GEO MINERALS LTD. announce that it has executed a lease-option agreement with Bronco Creek Exploration Inc. (“BCE”) to earn a 100% interest on the Copper Springs and Silver Bell West porphyry copper projects, both located in south-central Arizona.
The Copper Springs property, located approximately 90 miles east of Phoenix, consists of 216 mining claims and 640 acres of fee land for a total of more than 5,000 acres in the Globe-Miami District – home to current mining operations by Quadra, BHP Billiton, Freeport-McMoRan, and others. The Silver Bell West property, located roughly 30 miles northwest of Tucson, consists of 188 mining claims on more than 3,700 acres immediately adjacent to Asarco’s active Silver Bell Mine. The acquisition of these two properties prominently positions the Company in two classic Arizona mining districts where Geo believes reinterpretations of district geology by BCE geologists presents the opportunity for significant new porphyry copper discoveries.
The Copper Springs project is the product of several years of research by BCE geologists in the Globe-Miami District that has a combined production and reserves of approximately 16Mt of copper metal. New geologic work has led to the recognition that the district’s known copper deposits are the faulted and tilted portions of a cluster of large porphyry copper-molybdenum systems centered on a Laramide-age granitic pluton. Of the porphyry centers identified in the district, a southern center (The Copper Springs porphyry) has the largest root footprint and the largest, most productive capping vein system (approximately 10.5Mt at approximately 5%Cu production and approximately 67Mt at approximately 1.3%Cu resources) of any other in the district. Through the application of these and other new geologic insights, BCE has further recognized that the structural blocks that contain the central portion of the southernmost system are projected to lie beneath gravel cover within the BCE property position. The primary exploration targets are structural blocks analogous to the main Miami-Inspiration deposits (approximately 10Mt Cu production/resources) that include the buried Miami East deposit just north of the Copper Springs property (reported by Long in 1996 to contain 181Mt at 1.35% copper). These blocks lie at intermediate to higher structural levels within the Copper Springs porphyry center and target mineral assemblages suspected to contain higher primary copper grades within reactive hosts rocks and favorable conditions for supergene enrichment. A first-stage drill test by Geo is slated for fall 2009, with BCE serving as initial operator.
At the Silver Bell West property, Geo is targeting porphyry copper and copper skarn mineralization in structurally down dropped blocks lying adjacent to exposed mineralization currently being exploited by Asarco.
The Silver Bell District has produced more than 176 Mt at an average grade of 0.63% copper from skarn, secondary enrichment blankets, and oxide copper deposits associated with a Laramide porphyry copper system, and had 1990 reserves reported in Long, 1995 of 185Mt at 0.61% copper. Field work conducted by BCE geologists in 2007 revealed several lines of evidence pointing to multiple target areas within two, largely untested zones of possible skarn and porphyry-style copper mineralization. Zone 1 lies in the southeast portion of the property, where copper-rich skarn mineralization hosted in Paleozoic carbonate-rich units and related porphyry-style mineralization are projected to underlie outcropping mineralized rocks composed of quartz-chalcopyrite vein swarms in Laramide igneous rocks and gold-bearing chalcopyrite-chlorite-specularite +/- quartz veins in Mesozoic sedimentary rocks in the adjacent contact aureole. Zone 2 comprises the western portion of the property, where new alteration mapping combined with the faulted and offset portions of structural blocks interpreted to contain the known trends of porphyry copper and skarn mineralization project beneath cover rocks to the west of outcroping mineralization. Ten drill sites have been permitted on the property, and Geo intends on conducting a first-round of drill test of Zone 1 in 2009, with BCE serving as initial operator.
Terms for Copper Springs are for Geo to incur $2,750,000 in work expenditures, pay cumulative advanced royalty payments of $505,000, issue a total of 3 million common shares plus issue 1.2 million warrants over the 5 year term of the agreement. A royalty of 2.5% with a provision to buy back 0.25% for $1.5 million anytime before a feasibility study and a further 0.25% buy back for $3.5 million any time prior to production will apply.
Terms for Silver Bell are for Geo to incur $2,000,000 in work expenditures, pay cumulative advanced royalty payments of $505,000, issue a total of 800,000 common shares over the 5 year term of the agreement as well as grant a royalty of 2.5% with a provision to buy back 0.50% for $1million by the seventh anniversary.