Chakana Copper (PERU) - Drilling 13 New High-Grade Copper Targets

Chakana Copper Corp. is a Canadian-based minerals exploration company and through its wholly-owned Peruvian subsidiary, Chakana Resources S.A.C. is currently advancing the Soledad project near Aija, in the Ancash region of the highly prolific Miocene mineral belt of Peru. The company’s Executive Management Team and Board have a proven track record of success in the minerals industry from capital raises, exploration, discovery, development, and monetizing the asset through divestment.

Matt Gordon caught up with David Kelly, President, CEO, and Director, Chakana Copper. Mr. Kelley is an economic geologist, and an exploration geochemist with over 25 years of international exploration experience across the Americas, Central Asia, and Australasia.

Most recently, David was responsible for developing the exploration program at Las Bambas for MMG as the General Manager, Exploration - Americas. He previously worked for Oz Minerals, Zinifex, Newmont, WMC, BHP, Westmont Mining, and Gold Standard. He was directly involved in the discovery of the Zuun Mod Mo-Cu deposit in Mongolia, the Wayamaga Gold deposit in French Guiana, and the High Lake East VHMS deposit in Nunavut.

His educational credentials include a B.Sc. degree in geology from Colorado State University and an M.Sc. degree in geology/geochemistry from the Colorado School of Mines. He previously served as President of both the Society of Economic Geologists Foundation and the Association of Applied Geochemists.

Company Overview

Chakana Copper is a minerals exploration company that is currently advancing the Soledad project near Aija, in the Ancash region of the highly prolific Miocene mineral belt of Peru. The company’s goal is to find and advance mineral projects to an economic resource within a single commodity cycle for further development by mid-tier and/or major mining companies. It is highly selective in its approach, seeking de-risked projects that have the characteristics of large above-grade mineral systems with significant upside potential.

The company employs the latest technological innovations to test the upside potential of projects with aggressively funded exploration programs. The company was founded in 2011 and is headquartered in Vancouver, Canada. The company is listed on the Toronto Stock Exchange (TSX-V: PERU), the OTC Markets (OTCQX: CHKKF), and the Frankfurt Stock Exchange (FRA: 1ZX).

Chakana Copper is a junior explorer focused on the Soledad project in Peru. In January 2022, the company announced its initial resource on the discovery. The discovery features high-grade copper-gold-silver that starts at the surface and is hosted in tourmaline breccia pipes. The project is based in an active mining district within the Ancash province of Peru, which is also home to the Pierina world-class gold mine that was operated by Barrick Gold for a number of years. The district also features the Antamina mine, the largest operating mine in the country.

Cash Position

Chakana Copper recently announced a $7M private placement, out of which, it has already closed $5M in the first tranche. The company is working on closing the second one soon. It was able to acquire financing despite the challenging market conditions. Multiple significant investors, along with existing shareholders participated in the capital raise. Gold Field was also a part of this financing. The company was able to bring in several new investors as well. This was an expensive capital raise for the company.

Chakana Copper provides investment opportunities in a de-risked project that has already demonstrated the potential economic impact of the tourmaline breccia pipes.

Notably, the company’s management team and board collectively invested $243,000, while Gold Fields invested $900,000. Collectively, the management team and board along with Gold Fields have invested $12M so far. The company continues to add value through the drill bit and is looking to reward investors over time.

Collectively, the management, along with Gold Fields invested $1.1M in the current financing round. The company’s representatives spent 3 days with Gold Fields and the latter brought in 5 highly-skilled people from its global exploration program, further demonstrating Gold Fields’ support for the Soledad project.

Drill Operations

Chakana Copper’s drill operations have led to a 6.7Mt copper equivalent grade of 1.88g/t or 2.77g/t gold equivalent resource. The higher-grade cut-off is at 3.3Mt of 2.75% copper equivalent, a very high grade that comprises drilled massive sulphides.

Interestingly, the company has tested 18 out of 155 targets so far. This accounts for around 12% of the total targets. The company anticipates that additional discoveries could dramatically change the scope and vision of the project. It is possible that this could be a tier-one discovery.

The company isn’t looking to develop a small resource as the upside potential is present and ready to be tested. It had decided to aggressively drill and test out some of the step-out targets. The drilling program commenced yesterday. The company currently has the funds to test out 13 additional targets. It should be noted that the company’s drilling operations are focused on the fully-permitted north side of the project.

The company is currently working on acquiring the permits for the south side of the project. It has plans to focus on the south side next year in order to test out potential targets. Following the end of the exploration program, the company would be in a strong position to dictate the project’s direction.

The initial resource showed that the project features 7 breccia pipes that form the open-pit and underground part of the resource. 3 of the breccia pipes are extremely large, hosting 6Mt out of the 6.7Mt hosted in all 3 pipes. The deposit also features 4 smaller breccia pipes that can potentially add bigger tonnes. The company has found that the smaller breccia pipes increase in size at depth.

It has worked extensively to refine the targeting criteria. The company now has a highly-robust multi-parameter response to the larger breccia pipes. In order to chase the bigger signatures, the company has invested significant time and resources in developing the project geophysics. Project modelling has led to the selection of 13 targets that need to be tested. The company anticipates that successful exploration of the 13 targets could lead to exceptional results, which could dramatically increase the project’s scale.

Underlying Geology

Based on previous work, Chakana Copper realised that targets can be tested through limited drilling. It worked on optimising the number of targets that can be tested by stretching the drilling metres over a broader list of targets. Interestingly, most of the targets will be tested with 1-2 drill holes in order to get below the oxidation where the sulphide is likely present, hitting the centre of the shallow extent of the anomaly.

The company is looking to access the top part of the system as opposed to drilling deep holes. It is already known that the deposit is open at depth and continuous. As a result, the company is focused on shallow testing, which also maximises the number of targets.

Once the 13 targets have been tested, additional drilling will be carried out based on the results. Currently, the company is not looking to conduct any inferred resource drilling. It is looking to gain access to the underground portion of the deposit as soon as possible.

At the same time, the company is focused on acquiring permits for the south area. There are a number of exciting targets in the south, including a massive intrusion hosted in a bulk-mineable anomaly, which has been dubbed the Mega gold anomaly. Once the 13 targets have been tested, the company is looking to test out this anomaly.

Geophysics has helped the company understand the structural controls on the location of the breccia pipes. The company has drilled out the 7 breccia pipes and has collected extensive fresh data on the size and volume of the geophysical anomalies. It has also carried out highly-detailed ground magnetic data sets along with gradient array IP (Induced Polarisation) survey over the entire extent of the 12 square kilometre tourmaline breccia pipe field.

Currently, the company has 35 individual 3D IP grids over each significant target within the 12 square kilometre area. This has led to the accumulation of a massive amount of data, which can be utilised towards understanding the structural setting. The company has plans to focus on the untested areas and scale up the deposit. The company has found exceptional material grades in the breccia pipes. In fact, every breccia pipe drilled featured high-grade zones. The company is now looking to scale up its operations by aggressively testing ideas and focusing on bigger targets.

Chakana Copper had conducted extensive drilling at the deposit in order to demonstrate that the breccia pipes are significant, not only from a grade tonne perspective but also from a mine-ability standpoint. The breccia pipes are vertical and are located within close proximity to each other. The deposit features a hillside that is accessible through tunnels as opposed to expensive deep shafts. As a result, the mining operation can be carried out with a limited number of people. Sub-level mining is highly-efficient and can provide higher production volumes. Furthermore, sub-level mining can be used to produce from multiple breccia pipes at once.

According to the company, the kimberlite mining process can be applied to breccia pipes. In this process, the top portion of multiple pipes is taken off and developed into small starter pits that go underground. The underground infrastructure is then efficiently integrated into the haulage and ventilation between the pipes.

Chakana Copper has drilled out the first round of discovered breccia pipes and has developed an inferred resource. As per mining engineers, the pipes can be mined as long as the economics work out. The company currently has 7 breccia pipes which roughly amounts to a 7Mt resource. The company has found that the pipes are coming from an immense energy source located at depth. The breccia pipes are erupting off the top of a massive intrusion. The company anticipates that venturing deeper would bring it closer to the energy source.

Close proximity to the energy source increases the chances of intrusion-induced damage, leading to explosive brecciation fluids that can permeate into highly-permeable open breccias, mineralization the branches. The company has already identified small breccia pipes at surface that coalesce into much larger pipes. There is a possibility that these pipes could coalesce into mega breccias. The deposit is open at depth.

The company anticipates that it could potentially scale up the project by adding another 15Mt-20Mt in the next resource estimate. It is looking to aggressively explore the deposit and test out several different targets in a short period of time.

To find out more, go to the Chakana Copper website