold and over 60g/t silver.

The mineralisation at the Olga Prospect is currently being evaluated for potential to provide additional tonnages of ore-grade material that may supplement the mill-feed produced from the Rasuhuilca Mine, once operational.

Future exploration at the Olga prospect will focus on extension of the known mineralisation dimensions, using drilling or exploration development driving.

Importantly, there is scope for extending the zone to the west, as there are good results returned from historic surface rock chip samples 115 metres to the west of the current adit.

Address of big miners

The Rasuhuilca Project is located in a region where major mining companies such as Xstrata (LON: XTA) and BHP Billiton (ASX: BHP) are operating, with Xstrata planning to start production at the nearby Las Bambas project in 2013.

Also, Hochschild Mining's (LON: HOC) major silver and gold operations are also based in the same region as the Rasuhuilca Project. Hochschild has Reserves and Resources exceeding 186 million silver ounces and 1.1 million gold ounces.

Future exploration

Laconia plans to begin first phase drilling at the Rasuhuilca Project as soon as permitting approval is given.

The initial phase of drilling will be a 850 metre diamond drilling program, designed to test mineralisation between the existing mine levels to validate the existing resource model and upgrade it to the Indicated category.

The Rasuhuilca Project currently has an existing Inferred Resource of 360,000 tonnes at 1.97g/t gold and 179g/t silver.

Laconia has also planned extensional exploration drilling on the Rasuhuilca vein, namely the Condor zone that is the high grade silver zone at the western end of the main Rasuhuilca zone, and the Hyallatas Prospect that is about 320 metres west.

Mining Study update

A Feasibility Study was completed at the Rasuhuilca Project in June 2008.

Laconia is planning to update and re-affirm the Feasibility Study results with a view to bringing the Project into production as a high grade, small tonnage mining operation.

The company's strategy is to utilise the potential revenues from the project to unlock the major exploration upside, and thereby increase the current resource base.

The study review manager has been appointed and the review is currently underway.

Exploration upside

Last week, Laconia announced that it had signed a Binding Term Sheet to enter into an option agreement to acquire an 80% interest 5,622 hectares across 11 exploration licences adjacent to its Rasuhuilca Project located in the Andean volcanic arc of southern Peru.

Similar to the company's 100%-controlled Rasuhuilca Project, the new licences are considered highly prospective for epithermal and porphyry style gold-silver-copper.

The option period is for seven years and involves minimal initial outlay.

Importantly, Laconia remains well-funded to validate the historical scoping study and execute exploration programs.

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