REG - Great Southrn.Copper - GSC Signs Cerro Negro Purchase Option Agreement

Great Southern CopperAnnouncement

08/07/2024 07:00

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RNS Number : 4027V  Great Southern Copper PLC  08 July 2024

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK
VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH
LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED.  ON
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

8 July 2024

 

Great Southern Copper plc

("GSC" or the "Company")

 

 

Great Southern Copper Signs Cerro Negro Purchase Option Agreement

 

Preparation for drilling in progress to extend historical high-grade Cu-Ag-Au
deposit,

including multiple drill-ready targets

 

Great Southern Copper plc (LSE: GSCU), the company focused on
copper-gold-lithium exploration in Chile, is pleased to announce that,
following a four month due diligence period, it has finalised signing of the
Purchase Option Agreement for the Cerro Negro exploitation concessions which
includes the historical Mostaza Cu-Ag-Au Mine.

 

Highlights:

·    Purchase Option Agreement finalised allowing the Company to acquire
100% ownership of the prospect

·    Includes the historical Mostaza Cu-Ag-Au mine previously owned by
Antofagasta Minerals

·    7 tabular bodies (lenses) of high-grade Cu-Ag-Au mineralisation
identified to date

·    An historical (1981) non-JORC mineral resource estimate for Lens 1
and 2 reported 190,600t of measured & indicated sulphide with grades of
1.2% Cu, 80 g/t Ag, and 0.45 g/t Au, plus an additional 63,000t of inferred
sulphide resource at depth

·    Historical drilling of 25 holes (1,024m) at Mostaza indicates
mineralisation is open at depth and along strike. Only 14 holes reached target
depth and deepest drilling was to only 92m

·    Untested alteration-mineralisation traced at surface along strike for
up to 4km

·    Style and type of alteration and mineralisation is indicative of
potential for porphyry copper type deposits

·    Permitting process commenced by GSC for drilling authorisation

 

Next steps:

·    GSC to commence drilling at the Mostaza Mine following completion of
permitting approval process

·    The Mostaza Mine and greater Cerro Negro prospect is a compelling
exploration target with potential to:

o  significantly expand on the known mineralisation inventory at the Mostaza
mine both at depth and along strike

o  test of the known "near-mine" lenses to define new mineral inventory

o  identify new targets along the MFZ for preliminary testing

o  find further evidence for and vectors towards porphyry-style
mineralisation

 

Exploration programmes will employ geological mapping, geochemistry,
geophysics, petrography and other appropriate techniques, with a view to
defining targets for drill testing as soon as permitting allows.

 

Drilling plan

Historical drilling at Mostaza indicates that high-grade Cu-Ag-Au
mineralisation is open in all directions. A resource definition programme
targeting near-mine depth and strike extensions to the Mostaza mineralisation
will be the Company's initial focus for drilling. Significantly, the results
of GSC's recent due diligence mapping and rock-chip sampling suggests that the
structure hosting the Mostaza deposit extends up to 4km to the south. However,
outside of the immediate mine area this structure has not been drill-tested,
so the potential for significant up-scaling of the mineral inventory along
this trend will constitute the secondary exploration phase of the Mostaza
drilling programme.

 

Further, our due diligence research suggests that the style of high-grade
copper-silver-gold mineralisation seen at Mostaza is consistent with the upper
high-sulphidation zones of porphyry copper type deposits. This is coincident
with the location of the mine stratigraphically below the base of the
extensive Colorado lithocap alteration zone which the Company is targeting
regionally for porphyry copper deposits. The Company's drilling and
exploration programmes at Mostaza and Cerro Negro will be designed with the
aim of vectoring toward large-scale porphyry copper type deposits.

 

Sam Garrett, Chief Executive Officer of Great Southern Copper, said: "The
signing of the Cerro Negro option agreement represents an important milestone
for Great Southern Copper. We now have the option to become 100% owner of the
historical Mostaza Mine with an existing mineral inventory that has been
drill-tested and remains open for expansion in all directions.

 

"With the Mostaza deposit now in hand, we aim to commence drilling at the
soonest opportunity targeting both extensions to the existing high-grade
resource and upscaling the deposit to the south along the MFZ, as well as
testing the potential for large-scale porphyry copper type mineralisation.

 

"Alongside the permitting process for drilling authorisation at Mostaza Mine,
we are also progressing the permitting to commence drilling at Victoria and
Aurelia, all of which sets GSC up for a busy and exciting period of
exploration."

 

Cerro Negro prospect and geology:

On 22 February 2024, GSC announced the signing of a binding Letter of Intent
("LOI") with terms for the 100% acquisition of the Cerro Negro group of
exploitation concessions(1). Following a four-month technical and legal due
diligence period, the Company has finalised the acquisition of the concessions
with the signing of a Purchase Option Agreement. The Cerro Negro agreement
gives GSC the option to acquire 100% of the mining rights to 83 ha of granted
mining concessions that include the historical Mostaza Cu-Ag-Au mine.

 

Cerro Negro lies within the Company's Especularita project which is ideally
located close to national infrastructure including main highways, powerlines,
and towns. The project is situated 170km from the port city of Coquimbo, and
130km from Antofagasta Minerals' copper concentrate port at Los Vilos. The
area lies at an elevation between 800 and 1200m and is accessible year-round
(Figure 1).

 

The Especularita project is located within the north-south trending Cretaceous
metallogenic belt that includes Teck's Carmen de Andacollo Cu-Au Mine 80km to
the north, and Pucobre's El Espino Cu-Au development project 30km to the
south. At Especularita this under-explored belt intersects with a
northwest-trending corridor that controls the "Colorada" advanced argillic
lithocap and extends to the Piuquénes porphyry Cu-Au deposit in Argentina.

 

The Cerro Negro prospect includes the historical Mostaza Mine (Plate 1) which
consists of multiple elongated tabular bodies (or lenses or lodes) of
high-grade Cu-Ag-Au mineralisation hosted within a north-south trending,
west-dipping fault system known as the Mostaza Fault Zone (MFZ). Individual
copper-rich lenses vary from >2-10m in width and >100m in length with
mineralisation occurring as disseminations, veinlets and crackle networks of
quartz and sulphides within intensely phyllic (quartz-sericite-clay) altered
dykes, tuffisite and/or breccias which invade the MFZ. Petrology studies
indicate the high-sulphidation style copper mineralisation is dominated by
hypogene stromeyerite (copper-silver) and chalcocite, covellite, digenite,
bornite, plus lesser chalcopyrite and pyrite.

 

The MFZ varies from several metres to tens of metres wide and forms a major
regional feature visible over tens of kilometres. Hydrothermal alteration,
mineralisation, and brecciation has been observed along the MFZ for up to 4km
within GSC ground which represents a significant exploration target to
potentially up-scale the known mine mineralisation (Plate 2, Figure 2).
Untested copper mineralisation also extends up to 500-1000m to the east of the
mine area and is recognised at surface as oxide copper associated with quartz
and quartz-baryte veins and vein-breccias orientated sub-parallel to the main
MFZ structure (Plate 3, Figure 2). Mapping and sampling is on-going in these
areas to delineate targets for exploration drilling.

 

The geology of the Cerro Negro area (Figure 2) exhibits characteristics
consistent with the upper parts of a porphyry-epithermal mineral system,
including a felsic dome field and an extensive quartz-alunite advanced
argillic blanket (lithocap) which is underlain by structurally controlled
feeders of advanced argillic alteration zoning downward into the
phyllic-altered Cu-Ag-Au mineralised lenses (Mostaza). The presence of
mineralised tuffisites and breccias along the MFZ, some of them potentially
phreatic in origin, further suggests an underlying porphyry intrusive as the
source.

 

The Mostaza Cu-Ag-Au mine:

Mining of copper and silver from the Mostaza Mine is first reported in 1884
although there are no production records. In 1977, the mine was acquired by
the Jeraldo Gold Mining Company which commenced mining of oxide and mixed
copper ores from a small open pit at Lens 1 and from underground stopes at
Lens 2, producing a reported total of 17,500 tonnes of ore with an average
grade of 1.25% Cu, 77 g/t Ag, and 0.5 g/t Au.

 

From 1978 to 1981 Jeraldo Mining drilled 25 exploration holes (1,024m) to test
the continuity of the mineralised lenses at depth. Most of the holes were
angled at -70 degrees and the deepest hole was only 92 mts. Only 14 of the 25
holes reached their required depth to test the target mineralisation (Figure
3).

 

Drilling confirmed the depth extent of the lenses exposed in near-surface
mining and returned encouraging intercepts of Cu, Ag and Au (Figure 4, 5). In
1981 Jeraldo used these drill results, together with underground sampling and
interpreted cross-sections to calculate an internal non-JORC compliant mineral
resource estimate for Lens 1 and Lens 2 (The 1981 Historical Mineral Resource
Estimate - HMRE)(2). Assuming a cut-off grade of 1.5% Cu they obtained the
following results for sulphides (oxide and mixed resources are mined out and
not shown);

 

 

 1981 HMRE Category                  Metric Tonnes    Cu %            Ag g/t                   Au g/t
 Measured & Indicated Sulphide        190,600              1.2                  80                      0.45
 Inferred Sulphide                       63,000       na              na                       na
 Total for Lens 1 and 2               253,600

 

Table 1: Extract from the 1981 Historical Mineral Resource Estimate by Jeraldo
Mining. The resource calculation pre-dates the introduction of the JORC code
and therefore is non-JORC compliant. Refer to Cautionary note.

 

In 1982 the Mostaza Mine was acquired by the Centinela Mining Company, a
subsidiary of Antofagasta Minerals. Between 1982 and 1988 Centinela developed
a new open pit on Lens 2 and mined mixed and sulphide ores for processing at
their nearby Parral flotation plant until the company's focus shifted with the
acquisition and of the Michilla and Los Pelambres deposits. Centinela
production records are not available.

 

In 1983 Centinela produced an internal non-JORC compliant mineral resource
estimate for Lens 2 only (The 1983 HMRE)(3). Using a cut-off-grade of 1.5% Cu,
the exercise gave the following results for the sulphides (oxide and mixed
resources are mined out and not shown);

 

 1983 HMRE Category              Metric Tonnes                    Cu %  Ag g/t  Au g/t
 Total Measured Sulphide Lens 2               55,841              1.2   73.71   na

 

 

 

Table 2: Extract from the 1983 Historical Mineral Resource Estimate by
Centinela Mining. The resource calculation pre-dates the introduction of the
JORC code and therefore is non-JORC compliant (Refer to Cautionary Note).

 

Mining at the Mostaza Mine ceased in 1988 and the property was later acquired
by Boroquim S.A. in 2011. However, since that time the property has been
dormant with no further exploration activity on the property being carried out
since the 1980's drilling by Jeraldo Gold Mining Company.

 

 

 

 

Figure 1: Location of Cerro Negro prospect, Especularita Project, Chile.

 

Figure 2: Geology of the Cerro Negro prospect with rock chip geochemistry for
copper (%). Internal "dashed" area defines the Mostaza Mine area (Figure 3).
The Mostaza Fault Zone (MTZ) extends well south of the mine area and is
untested by drilling to date.

 

Plate 1: The Mostaza Mine is currently inactive. Open-pit mining has exposed
evidence of earlier underground workings. GSC aims to target its initial
drilling beneath the old workings to expand the known mineral inventory to
depth and along strike.

 

 

Plate 2: Quartz veining and vein-breccia with oxide copper outcropping within
the Mostaza Fault Zone south of the Mostaza mine. These areas have not been
drill-tested.

 

 

 

Plate 3: GSC Chief Geologist, David Hopper, mapping and sampling oxide
mineralisation associated with quartz and quartz-baryte veins east of the
Mostaza Mine. Note the abundance of copper oxide in this location. This area
has not been drill tested.

 

 

Figure 3: Map of the Mostaza Mine area adapted from the 1981 Historical
Mineral Resource Estimate, showing historical drill holes and geological
cross-sections on the pre-mining topography. To date mining activity has only
centred on Lenses 1 and 2, with minimal exploration and drilling outside of
the mine area.

 

 

Figure 4: Long section of the Mostaza Mine adapted from the 1981 Historical
Mineral Resource Estimate of Jeraldo Mining, showing Lens 1 and 2 and the
cross-sections and polygons used for estimation. Mineral resource estimates
are non-JORC. The results emphasise that the Mostaza Cu-Ag-Au mineralisation
is open in all directions.

 

 

Figure 5: Geological cross-section S-00 adapted from the 1981 Historical
Mineral Resource Estimate by Jeraldo Mining. Mineralisation remains open at
depth beneath the historic drilling intersections. (GSCU has not been able to
independently verify the historical channel sample or drill hole assay
results).

 

 

Cautionary note on references to Resources:

The Company cautions that all references to "resources", "mineral resources",
or "mineral resource estimates" in this RNS were calculated internally and
reported prior to the implementation of the JORC code and therefore are
non-JORC compliant. The Company advises that the resource categories used in
the historical estimates, for example "measured, indicated, demonstrated and
inferred", may not have the same meaning or degree of confidence as current
JORC categories. Historical records indicate that the quoted non-JORC
resources were calculated using the polygonal method based on underground
sampling, 1024m of drilling in 25 holes, and geological cross-sections and
level plans. GSC is presenting this information for historical context only
and is not treating it as a current mineral resource estimate. The Company has
not been able to independently verify the results of historical drilling or
mine channel samples.

 

 

References:

1.     RNS 0741E (22 February 2024): GSC expands Especularita Project with
two new agreements.

2.     1981 Mineral Resource Estimate; Internal report by Jeraldo Gold
Mining.

3.     1983 Mineral Resource Estimate; Internal report by Centinela Mining
Company.

 

 

 

Enquiries:

 

 Great Southern Copper plc
 Sam Garrett, Chief Executive Officer      +44 (0) 20 4582 3500

 SI Capital Limited
 Nick Emerson                              +44 (0) 1483 413500

 Gracechurch Group
 Harry Chathli, Alexis Gore, Henry Gamble  +44 (0) 20 4582 3500

 

Notes for Editors:

 

About Great Southern Copper

 

Great Southern Copper PLC is a UK-listed mineral exploration company focused
on the discovery of copper-gold and lithium deposits in Chile. The Company has
the option to acquire rights to 100% of two projects in the under-explored
coastal belt of Chile that are prospective for large scale copper-gold
deposits. In addition, the Company has the option to acquire rights to 100% of
a lithium project located in the Salar de Atacama district of Chile. Chile is
a globally significant mining jurisdiction being the world's largest copper
producer and the second-largest producer of lithium.

 

The two, early-stage Cu-Au projects comprise the Especularita and San Lorenzo
Projects, both located in the coastal metallogenic belt of Chile which hosts
significant copper mines and deposits, including Teck's Carmen de Andacollo
copper mine, and boasts excellent access to infrastructure such as roads,
power and ports. Significant historical small-scale and artisanal workings for
both copper and gold are readily evident in both exploration project areas.

The Company's Monti Lithium project is strategically located in the pre-Andean
region of Salar de Atacama which is Chile's premier lithium-producing region
with well-established lithium mining operations and infrastructure.

 

Great Southern Copper is strategically positioned to support the global market
for copper and lithium - both critical battery metals in the clean energy
transition around the world. The Company is actively engaged in exploration
and evaluation work programmes targeting both large tonnage, low to medium
grade Cu-Au and Li deposits as well as high-grade Cu-Au deposits.

 

Further information on the Company is available on the Company's website:
https://gscplc.com (https://gscplc.com)

 

Competent Person Statement

 

The information in this announcement that relates to exploration results is
based on and fairly represents information reviewed or compiled by Mr Sam
Garrett, a Competent Person who is a Member of the Australian Institute of
Geoscientists and a Fellow of the Society of Economic Geologists. Mr Garrett
is the CEO and a shareholder of Great Southern Copper PLC. Mr Garrett has
sufficient experience that is relevant to the styles of mineralisation and
types of deposit under consideration and to the activity being undertaken to
qualify as a Competent Person as defined in the 2012 Edition of the
"Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves". Mr Garrett has provided his prior written consent to the
inclusion in this announcement of the matters based on information in the form
and context in which it appears.

 

 

The Company confirms that it is not aware of any new information or data that
materially affects the information included within the Prospectus dated 20
December 2021.

 

Forward Looking and Cautionary Statements

Some statements in this announcement regarding estimates or future events are
forward-looking statements. They include indications of, and guidance on,
future earnings, cash flow, costs and financial performance. Forward-looking
statements include, but are not limited to, statements preceded by words such
as "planned", "expected", "projected", "estimated", "may", "scheduled",
"intends", "anticipates", "believes", "potential", "predict", "foresee",
"proposed", "aim", "target", "opportunity", "could", "nominal", "conceptual"
and similar expressions. Forward-looking statements, opinions and estimates
included in this report are based on assumptions and contingencies which are
subject to change without notice, as are statements about market and industry
trends, which are based on interpretations of current market conditions.
Forward-looking statements are provided as a general guide only and should not
be relied on as a guarantee of future performance. Forward-looking statements
may be affected by a range of variables that could cause actual results to
differ from estimated or anticipated results and may cause the Company's
actual performance and financial results in future periods to materially
differ from any projections of future performance or results expressed or
implied by such forward-looking statements. So, there can be no assurance that
actual outcomes will not materially differ from these forward-looking
statements.

 

 

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