The major asset associated with the Project, is a mineralized zone of phosphatic rock currently defined by surface outcrops, trenches and drilling extending over a strike length of more than 30 km and a width of more than 5 km on the west side of the Mantaro River. This area is known as the Mantaro Phosphate deposit. Mineralization is exposed as three roughly parallel exposures (mantos) trending in a NW-SE direction noted as the West, East and Far East zones in this report.
Estimated mineral resources contained in the West zone of the Property (4% P2O5 cut-off) as of February 21, 2010, are:
|Measured||5.548 MM tonnes¹ @ 10.8% P2O5|
|Indicated||33.975 MM tonnes¹ @ 9.9% P2O5|
|Measured + Indicated||39.523 MM tonnes¹ @ 10.0 % P2O5|
|Inferred²||376.265 MM tonnes¹ @ 9.0% P2O5|
- Tonnes rounded to the nearest 1,000 and grade to 1 decimal place.
- Inferred material reported with no cut-off and an assumed grade.
|East zone||425-435 MM tonnes @ 9% P2O5|
|Far East zone||280-290 MM tonnes @ 9 % P2O5|
These potential quantities and grade are conceptual in nature, there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in these targets being delineated as a mineral resource. However, should such conceptual resources be confirmed by trenching and drilling, the Mantaro Phosphate Property would rank as one of the most significant phosphate deposits in the world.
Mantaro Property (partial plan)
The Mantaro Phosphate Property varies in width from approximately 5 km to approximately 1 km. The portion of the Mantaro Phosphate Property where the Inferred Resource, is situated is characterized by a wide and elongated valley oriented from northwest to southeast. The valley is a remnant of a synclinal fold structure and higher structures on either side have formed by the weathering of the adjacent anticlinal structures.
A representative cross section of the syncline structure
The Mantaro Phosphate Property lies at the southern end of a highly productive and historically important Cu-Pb-Zn-Ag mining belt in the Central Peruvian altiplano. The Cerro de Pasco mine is located approximately 150 km to the northwest of the Mantaro Phosphate Property. Phosphate mineralization on the Mantaro Phosphate Property and immediately adjacent area is observed in surface outcrops and a series of trenches stretching over a distance of approximately 12 km. The phosphate mineralization is of marine sedimentary syngenetic origin and ranges from highly oxidized phosphatic sandstone to phosphatic limestones and mudstones. The phosphatic zone trends northwest-southeast and dips at 39º - 55º (typically 45º - 48º) to the northeast. Surface exposures average approximately 21 m true width.
After completing a Category 1 exploration drilling program in the second quarter of 2011, Stonegate applied for a more extensive Category 2 exploration permit in order to obtain a better understanding of the size, grade and positioning of the deposit prior to undertaking a pre-feasibility study.
The Category 2 permit would allow exploration activities within specific non-metallic concessions. The planned program consists of two activities: approximately 18,000 metres of diamond core drilling from 105 drill platforms; and 19 exploration trenches. Each drill platform and trench will subsequently be remediated to its original condition. The exploration program is expected to provide significant data on all phosphate zones on the property. Previous drilling and trenching, on which published mineral resources are based, was focused primarily in one zone.
The Company was notified on February 10, 2012 of the February 8, 2012 approval by the Peruvian Ministry of Energy and Mines of the semi-detailed Environmental Impact Assessment related to the Category 2 exploration program. This was an essential step in completing the requirements to commence the exploration program. However, in addition to this government approval, community permission must be obtained before further work can be conducted. Given the continuing uncertainty caused by the current social unrest and political tensions relating to many mining projects in Peru and the Company's current cash balances, the Company elected to delay work at the Mantaro Project.
A paved highway and railway connects Huancayo with Lima. Access to the Mantaro Phosphate Property is primarily from the town of Sincos via gravel roads to the village of Aramachay and then via rough tracks to a number of small villages. Regional infrastructure is generally excellent. High tension and local electrical distribution lines cross the Mantaro Phosphate Property. The Doe Run smelter at La Oroya, approximately 60 km to the northwest, is a potential source of sulphuric acid for fertilizer manufacture. Huancayo is a major regional centre with a population of approximately 460,000 people and offers excellent services. Huancayo is connected to Lima and the port of Callao by a major national highway and a railway.