Mincor Resources is picking up at Reko Diq where BHP left off. The copper-gold play, which could contain up to 15 million tonnes of copper and 32 million oz of gold, is located deep in the hill country of the western Pakistan province of Baluchistan.

BHP has been working in the region for many years and believes the area holds enormous promise. But, as has been the case with a number of other advanced BHP mineral projects, a decision was made to farm out Reko Diq to a keen explorer with a greater desire to convert theory into reality.

 

 

Mincor Resources managing director, David Moore ... the dominant focus for the company in the immediate future is at Reko Diq.

Backed by its biggest shareholder, South Africa’s Iscor steel group, Mincor — which once traded (unhappily) as Africwest Gold — signed up for an exploration alliance with BHP to see if the Chagai Hills of Baluchistan can generate a major mining venture.

Mincor’s managing director, David Moore, is confident the alliance will bear fruit. “This is an innovative arrangement which gives Mincor’s shareholders direct exposure to the massive wealth-creating potential of a major base metal play, in alliance with Australia’s pre-eminent resource company.” He’s right, but it will be hard work.

BHP says Reko Diq is a complex structure which appears to host at least 16 porphyry copper-gold deposits. The most advanced target is the H4 deposit into which 16 holes have been drilled, each intersecting substantial copper mineralisation beneath 20m and 50m of cover.

Based on this initial exploration, Mincor predicts H4 may host a resource of about 60Mt grading 0.9% copper in a supergene deposit likely to be amenable to heap leach and SX/EW processing.

Meanwhile, in the nearby Western Porphyries project, 33 diamond and RC drill holes have outlined four adjacent mineralised porphyry bodies. Mincor has calculated an inferred resource of 729Mt at 0.64% copper and 0.39gpt gold (at a cut-off grade of 0.5% copper) for these.

There are a further seven drilled and four undrilled porphyry systems in the overall Reko Diq complex, and 980sq.km of unexplored ground in the rest of the licence. In total, BHP completed 20km of drilling in the region.

The deal which saw Mincor gain a foot in the door at Reko Diq is similar to others in which the big resource company has introduced small explorers to its relatively well advanced prospects. Under the agreement, Mincor has a six-month option to ratify the alliance. If it does, Mincor may acquire all of BHP’s interest in H4, the most advanced property, by carrying out an agreed regional exploration program at an estimated cost of $US1.5 million over three years.

Claw-back clauses cover discoveries outside H4, if they contain mineralisation with an in-ground value of more than $US2.5 billion.

Moore said Mincor’s aim is to get H4 into production as quickly as it can. “The profitable development of the H4 project is our first task. This would be the key to obtaining financing for the much larger Western Porphyries.”

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The Chagoi Hills region of Baluchistan was first explored by BHP, which has since farmed out the ground to Mincor under a joint venture arrangement with a claw-back proviso.