Junior mining company Ormonde Mining (AIM:ORM) and its joint venture partner, FTSE 100 mining giantAntofagasta (LSE:ANTO) have made a good start to their exploration and evaluation of the La Zarza Copper-Gold Project, which is situated in Spain’s Iberian Pyrite Belt mining district in the south of the country.
Antofagasta has the right to earn a 51% interest in La Zarza over a three year period by spending US$7 million.
Subject to completion of the earn-in, Antofagasta has the right to increase its interest in La Zarza to 75% by completing a feasibility study. The joint venture was inked in October 2009.
So while it is still early days for the joint venture, Ormonde Mining said it was pleased with progress to date.
A new structural interpretation of the deposit is under development, which will help in choosing the most appropriate places to commence drilling, scheduled for March. The interpretation of the deposit and the identification of new drill targets is also being assisted by a recently completed 42 line kilometre electromagnetic (NYSE:EM) geophysics survey. The survey used a new technology which can detect sulphides.
Work to date has been focused on expanding the understanding of La Zarza by adding new data to Ormonde’s past work on the project. The joint venture is assessing the entire three kilometre strike of the deposit. Clearly for a company the size of Antofagasta, which is a big player in the copper sector, the potential to expand the size of the copper mineralisation would have been a key factor in its decision to invest in the project. Historic drilling at La Zarza has highlighted the potential for decent widths and grades of copper, including 53 meters grading 1% copper, 77 meters grading 1.7% copper and 96 meters grading 1% copper.
"We have made good progress during the first three months of the joint venture and have now defined the main drilling targets. We look forward to commencement of the drilling programme in March to investigate the potential for additional copper mineralisation,” Kerr Anderson, Ormonde's Managing Director, summarised.
Ormonde also confirmed that it was “advancing plans” to fund its Barruecopardo Tungsten Project, also in Spain.
Disclosure: The author holds no positions in the company