A new induced polarisation (IP) survey undertaken by Freehill Mining (ASX: FHS) at its Yerbas Buenas magnetite project in Chile has detected a second large potential copper sulphide structure, ahead of a maiden iron ore resource estimate due later this month.
Late last year, the junior explorer commissioned ground magnetics and IP surveys at its wholly-owned project targeting copper mineralisation, which is common at surface in the area.
In February, the company announced it had uncovered a large anomaly in the north-east portion of the survey area. It also identified a second potentially large structure just 800m to the south and commenced a new survey to assess its size and geometry.
Freehill today confirmed the identification of this second structure, which it believes could potentially contain copper sulphide as well as gold mineralisation.
The company is currently planning a drilling program for a newly-identified magnetite structure and said it would now incorporate diamond drilling of both the northern and southern IP structures to confirm the mineralisation.
Freehill chief executive officer Peter Hinner said it was clear the company has a “great project on its hands” and is only “just starting to realise the potential” of Yerbas Buenas’ mineralisation.
Mr Hinner told Small Caps the company’s main focus would remain on magnetite, but if this upcoming drilling program can prove the newly identified IP structures are copper sulphides, then it will “start progressing that part of the program as well, probably in parallel to the magnetite”.
Upcoming drilling program
In December 2018, Freehill completed a maiden reverse circulation drilling program on an area in the southern portion of the project it calls YB6, with assay highlights including an 18m intersection of near pure magnetite less than 50m from surface.
The company is also planning to announce a maiden JORC mineral resource estimate for the Yerbas Buenas project by the end of April.
Although, now that Freehill has discovered this larger magnetite structure to the south, Mr Hinner said it will be the next target for an updated JORC resource.
He said this upcoming drilling program, which will now also include the two potential copper sulphide structures, is anticipated to start around July.
Surface sampling program
Mr Hinner said the company also planned to undertake a gold surface sampling program in the northern part of Yerbas Buenas’ project area, which would include the northern IP anomaly.
This program is anticipated to start around the “middle of the year”, he said.
“This northern half has a lot of artisanal gold and copper diggings on it. Nothing is active at the moment, but there’s little tunnels and shafts and old diggings where the old timers had been mining for more gold, but copper as well,” Mr Hinner said.
While Freehill’s primary focus at the Yerbas Buenas project is magnetite exploration, Mr Hinner said the company “always knew at some point” it would begin to focus on copper and potentially gold.
“We’d always known about the artisanal mining up in the mountains but exploring and trying to develop copper and gold projects always takes a little bit more time than something like magnetite, which is technically quite straight forward,” he said.
“It was always there but we wanted to make magnetite the first thing that we would develop because it was far easier.”
Mr Hinner said the company was in the “right country and the right region” to be able to explore both avenues, since Chile produces about a third of the world’s copper and also holds about 28% of the world’s copper reserves.