Naltagua

Location

The Naltagua Copper System (“Naltagua”) is located in Chile at an altitude of between 400m and 1,000m above sea level in the Coastal Range, 80km by road SW of Santiago and 75km by road SE of the port city of San Antonio (Figure 1).

Figure 1: Metallogenic Belts and Copper-Gold Deposits of northern Chile

Target

Equus Mining Limited (“Equus”) is targeting large-tonnage (60 to 80Mt), manto-type copper – silver deposits grading between 0.8 and 1.3% Cu. The El Soldado Mine (Figure 1), with a total resource of 200Mt at 1.35% Cu and operated by Anglo American, is a close deposit analogue in terms of metallogenic belt, age of deposit, host-rock, metal association, ore mineralogy, metallurgy, hydrothermal alteration and structural control.

* The target size is conceptual in nature and should not be construed to indicate a JORC Code compliant mineral resource. There is insufficient information at this early stage to establish whether further exploration will result in the determination of a mineral resource within the meaning of the JORC Code.
Tenure and Project Areas

Equus has secured an Option Purchase Agreement to acquire 100% of a contiguous group of 14 Mining Licenses covering an area of 18.05km2 and 75% of the known areal extent of the large (4km by 2km) Naltagua Copper System (Figure 2).

Two initial project areas, Yerba and Hinojo, have been identified within the Naltagua Copper System. Both hold potential to contain in excess of 30Mt of copper mineralization within the target grade-range of 0.8 to 1.3% Cu. Extensive, outcropping copper mineralization has been mapped and sampled in both areas.

Figure 2: Naltagua Copper System (red), Option Area (grey) and Location of Initial Projects (blue)

Historical Mining (1905 – 1945)

Rich-deposits of oxide and sulphide copper ore were systematically exploited by the French company Societe des Mines Cuivre of Naltahua, who mined 15 discrete bodies at an average head-grade of approximately 4% copper (“Cu”). A network of tramways delivered the ore from the mountain to a smelter located in the nearby valley for processing.

Figure 3: Naltagua Smelter (circa 1915)

Mining Company Exploration (2000 to 2009)

Noranda and Freeport inspected the area and, based on limited mapping and rock-chip sampling, formed the view that the copper resource potential of the black shale-hosted copper deposits was limited to approximately 25Mt of copper ore. Noranda drilled a single exploration hole into a mineralized volcanic breccia and despite achieving 32m at 0.5% Cu from surface, elected to relinquish its option. Other than this single hole, no other exploration drilling is known to have been completed at Naltagua despite an extensive search of the records.

Equus Exploration (August 2011 – July 2012)

In contrast to previous investigators, Equus has been targeting the prospective primary feeder-zones to the copper system; the hydrothermal breccia pipes, the sheets of volcanic breccia and the tectonically disrupted intermediate (andesite, latite) and felsic volcanics (rhyodacite). Over 1,000m of underground workings (adits) have been systematically channel-sampled, several areas of hydrothermal alteration mapped and rock-chip sampled, three trial-lines of Induced Polarisation (“IP”) geophysics completed, and a 30kg metallurgical sample processed. Drill pads have been cleared, the drilling contract signed, and the IP coverage is being expanded to define new targets.

Geology

Naltagua is a manto-type copper-silver system hosted by marine volcanic rocks of Lower Cretaceous age (118 to 97 million years old). The copper is interpreted to have been scavenged from intraformational volcanic and sedimentary rocks by relatively low-temperature metamorphic hydrothermal fluids generated during diagenesis (burial) and expelled along permeable coarse-grained lithologies and channelled into favourable trap-sites were the metals were deposited and concentrated.

Figure 4: Naltagua Copper System – Geological Model

Mineralization and Preliminary Metallurgical Testwork

The mineralization comprises disseminated bornite and minor chalcopyrite associated with low-intensity calcite-chlorite-epidote-albite (propylitic) alteration in andesite, latite and rhyodacite volcanics and breccias. A 30kg metallurgical sample was collected from the Yerba mine dump and despatched to ALS Ammtec in Sydney for preliminary qualitative testwork. A simple floatation test produced a high-grade (41% Cu, 463g/t Ag), premium-quality sulphide concentrate with no penalty elements (Figure 5).

Figure 5: Sample of Mineralization (a) used to produce a sulphide concentrate (b).

Strategy, Methodology and Technology

Discussions have already been initiated with other mining lease holders in the area to investigate opportunities for collaboration during exploration, mining and/or ore processing.

Geological mapping, rock geochemistry and drilling are proven and effective methods that will be employed to define and evaluate resource targets at Naltagua.

Induced Polarisation (“IP”) geophysics provides an effective ‘filter’ through which to discriminate sulphide ‘hot-spots’ within the broad area of secondary copper mineralization that defines the Naltagua copper system.

Advanced metallurgical testwork will be conducted to continue to optimise metal recoveries and draw market attention to the premium sulphide product.

Resource definition drilling is scheduled to commence once an Environmental Permit has been issued by Chilean Government. Unlike many areas in Chile, work an continue all-year-round due to the low altitude, all-weather roads and close proximity to services.

Figure 6: Photograph of the northern section of the Naltagua Project Area

Advanced Targets

There are currently 10 named exploration prospects at Naltagua at various stages of assessment and three are summarised below to illustrate the range of resource assessment opportunities.

Yerba Prospect: Equus has mapped and channel-sampled 541m of underground workings and taken numerous surface samples to delineate a zone of disseminated bornite mineralization in volcanics (Figure 5). The weighted average grade of this relatively small part of the mineralized system with dimensions 50m wide by 150m long and open along-strike and down-plunge is 1.1% Cu and 9.9g/t Ag (Figure 6). The down-plunge component has been ‘mapped’ using IP to the effective limit of the system (~250m).

Figure 5: Photograph of the Yerba Prospect and the historical Yerba Buena Open Pit
Figure 6: Results of underground and surface channel sampling at the Yerba Prospect

Cerro Prospect: Ubiquitous malachite (green secondary copper mineral) after bornite (primary copper sulphide) is variably exposed in a relatively flat-lying sheet of altered andesite on the main Naltagua ridge. Twenty-four (24) samples of outcropping volcanic breccia collected along a ridge-top traverse over a distance of 242m returned a composite grade of 1.6% Cu and 23g/t Ag (Figure 6).

Figure 7: Results of ridge-top sampling at the Cerro Prospect

Lomas Prospect: Ground follow-up of a coherent, broad (260m) Induced Polarization (“IP”) chargeability anomaly (Figure 7) led to the discovery of a previously unknown copper working (adit) at the exact point where the source of the anomaly had been predicted to crop-out at surface. This anecdotal evidence gives Equus considerable confidence that IP at Naltagua will prove to be a critical and relatively low-cost ‘mapper’ of potential ore systems. The IP survey is currently being expanded.

Figure 8: Inducted Polarisation (IP) Chargeability Pseudo-section from the Lomas Blancos Prospect