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Exploration Activities
Introduction
Company has chosen to extend its asset base by pursuing advanced exploration opportunities to complement cash flows from royalty rights.
In 2004 Royalco identified the Philippines as providing outstanding opportunities with advanced exploration potential at low entry cost. Following that assessment, the Company initiated discussions with Oxiana Limited. Subsequent to reviews of projects and assessment of the management group, the Company negotiated to acquire Oxiana’s Philippine interests.
The Filipino tenement package, in our opinion represents one of the most attractive porphyry copper targets globally available, with our particular interests being associated high grade epithermal gold systems. These areas have been accumulated over a substantial period of time and represent advanced exploration plays.
The Philippines Projects
Royalco’s Philippine exploration assets comprise those of Oxiana Philippines Incorporated and related entities.
The summaries set out below are of the principal projects.
GAMBANG PROJECT
The Gambang project area is strategically situated within the Central Cordillera of Northern Luzon in the geological terrane known as the Philippine Mobile Belt. The mineral endowment of the belt is high due to its tectonic setting, offering world class prospectivity.
Deposits immediately north of this tenement include Far Southeast, Lepanto, Victoria, Guinaoang and Suyoc. To the south of the tenement lies the old goldfields of Baguio and the porphyries at St Tomas/Santo Ni-o, a belt stretching approximately 50 kilometres, with Gambang covering the strategic and under-explored central portion.
Oxiana has been active in the Gambang area since 1995 and has conducted exploration comprising stream sediment and soil geochemical sampling, geological mapping, and geophysical surveys. This exploration has delineated seven target areas with porphyry copper-gold style mineralisation.
The Cableway Prospect is centred on the largest of a cluster of gold and copper anomalies that were defined by a soil geochemical survey. The surface alteration comprises minerals that are commonly observed at high-levels in porphyry copper-gold systems. Drillhole GBD-9, drilled at Cableway, yielded 0.27g/t Au and 0.22% Cu over a 60m interval down hole from surface, followed by another 20m interval grading 0.42g/t Au and 0.49% Cu. This drillhole shows evidence of grade increasing systematically at depth and offers significant potential to the west towards elevated geochemical sampling.
The Manga Prospect lies near the northeast boundary of the Gambang application area and south southwest of the Suyoc Mines region. It is a copper-gold breccia prospect that is developed within strongly clay-altered diorites. Reconnaissance stream-sediment and grid-based soil sampling by OPI generated both copper and gold anomalies in Manga Creek and the adjacent area.
PAO YABBE PROJECT
The Pao Yabbe project area is situated in the Southern Sierra Madre Ranges of Northern Luzon and adjoins the Didipio copper gold project of Oceana Gold Limited (reserves of 23.7MT @ 0.65% Cu and 1.8g/t Au)
The regional geology of the area is dominated by a sequence of early Tertiary age volcanics of alkaline composition. This sequence was intruded by suites of intrusives of both calc-alkaline and alkaline compositions in the mid-Tertiary. Base and precious metal mineralisation is associated with these intrusives. Modern mineral exploration commenced in the area in the 1980s and exploration by Oxiana commenced in 1998. Geochemical, geological and geophysical exploration programs have resulted in the delineation of three main prospect areas in the north of the project area, Ambedbed, Manidyo and Digyan, and one in the south, Yabbe.
There is good exploration potential for high-sulphidation style Cu-Au mineralization and deeper porphyry Cu-Au mineralisation within the Pao-Yabbe tenement areas.
A chip sample from the Manidyo vein assayed 49.42g/t Au, 348g/t Ag, 3.94% Cu , 1.7% As.