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Peru and Dorato Resources Peru is an exceptionally mineral rich country that ranks very high on my list of places to explore. It also offers a reasonably attractive and stable environment for mining investment. The country's mining sector has grown substantially since the virtual elimination of the Shining Path (Maoist guerilla group) and the revamping of mining regulations in the early 1990's. Mining revenue now accounts for 62% ($17bil) of Peru's total exports. It is the chief contributor to the country's GDP and the largest single non-farm employer. Peru is the number one producer of silver in the world and ranks second in zinc and copper, third in tin and fifth in gold production. The mining industry has been the driving force behind the country's impressive growth and modernization. Last year GDP increased 8% and the wealth effect is spreading into other industries unrelated to mining. Peru's standard of living is improving and the culture, cuisine and nightlife in Lima and Cusco are comparable to nearly anywhere in the world: even Oklahoma! That's not to say that all is well and that Peru is a simple and easy place in which to explore for and develop a mine. Despite regulations requiring that half of the federal tax revenue from a mine be redistributed to the local province, there is often little evidence that this money ever makes it there. When a poor community does not see the benefits of mining, the scene is set for NGO's (non government organizations) and the Catholic Church to exploit and manipulate a largely uneducated population. This resentment and manipulation plus the inevitable mistakes large and/or foreign companies make at the local levels of society have resulted in some well-publicized screw-ups. Manhattan Minerals losing the rights to mine the Tambo Grade deposit is probably a case study in what not to do. Click here. The current social issues being faced by London listed Monterrico and the Chinese state steel company Shougang are also the result of an inability to positively interact with the local population. However, with honesty, integrity and education it is possible for a company to work within the existing legal framework and be successful in Peru. This (see below) is where the Amazon Basin meets the Peruvian Andes. You should note that not only are there no Starbucks here, but there are no roads, villages or rock outcrops. Dorato Resources Cordillera del Condor project area There are very few places left in the world where a geologist can walk up a creek with a fair degree of certainty that he or she is the first one there with a rock pick. Dorato Resources' Cordillera del Condor property package is one such place. A two-hour flight out of Lima got me to a lonely army outpost on the edge of the Amazon Basin. From there we flew another hour by helicopter across virgin jungle into an isolated exploration camp literally clinging to the hillside. The Tambo camp is at the border with Ecuador just east of the South American continental divide. It is steep, wild, uninhabited and wet terrain: the sort of place you could find anything (or nothing). Tambo Base Camp carved into the hillside Dorato negotiated the mineral rights to 700 square kilometers of ground along the Ecuadorian border a little over a year ago. This in itself was quite an accomplishment as the area had previously been a no-man's land disputed and fought over by Peru and Ecuador. Actually gaining the rights to explore required jumping through a series of hoops and, ultimately, the Peruvian President's signature. This was highly sought after ground which Dorato could not have secured without the depth of experience and knowledge of its Peruvian management team. Cordillera del Condor is a very prospective and unexplored property package. It sits at the southern end of a mineralized trend that includes Corriente's Mirador copper deposits (combined measured and indicated resources of 890 million tonnes grading 0.56% copper, 0.16 grams per tonne gold), Aurelian's FDN deposit (13.7 million ounces grading 7.2 grams per tonne gold), and numerous other gold and base metal deposits. The Peruvian side of the belt has seen a few brief exploration campaigns with the most serious being a regional stream sediment program by Anglo American. Anglo's work produced a number of geochemical anomalies and the discovery of one zone of outcropping gold mineralization at Tambo. Anglo put in some trenches but was never able to follow up with drilling due to the Ecuador/Peru border dispute of 1995. The border between the two countries was ultimately demarcated in 1998. Dorato's exploration camp at Tambo was the only place readily accessible on this trip. From the limited the outcrops that Dorato has opened up through the vegetation it appears that the mineralization at Tambo probably falls into the intermediate sulfidation category of precious metal deposits (refer to the July 4th letter). High-grade gold (up to 52 grams per tonne) plus zinc, lead and copper are localized in steeply dipping structures and shears that are generally a meter or less wide. Weak disseminated gold and base metal mineralization occurs in the host rock away from the mineralized structures. The mineralization is part of a larger alteration system hosted by volcanics and high-level porphyry intrusives. I suspect the mineralization is related to a pyritized hydrothermal breccia that contains clasts of all the local rock types. Hand dug pits and trenches over a 500 by 500 meter area provide the only outcrop and it is impossible to estimate how large this alteration zone could be. The mineralization and alteration demonstrate that a lot of fluids were pumped through the Tambo hydrothermal mineral system (a good thing). The entire 700 square kilometer property package is geologically favorable for high, intermediate and low-sulfidation gold deposits, porphyry copper deposits and related precious and base metal skarn and vein deposits. There is a lot of ground to cover and Dorato's regional program will consist of stream reconnaissance and airborne geophysics. They also plan to drill test Tambo this year if possible. Grassroots exploration of this sort is hard and slow work, particularly given the terrain and isolation. The company (DRI.TSX-V) has about 34 million shares outstanding (fully diluted) and approximately $10 million in the bank. They recently completed a financing with Franco-Nevada that raised $3 million at $1.70 per unit. The placement also grants Franco the option to purchase a 1% to 2% royalty under certain conditions. Approximately 8.5 million shares come free trading August 19th so there could be some weakness and volume in the stock after that date. I purchased Dorato shares in a private placement last year based on the property's geology and favorable location on trend from some important mineralization in Ecuador. The people behind the company are legitimate, competent and serious. I am not however adding Dorato to the EI portfolio. This is a very grassroots exploration play and considering current market conditions there is no urgency to buy. I do think it is an interesting play and something well worth watching as the exploration program develops. That's the way I see it Brent Cook Brent owns shares in Dorato Resources Neono |
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| aus der Diskussion: | Xiana Mining - ehemals Dorato Resources - Gold in Peru, direkt an der Grenze zu Ecuador, gegenüber v |
| Autor (Datum des Eintrages): | Neono (11.08.08 19:00:41) |
| Beitrag: | 756 von 3,226 (ID:34702485) |
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