Southern Hemisphere Mining (ASX: SUH, TSX-V: SH) has resumed drilling at its flagship Llahuin Copper-Gold Project in central Chile with the start of an accelerated drilling campaign under the new joint venture with Canadian base metals miner Lundin Mining Corporation (TSX: LUN).
Three drill rigs, one reverse circulation and two diamond drill rigs, are currently operating at both the Central Porphyry and the nearby Ferrocarril zone at the Llahuin Project.
The current program is targeting additions to the already defined Measured and Indicated Resource of 145 million tonnes at 0.4% copper equivalent.
Lundin Mining brings top skills to the Llahuin Project, with experience and operations in Portugal, Sweden, Spain and Ireland, producing copper, zinc, lead and nickel.
Trevor Tennant, managing director of Southern Hemisphere Mining, said resource drilling was now back in full swing at the Llahuin Project with an accelerated program formally approved by the Joint Venture and the two companies working closely together to progress the Llahuin Project to the next level and to evaluate exciting new growth opportunities in Chile.
"Lundin Mining's extensive experience in exploration, project evaluation and development will bring a host of benefits to Southern Hemisphere and will help us to unlock the value of the Llahuin Project.
"The Llahuin Project is and will remain our key focus but we are also aware of and currently evaluating other copper-gold opportunities within the Coquimbo Region of central Chile in conjunction with Lundin Mining, which may provide future opportunities for joint operations."
A Joint Venture Technical Committee between Southern Hemisphere and Lundin Mining has been established, with the initial joint venture budget providing for this approved accelerated drilling campaign.
After completing an initial review of the Llahuin Project and the results to date, the Technical Committee has decided to defer completion of the previously announced Llahuin Project Scoping Study to enable additional drilling results to be included in an updated resource estimate.
Joint venture progresses
The Joint Venture arrangements with Lundin Mining have progressed under the terms of the Option Agreement announced in mid-October, including the incorporation of a Chilean joint venture company, Minera Llahuin SCM, and the establishment of the Joint Venture Technical Committee.
The two companies previously executed an agreement that will see Lundin Mining spend up to US$35 million (A$33.2 million) on exploration at Llahuin to earn a direct stake of up to 75% over a six-year period.
Lundin Mining also took a strategic 11.5% stake in Southern Hemisphere by way of a US$5 million share placement at a 47% premium.
Under the agreement, Paul McRae has been appointed to the Southern Hemisphere Board as a non-executive director and representative of Lundin Mining.
Llahuin now wholly owned
Southern Hemisphere has also completed the purchase of the Amapola Exploitation Licences covering the Llahuin Project under the original option arrangements announced in mid-July 2011.
Importantly, this purchase completes the 100% ownership of all the Llahuin Project licences, including the three targeted zones of Central Porphyry, Cerro de Oro and Ferrocarril.
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