Game on at big copper porphyry play

This explorer is just sinking its teeth into its new 22,500m drilling permit on its “mountain of metal” – and has already found evidence of a second porphyry system. Ngaire McDiarmid reports.

Game on at big copper porphyry play Game on at big copper porphyry play Game on at big copper porphyry play Game on at big copper porphyry play Game on at big copper porphyry play

When Inca Minerals managing director Ross Brown refers to the company's flagship Chanape project in Peru as "Mount Metal", it is an apt description.

The company is coming to grips with 1.3 vertical kilometres of mineralisation at the Chanape gold-copper-silver-molybdenum-lead-tungsten project.

Picture if you will the Sydney Harbour Bridge tilted on one end, pointing its 1.1km length up into the sky.

The mineralisation already established at Chanape is longer than this, it's much taller than the world's highest building as well - and new drilling is revealing more exceptional results at the project.

The company was boosted in August by a $1.3 million investment by leading mining investment fund Resource Capital Fund VI (RCF).

Inca is also gaining the interest of analysts and global mining houses alike - a major was on site at the time of going to press.

Brown said now the company's semi-detailed Environmental Impact Assessment (sdEIA) permit had been approved, allowing 22,500m of uninterrupted drilling over two years to commence. It's a case of "game on!"

Initial drilling has already produced a technical breakthrough - evidence of a second porphyry beneath the new Cerro Ver Breccia.

Cerro Ver (Spanish for Hill View) was recently intersected and is open-ended at depth and is the largest breccia at Chanape drilled to date.

Highlights from Cerro Ver announced in September revealed a down-hole interval of 226.8m from 39.7m in one hole and 94.3m down-hole from 24.5m in another hole.

Clasts, or fragments in the breccia, contained not just porphyritic material but veined porphyritic material, evidence of a porphyry system in the near vicinity.

"We've gone some way in answering one of the remaining questions about Chanape," Brown said. 

"Is there a second porphyry system at the summit? I think we can say yes to that. The identification of veined porphyritic intrusive clasts in Cerro Ver is a breakthrough, albeit of a technical nature.

"Ultimately, if Chanape does have more than one porphyry - it very good news for our shareholders."

Brown is excited about the breccia itself, not just from what it heralds from below. In surface sampling Inca knows that Cerro Ver is gold-bearing. If it proves to be gold-bearing at depth then it's a significant addition to the potential resource inventory building at Chanape. At the time of going to print the assay results are pending.

"It's our largest breccia drilled to date," he said.

"It's very similar in appearance to Breccia 8, which has strong gold and silver grades over a hundred metres. If at depth Cerro Var behaves like Breccia 8 does and transitions to a copper, gold, silver breccia like Clint, then it'll be a significant discovery indeed."

"Yep, Cerro Ver is looking quite the goods," Brown concludes. "It's a window to what lies below and it's a potential gold, silver, copper deposit in its own right."

Inca has already identified about 100 breccias at Chanape and Brown believes more will be found. The Clint Breccia was a blind deposit. Just how many more "Clints" are there at Chanape?

Brown uses the unusual and perhaps unorthodox analogy of a lava lamp to describe breccia pipes. 

"Breccia pipes are like the floating jells of a lava lamp," he said. 

"They rise up in an amorphous super-hot fluid mix of gases and metals, at times long and attenuated, at other times tear-shaped and cut off from below.

"The anomaly is useful in visualising the difference between the Clint/Pipe 8 breccia complex and Cerro Ver. With the former, a gap exists between it and the porphyry below. By the looks of it, Cerro Ver may have kept its connection to the underlying porphyry." 

The first hole drilled in the new drilling campaign at Clint in August found a 68m interval at 1.98% copper, 0.84gpt gold and 42.9gpt silver from 234m.

In Breccia 8 above Clint, drilling had already intersected 108m at 2gpt gold, 41gpt silver; and 10m at 5.3% copper, 0.015% molybdenum, 0.96gpt gold and 83.68gpt silver. Breccia 8 is now understood to be upper part of the Clint Breccia.

"The Clint/Pipe 8 breccia complex is the leading candidate for a maiden resource," Brown said. "The hole density is sufficient and there are multiple mineralised sections."

Chanape is in the Andean mountains but close to Peru's capital Lima and only 30km from the Chinese-owned 2.15 billion tonne copper-molybdenum-silver Toromocho porphyry mine.

Brown said Chanape was emerging as an exceptional porphyry prospect with world-class intersections. "Another Toromocho? Only time will tell," he said.

"Our third deep hole at Chanape (CH-DDH011) produced 284m at 0.32% copper, 83ppm molybdenum and 6.73gpt silver. The same metal assemblage as Toromocho. With known mineralisation at the summit and with our deepest hole, CH-DDH011, we have known mineralisation extending over a vertical distance of 1.3km," he said. "And it's open-ended!"

Perhaps use of the oft bromide idiom "world-class" is not without foundation when describing Inca's Chanape porphyry discovery.

"It's hard to imagine what a 1.3 kilometre vertical column of mineralisation would look like," Brown said.

"Dig a hole around it and the hole would be more than twice the depth of the Super Pit in Kalgoorlie. Pile dirt around it and you've got a heap four times the height of the Darling Ranges."

Inca now has a large drilling program ahead of it, which was been enabled through the granting of the sdEIA permit.

"This permit took a lot longer than we anticipated but it was worth the wait. Now that it is granted - well - quite simply, it's a game changer," Brown said.

"It allows 22,500m of drilling across 59 platforms. This will enable sustained drilling. With sustained drilling we will have near-continuous news flow for some time to come."

Each hole so far seems to validate and strengthens the concept that there's something very special happening at Chanape. It seems certain that Inca has proven the concept of the very well preserved multiple porphyry system.

"There are solid grades of gold, copper, silver, molybdenum, lead and tungsten at Chanape. I call it Mount Metal," Brown said. "And it is a pleasure to watch our geologists avidly log the core laid out in front of them. Yep, there's a real buzz in the camp."

Inca's core-cutting crew preparing samples for geochemical testing at Chanape.

Inca's core-cutting crew preparing samples for geochemical testing at Chanape.

Brown said the current drilling campaign would focus on piecing together the mineralisation that Inca had identified already. "The idea is to establish a JORC 2012 maiden resource in a short time frame, certainly within the time frame of the permit itself," he said.

"We can probably build individual resources around the breccias - Breccia 8/Clint could well be our first resource, Cerro Ver could be another one, and Breccia 10/11 will potentially be another."

The company has been buoyed by both recent shareholder support and the investment by Resource Capital Funds (RCF).

"No doubt RCF use a strict set of criteria when selecting an exploration play to invest in. I am glad and indeed humbled that Chanape has met this criteria. I may assume RCF look for projects with solid results, with significant growth potential and a likelihood of the ultimate success, production," Brown said.

"Our shareholders have also demonstrated their support for the company with an 87% take-up of a recent rights issue, a result which we are very thankful for and a little surprised by given the nature of the equity markets."

The $2.15 million rights issue was fully underwritten by Patersons Securities.

In parallel to drilling Inca is investigating partnering with a major mining company to speed up development at Chanape. Over a dozen majors have signed confidentiality agreements to date and a good many have visited the site. They seem patient to watch Inca drill for the time being.

"A major mining house operating under the same permit would certainly speed up drilling," Brown said.

"This would obviously hasten the development of Chanape with the consequence of an expeditious delivery of a possible maiden resource."

Despite Chanape's position in the mountains, Brown said operating conditions are benign.

"Chanape is a high altitude project, a constant reminder of this is the low oxygen, but otherwise the conditions aren't difficult," he said.

"We've not dealing with rich vegetation or thick soil cover, there is no habitation anywhere near the project, the terrain is never overly steep so rig access is pretty much unlimited across the project. You might not expect this in the Andes, but it true for Chanape."

Inca now owns and runs its own exploration camp at Chanape and has established a committed local workforce. 

"From the knives and forks to the geos' tent and core-cutter, Inca owns its own camp," Brown said.

"It's comfortable, it's conducive to work-excellence and it's cost effective.

"Yep, we have a good team on site who enjoy being on-site. I feel this shows in the well-running and quick progress of the drill campaign."

As drilling progresses, Brown is looking forward to grasping the full scale of Chanape's potential.

"The magnitude of this project is hard to fathom," he said.

"Over a hundred breccias, probably two porphyry centres defining one very large multiple-porphyry system, 1.3 vertical kilometres of mineralisation and a geophysical target zone 2.5km x 1.5km, a history of past polymetallic vein mining, copper, gold, silver, molybdenum, lead and tungsten. Mountains of metal at Mount Metal? Could well be!"



SHARE PRICE AS OF September 11 : $0.009

Suite 1, 16 Nicholson Rd
Subiaco WA 6008
Ph: +61 8 6145 0300
Fax: +61 8 6145 0301

Chanape gold-silver-copper porphyry project; Moquegua copper-molybdenum-gold porphyry project.

$10.8 million (at press time)

1,076.8 million

719.8 million






The Firm
The firm has merged Australian experience with potential in Peru. Unlisted Peru-based Inca Minerals Ltd was set up in 2009. It merged with ASX-listed Condor Minerals (a spin-off of Carrick Gold) in 2012, and changed name to Inca Minerals (ASX: ICG) the same year. Inca is a Perth-based resource company with an exciting portfolio of projects, featuring its flagship Chanape gold-silver-copper porphyry project in Peru.

The Strategy
Inca's strategy is "growth through discovery". Inca aims to increase shareholder wealth though exploration success. Its board and executive team is committed to the exploration process - of meticulous planning and execution; to the deployment of funds in the identification and development of meaningful resource projects. Inca's technical team has delivered a significant discovery in Chanape. The development of Chanape and the motivation and skill-set to make future discoveries is central to Inca's identity.

The Shareholders
Resource Capital Fund VI L.P 12.074%
Zoric & Co Pty Ltd 3.504%
Ross Brown 2.254%
Stephen Chewter 1.316%
Pathold No. 77 Pty Ltd 1.280%


The Directors

A geologist by profession, Ross has over 30 years' experience in mineral exploration in Australia, Asia, Africa and South America and has worked in a broad range of commodities, including gold, base metals, uranium, phosphate and diamonds. Brown has a rare ability to recognise the commercial potential of exploration projects and geological process, and has a proven track record of bringing technical-based exploration concepts and projects to market.
In 2009 Brown co-founded the gold/copper exploration company, Mystic Sands Pty Ltd, which was established to conduct exploration in Chile, South America. 

In 2006 Brown developed an innovative exploration model for "Langer Heinrich-style" uranium mineralisation that was used as a basis for global project acquisitions in 2006 and 2007. These projects were packaged into Oklo Uranium Limited, which completed a successful $8M IPO on the Australian Stock Exchange in May 2007.

In 2001 Brown created Central Kimberley Diamonds (CKD), which was listed on the German stock exchange, raising $3.9M. The company enjoyed several technical and milestone successes including the discovery of a large diamond-bearing gravel deposit and the production of diamonds from its own mine. 

Brown turned his attention to Peru in 2009 and assessed the potential of more than 100 projects. He immediately recognised the great potential of mineral discovery in that country and the potential of Inca's lead project, Chanape, from being a known polymetallic deposit to being that of a potentially large gold-silver-copper porphyry deposit.

Brown was the co-founder and Managing Director of Urcaguary Ltd, the Company's fully owned subsidiary (formerly called Inca Minerals Ltd) and he became the Company's Managing Director after its merger with Condor Metals.

Dr Walawski has in excess of 20 years' experience in governance and senior management. He is a former member of the ASX Supervisory Liaison Committee, the Federal Australian Government's Mineral Exploration Action Agenda Group and the WA State Government's Tax Review Reference Committee.
He has previously held positions as the Chairman, Deputy Chairman & Chief Executive of the North West Iron Ore Alliance Pty Ltd, Chairman of Special Olympics Australia (WA), Chief Executive of the Association of Mining & Exploration Companies and Director of CPA Australia (WA).
In addition to his position as Director and Company Secretary of Inca Minerals Limited, Dr Walawski's current commitments include chairman of private equity investment firm FAB Industries Pty Ltd and facilitator of the AICD Company Directors Course (Financial Literacy and Financial Strategy modules).

Lloyd has over 30 years of experience in both technical and financial expertise relevant to mining and exploration companies, together with a firm grounding in equity analysis and funds management. A mining engineer by training, he has operating experience in gold, base metals and coal operations in Australia, South Africa and the United Kingdom.
Lloyd is part owner of the Element group, a Perth-based boutique advisory and funds management group focused on the resources sector. Through the Element group, Lloyd provides strategic advice and fundraising services to both listed and unlisted companies (predominantly mining and exploration companies) using both equity and mezzanine instruments.
Prior to establishing Element in 2008, Lloyd was an Associate Director at the Rothschild Group where he helped establish the Golden Arrow Funds I and II, the latter fund becoming the ASX-listed LinQ Resources Fund. At the time of his departure from LinQ, the fund was one of Australia's largest listed resource funds with funds under management of over $475m. He has held a number of senior positions at Australian resource-focused stockbroking firms including Research Director at Hartleys and Resources Analyst at Eyres Reed.