Ilo Norte has the potential to be a company maker for Latin  Resources. The project hosts a recently discovered alteration system that is comparable to those that surround large copper-gold deposits in Peru and Chile. The system was discovered during 2012 through some very astute geological detective work.

The system is large, at least 10 kilometres long and several hundred metres thick. While it does not follow that such a system must host an economic mineral deposit, it is a prerequisite for the formation of such deposits.

The primary target at Ilo Norte is a large replacement-style copper-gold deposit, possibly of IOCG (“Iron Ore, Copper, Gold”) type. IOCG deposits can also have associated zinc and silver, which, along with copper and gold, are present at Ilo Norte. An example of an IOCG deposit is the Candelaria mine in northern Chile, which had reserves at the end of 2011 of 339 million tonnes at a grade of 0.58% copper, 0.13g/t gold and 2.06g/t silver.

There is also potential for porphyry-style deposits, such as the nearby Tia Maria deposit, which has resources of 638 million tonnes at a grade of 0.39% copper and 0.16g/t gold.

The alteration is caused by hot fluids, associated with deep intrusive bodies, passing through the surrounding sediments. The later stages of alteration may include iron oxides (hematite and magnetite), iron and copper sulphides (pyrite and chalcopyrite), gold and possibly also zinc and silver. If these metals are present in sufficient concentration then an economic mineral deposit is formed.

Latin Resources drilled Ilo Norte in 2011. Drilling was downslope of the (then undiscovered) alteration package, but nonetheless returned some very good intersections. Best results were 36 metres at 0.29% copper and 0.09g/t gold; and 21 metres at 0.25% copper and 0.09g/t gold.

These results prove that the system hosts copper and gold and it would not be unreasonable to expect better results within the heart of the alteration system.

A recently completed geophysical survey has defined a large (2000 metres by 800 metres) IP (Induced Potential) anomaly. The anomaly is indicative of conductive material within the alteration system which may indicate the presence of sulphides, which in turn may be associated with copper and gold. However, it must be noted that there are other causes of anomalous conductors which may not be of economic significance.

Last Word

The evidence at Ilo Norte points towards a large mineralised system, with an excellent opportunity to discover significant copper-gold mineralisation. Open cut, economic deposits of this type in the region will typically have a cut-off grade (the lowest grade mined) of around 0.25% copper, comparable to the 2011 Ilo Norte results that are peripheral to the main alteration system.

Success in the forthcoming drill program, 12 drill holes scheduled for later this month, will firstly be measured by the extent and nature of the alteration intersected. This would be “proof of concept” and add substantial value to the project. Further, it would almost certainly attract the attention of major miners in the region.

Next in importance will be the identification of sulphide mineralisation (such chalcopyrite, an ore of  copper; and pyrite, which may carry associated gold), which can be easily identified in drill core. However, assays will be required to determine grades.

Thus, in sum, there are three stages of results from Ilo Norte drilling that will influence project value: alteration; visible sulphide, particularly chalcopyrite; and assay results. Very interesting times ahead for shareholders of Latin Resources.

20 February 2013

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Disclosure: Market Capital holds securities in Latin Resources Ltd as at the date of publication of this article.