AS part of a comprehensive review of the known resource at Marengo Mining’s Yandera Copper Project a new structural model that controls mineralization is becoming evident. This new understanding is being used by Marengo to predict where new discoveries and an increase of grade are likely to occur.
This new model has been used to great effect and has resulted in new discoveries of potentially higher grade outcrops at Rima Block. Extensive mapping and sampling in this area has revealed potential wide zones of mineralization and alteration.
These discoveries have given Marengo’s new management team confidence that new and potentially higher grade mineralization can be found and brought into additional resources through implementation of an intensive geologic work program.
This work was undertaken as part of a comprehensive review of all aspects of the feasibility work. Marengo committed to a feasibility study for development of Yandera in 2008 based on its published copper resource, the prevailing copper price and state of global financial markets at the time.
Since then resource markets have increasingly become more competitive, with the copper price falling, funding for exploration and development decreasing, and capital and operating costs escalating, bringing into question the economic viability of development of the 2012 resource.
Marengo initiated optimization programs on the resource by completing a 9-hole drilling program at Dimbi in 2013, targeting higher grade mineralization. Separately, it also looked at different throughput scenarios in a bid to improve the overall economics.
During the 2014 June quarter the company’s management completed a comprehensive review of all aspects of the feasibility work and concluded that, although progress had been made, and further optimization of the resource and development options had been considered, the project would not currently yield the economics desired and, therefore, the feasibility work would not be completed.
However, during inspection of the 2012 resource, and further drilling, mapping and survey programs completed since, management remains positive about the mineral potential.
Management recognizes that new and better resources are required to elevate the deposit to one that is economically robust and is implementing a three year plan. This year it is focusing on understanding new ideas and pursuing potential new discoveries. This is being carried out through training, comprehensive data and field reviews, mapping and sampling of new areas, and potentially exploratory drilling.
Year two will include a larger scale mapping and sampling program to continue to define new targets, which will be prioritized and drilled after completion of drilling and field studies. Year three is intended to be used for proving up new resources and completing an updated resource model, as well as potentially finalizing an updated feasibility study.