Helix Resources (ASX: HLX) might be a step closer to earning cash flows by the acquisition of the Blanco Y Negro Mine and surrounding mining leases which is 21 kilometres north-east of Glencore's (LON: GLEN) Punitaqui copper mine and operations.
Helix aims to define an economic resource and potentially toll treat or contract mine the material at a nearby operating mill.
Glencore's Punitaqui copper mine began operations over a year ago to produce around 40,000 DMT of copper concentrates annually.
Blanco Y Negro is also located just 10 kilometres south-west of a large service town, Ovalle.
Consideration for the deal from a private vendor is US$80,000, providing Helix with total ownership of 1258 hectares of exploitation concessions within the regional Huallillinga Project.
Anecdotal information suggests artisanal mining on the property has been at a rate of 10 tonnes per day recovering material with a grade of 1.5% to 2% copper.
Highlighting the prospectivity of the acquisition, first-pass rock-chips have returned up to 1.1% copper (over 4.5 metres) and up to 1.3g/t gold (over 4.2 metres) in channel samples taken from outcrop.
In total 43 channel samples were collected, with the results averaging a very encouraging 0.4% copper, 0.2g/t gold and 47ppm molybdenum, over a strike exceeding 900 metres, which provides evidence that a large copper gold target is present.
Helix on fast track to define economically exploitable copper gold
The importance of the acquisition of the Blanco Y Negro Mine and surrounding mining concessions is that Helix is now well placed to potentially fast-track the definition of an economically exploitable copper gold system.
If this outcome is achieved it could be attractive to nearby operating mills who can contract mine and/or toll-treat the material, which would create cashflow for Helix to fund additional exploration - such as the Joshua Copper Porphyry Project.
Joshua is also located in Chile, with reverse circulation and diamond drilling at the Joshua Target 1 having recently returned; 400 metres at 0.33% copper equivalent, including 70 metres at 0.41% copper equivalent; 256 metres at 0.32% copper equivalent from surface, including 27 metres at 0.58% copper equivalent; and 143 metres at 0.27% copper equivalent from surface.
Individual assays have returned grades of up to 0.8% copper, 1.15g/t gold and 764ppm molybdenum.
The system covers more than 1.5 square kilometres, and mineralisation remains open at depth and along strike in all directions.
Helix has $1.8 million in cash and investments, yet the market cap. of just $8 million provides an enterprise value of just over $6 million.
This valuation appears light considering the value of the company's growing portfolio or projects, which include the;
- Restdown Gold JV (70%) hosting 2.6 million tonnes at 1.2g/t gold;
- Canbelego Copper JV (51%) hosting 1.5 million tonnes at 1.2% copper;
- Yalleen Iron Ore JV (30%) hosting 84.3 million tonnes at 57.2% iron; and the Tunkillia Gold JV (45%) hosting 800,000 gold ounces and 1.6 million silver ounces.
Proactive Investors is a market leader in the investment news space, providing ASX "Small and Mid-cap" company news, research reports, StockTube videos and One2One Investor Forums.