Indicator eyes major copper target at Mohave Project, Arizona

Indicator Minerals (CVE:IME) has assembled a highly skilled technical team to commence drilling and early exploration at the Mohave Copper Porphyry Project located in northwest Arizona. To fund the first and second phases of this program Indicator Minerals completed a share placement issuing 11 million units at 18 cents per unit, for gross proceeds of just under $2 million.

The Mohave Project is interpreted as a large-scale, copper porphyry deposit with significant silver and molybdenum credits. Exploration work has identified extensive copper mineralization over a large area of the project coincident with an Induced Polarization anomaly and complimentary structural features, and is located in a prolific copper district.  Arizona is home to 48 operating copper mines and has excellent geology for major deposits, including the Resolution Copper discovery which is amongst the world’s largest ore bodies with an Inferred Resource of 1.624 billion tonnes at a grade of 1.47% copper and 0.037% molybdenum.

The geology of the Mohave Project is believed to be analogous to the Freeport McMoRan (NYSE:FCX) Bagdad Copper Porphyry Mine, which is located within 35 km of the property, and along the same structural trend.

The Bagdad mine is a porphyry copper deposit containing both sulfide and oxide mineralization. The predominant oxide copper minerals are chrysocolla, malachite and azurite. Chalcocite is the most common secondary copper sulfide mineral and chalcopyrite and molybdenite the dominant primary sulfides. The mine has been in operation since 1945, and currently employs 800 people, producing 225 million pounds of copper and 6 million pounds of molybdenum on an annualized basis. The mine has an estimated resource of 1.5 billion tonnes, with a copper grade of 0.35% and molybdenum of 0.22%, and can operate profitably with a copper price of US$0.90 per pound.

Mercator Minerals (TSE:ML) is also in the vicinity, operating the Mineral Park Project, which is located 100 kilometers to the northwest of Mohave. This project is building up to a processing rate of 50,000 tonnes per day, to produce 56 million pounds of copper, and 10 million pounds of molybdenum over the next 10 years of a 25 year mine life.  

Indicator Minerals acquired a 100% interest in the Mohave Project in August of 2010, by purchasing all of the issued and outstanding shares of Bluestone Resources Inc., which is a private company that held the project and carried out preliminary exploration. The Mohave Project is located approximately 200 kilometers northwest of Phoenix, and is one mile from the highway and high capacity power lines, and situated entirely on BLM land.

The property was previously mined in 1960 to 1961 at the Wikieup Queen Mine that produced copper oxide, and the Scott Mine from 1955 to 1957 that produced molybdenum, lead, and silver from a mineralized fault zone. Mohave has never been evaluated utilizing modern exploration techniques prior to the preliminary evaluation carried out by Bluestone. 

Bluestone identified a regional scale setting that is ideal for a mineralized porphyry ore body, with geological mapping indicating an extensive hydrothermal system. A geophysical IP survey across the same ground  completed in 2008, identified a large anomaly that  potentially covered an area measured at 2.5 km by 3.0 km and suggested that mineralization existed at depth. This IP work omitted coverage to the south and west.

Indicator Minerals has now released the results of the 2011 IP survey, and confirmed that Mohave has the potential to host a very large tonnage copper porphyry deposit. The chargeability anomaly now covers 735 hectares and has added 68% to the size of the anomaly previously identified by IP work in 2008.

Surface sampling of rocks and soil across the anomaly recovered high copper, molybdenum, and silver grades over a distance measuring 2.2 km by 1.0 km. Geophysical data have correlated a relationship between the surface copper samples, which contain five types of copper mineralization, and the potential mineralized system at depth.

The structural setting at Mohave indicates a large area of fluid flow that is located along the same deformation zone as the Bagdad Mine. Geochemical data also indicate a large footprint containing copper, molybdenum and silver.

Historic and shallow rotary air blast drill holes punched through a copper oxide zone show impressive results that include 195 feet at 0.49% Cu, 140 feet at 0.26% Cu, and 145 feet at 0.25% Cu, potentially indicative of a large system. 

Management believes that all of this strong technical evidence suggests that the Mohave Project has the potential to host a very large copper-molybdenum-silver porphyry deposit.

The first phase of the program has a budget of $1.1 million and includes the completion of Induced Polarization and Ground Magnetic surveys, which  covered the high potential western extension and allow for the construction of a 3-D data model. The company has also commenced scout drilling of priority targets, including the testing of 4 spatially distinct areas of the property,  with 15 to 20 holes planned to depths of 300 to 500 meters, with completion of the first phase expected in June of this year.

The second phase of drilling for 5,000 meters will follow-up on the first phase results and is currently scheduled for the third quarter of this year. Preparation work has already begun to improve road access and ready drill pads for the program.

The copper price is currently at US$4.26 per pound, and is at very bullish levels, having broken out to a five year high. Positive exploration results at Mohave have the potential to put this lightly capitalized company on the map.