Metallic Minerals Announces $6.3 Million Strategic Equity Investment by Newcrest Mining
La Plata Property Overview
The road accessible La Plata project covers 44 square kilometers within the historic high-grade La Plata mining district located at the southwest end of the prolific Colorado Mineral Belt. Mineralization is related to a large-scale precious metals + Platinum Group Element (“PGE”) porphyry copper system with associated high-grade silver and gold epithermal vein and replacement deposits.
In April 20222, Metallic Minerals announced an inaugural NI 43-101 mineral resource estimate for the project within the central Allard copper-silver porphyry deposit. The Company acquired the project in 2019 and, with confirmatory drilling and sampling, generated an inferred mineral resource of 985 million pounds of copper equivalent*contained consisting of 115.7 million tonnes at an average grade of 0.39% copper equivalent (“Cu Eq”) (0.35% Cu and 4.02 g/t Ag) using a 0.25% Cu Eq cut-off grade.
The Allard deposit remains open to significant expansion within the resource area with an updated estimate pending. In addition, the greater La Plata silver-gold-copper project remains underexplored and open to new discoveries of both additional copper porphyry centers as well as high-grade epithermal silver and gold systems.
Drilling in 2022 focused on resource expansion and resulted in the drilling of the longest and highest-grade hole ever encountered at La Plata of 816 meters of 0.41% recovered Cu Eq. Drill hole LAP22-04, ended in mineralization with the last 5.2 m returning of 5.4% recovered Cu Eq with elevated precious metals and PGEs (18.7 g/t Ag and 5.0 g/t Au+PGE).
Inferred mineral resources at the Allard deposit total 889 million pounds of copper and 15 million ounces of silver in a constrained model with 115.7 million tonnes at an average grade of 0.39% Cu Eq (0.35% Cu and 4.02 g/t Ag) using a 0.25% Cu Eq cut-off grade*. A updated resource estimate is in progress.
The 2022 Resource Estimate area incorporates a single porphyry intrusive-hosted sulphide system that is drill defined over a kilometer (“km”) in length, 400 meters (m) in width and to a kilometer of vertical extent and remains open to expansion in all directions. The resource area shows strong spatial correlation with large-scale anomalies in geophysics, spectral imagery and metal in soil values, providing a compelling basis for expansion of the 2022 Resource Estimate and for potential new discoveries in future drill campaigns.
In addition to the 2022 Resource Estimate, which remains fully open to expansion at depth and along strike, 16 untested potential porphyry centers have been identified on the greater La Plata project area, as well as target areas with potential for significant high-grade epithermal silver and gold.
Historical production from some of these high-grade structures exceeded 1,000 grams per tonne (“g/t”) silver and over 15 g/t gold with some of the richest deposits delivering true bonanza grades for silver and gold**.
The La Plata district has a long and rich history of mining with the first silver deposits discovered in the 1700s by Spanish explorers. High-grade silver and gold production has been documented from the 1870s through the early 1940s from vein structures, replacement bodies and breccia zones at over 90 individual mines and prospects. From the 1950s to 1970s, major miners Rio Tinto, Exxon and Freeport-McMoRan explored in the District focusing on the significant potential for bulk-tonnage disseminated and stockwork porphyry-hosted copper mineralization**.
From the 1950s to 1970s, major miners including Rio Tinto (Bear Creek) and Freeport-McMoRan (Phelps Dodge) explored in the La Plata district focusing on the significant potential for bulk-tonnage disseminated and stockwork hosted mineralization2. Freeport-McMoRan retained ownership of claims in the district until 2002 when they sold their holdings to the current underlying vendors during the lows of the last metal price cycle.
A total of 58 drill holes, totaling 16,930 m, have been drilled on the property since the 1950s which confirms the presence of a large-scale, multi-phase porphyry system with significant silver, gold and copper. This large-scale mineralized system is associated with a 10 km2, strong magnetic signature with intense hydrothermal alteration mapped in satellite based multispectral imaging.
The 2022 Resource Estimate, at the Allard deposit, covers a relatively small part of the overall 44 km2 property. The deposit is steeply dipping and roughly tabular in shape, occurring over 1 km in length, 400 m in width with over 1 km in vertical extent based on drilling to date. The Allard deposit remains open to expansion in all directions.
The Allard deposit is a significant potential source of copper, silver, gold, and platinum group metals, important for the modernization and electrification of the economy. In addition, the broader La Plata property is known occurrences of tellurium and rare earth elements, as Critical Minerals that are important for the green energy revolution2. Tellurium was produced as a by-product of historic high-grade gold and silver production in the district. These and other important metals noted in the district will be evaluated as part of ongoing exploration of the project.
Work during the 2022 field season focused on the Allard target area with the completion 1,730 m of expansion drilling, and resulted in the intersection of one of the top intervals for a North American copper project over the last several years. Metallic Minerals is the first Company to complete significant exploration on the La Plata project in 50 years. Since acquisition, the Company has systematically explored the project by employing an array of modern exploration techniques. Through this work the Company has identified new high-grade epithermal-style targets and over 16 potential porphyry style mineralized zones across the broader property including at the adjacent Copper Hill target area, 1 km from the Allard deposit.
Exploration plans for the 2023 field season are currently in the advanced planning stages. The program is expected to continue resource expansion drilling designed to build upon the success of hole LAP22-04 and to drill untested target areas for the potential of new centers of porphyry-style mineralization.
*See Technical Report on the Inaugural Mineral Resource Estimate for the Allard Cu-Ag Porphyry Deposit, La Plata Project, Colorado, USA with an effective date of April 3, 2022. The Mineral Resource has been estimated in conformity with CIM Estimation of Mineral Resource and Mineral Reserve Best Practices Guidelines (2019) and current CIM Definition Standards - For Mineral Resources and Mineral Reserves (2014). The constrained Mineral Resources are reported at a base case cut-off grade of 0.25% CuEq, based on metal prices of $3.60/lb Cu and $22.50/oz Ag, assumed metal recoveries of 90% for Cu and 65% for Ag, a mining cost of US$5.30/t rock and processing and G&A cost of US$11.50/t mineralized material. (1) CuEq* calculations are based on 100% recovery of all metals using the same metal prices used for the resource calculation. All figures are rounded to reflect the relative accuracy of the estimate. The current Mineral Resources are not Mineral Reserves as they do not have demonstrated economic viability. The quantity and grade of reported Inferred Resources in this Mineral Resource Estimate are uncertain in nature and there has been insufficient exploration to define these Inferred Resources as Indicated or Measured. However, based on the current knowledge of the deposits, it is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.
**Eckel, USGS Prof Paper 219, Geology and Ore Deposits of the La Plata Mining District, 1949.