Rio Tinto Joint Venture / Big Hill Project
Big Hill JV Drill
Figure 1 - Property Map
The Big Hill porphyry target is located in the East Tintic Mining District approximately 43 miles southeast of Rio Tinto’s Bingham Canyon Mine, which is recognized as one of the world’s largest open pit porphyry copper deposits. A stockwork of quartz veinlets occupies the core zone of the Big Hill target area with a lithocap superimposed on the stockwork, a process known as telescoping. Lithocaps usually define the shallow parts of porphyry copper systems typically above the main Cu-Au/-Mo zone.
Chief Consolidated Mining Co., (“Chief”) (Andover owns 78.5% of Chief) has signed an Earn-In with Option to Joint Venture Agreement, with Kennecott Exploration Company (“Kennecott”), a subsidiary of Rio Tinto, on the Company’s Big Hill Project located in the East Tintic Mining District Utah, USA. The Big Hill Project is focused on developing a porphyry copper-gold-molybdenum target located on claims owned by Chief or it’s wholly or partially owned subsidiaries.
Under the terms of the proposal, Kennecott may earn a 51% interest in the Big Hill Project by completing a Pre-feasibility Study or incurring $20,000,000 in expenditures, whichever occurs first, and an additional 4% interest by funding all Project costs until delivery of a Feasibility Study accepted by Rio Tinto for making an investment decision.
Chief is fully carried on a 45% interest.
BIG HILL Work Program
During the fall of 2010 and into early 2011 Kennecott Exploration Company contracted and completed magnetotelluric, airborne magnetic and IP surveys over the Chief grounds. Kennecott completed surface sampling, mapping and historical data compilation.
Airborne Magnetics
The Toronto, Ontario, Canada based airborne geophysics contractor MPX Geophysics was contracted to conduct the survey. An Astar (AS350B) helicopter operated by Classic Helicopters was used to complete the 803 line km. survey. The line spacing was 200 meters with 2000 meter spacing between the lines and the sensor was flown at approximately 60 meter elevation.
Induced Polarization Survey
Quantec Geoscience of Toronto, Ontario, Canada conducted an Induced Polarization Survey (IP) at the Big Hill using their proprietary Titan System. The survey is basically a pole-dipole layout using 100 meter receiver dipoles and recording up to 42 dipoles (or channels) at a time. Quantec surveyed six lines with a total length of 30 line kilometers. The lines were positioned over areas with intense alterations as well as conductive and magnetic features previously identified from the magnetotelluric and airborne magnetic surveys and were extended into background.
Magnetotelluric Survey
Western Geco., LLC of Houston, Texas, USA were contracted to complete a magnetotelluric (MT) survey to identify potential deep seated intrusives which could be the source for porphyry mineralization in the East Tintic District. The property was covered by a 400 X 400 meter grid of stations in the high priority area as indicated by zones of advanced argillic alteration and a 800 X 880 meter grid in the lower priority areas.
Results of the 2010 Work
In total twenty nine (29) anomalies have been identified, of which six (6) are classified as high priority (based on a conductive feature with an associated chargeability signature and depth below the surface); thirteen (13) anomalies have been classified as medium priority and ten (10) as low priority. The correlation between the 3D MT data set, the 2D DC resistivity model and the Titan-24DC/IP survey is very good.
2010 – 2011 Work Program
Based on the data compilation, field work and the geophysical surveys Kennecott has identified three (3) drill targets that are being tested this year. Exploration permits for drilling were obtained from Utah’s Division of Oil, Gas and Mining (DOGM) on June 20, 2011. Prior to the issuance of the drill permits, Environmental Management (ERM) of Salt lake City, Utah, USA completed a Cultural Resource Survey over the proposed drill sites. Kennecott continues field work over areas of the Big Hill property focusing on the alteration patterns as well as pebble dykes as vectors to potential porphyry mineralization. Drilling commenced on August 17, 2011 with Boart Longyear doing the drilling for Kennecott on the project.
Management feels that considering the extent of alteration and the magnitude of silver, lead and zinc mineralization in the district, this undiscovered porphyry system could have the potential to rival the size of some of the world’s largest copper deposits.
Gordon Blankstein, Chairman of Cheif states; “We are pleased to be working with Kennecott’s team of professionals, they possess tremendous knowledge of the East Tintic Mining District as they have operated both the Burgin Mine and Trixie Mine in the past.”
Separate and excluded from the Kennecott agreement, Chief owns additional properties in the District that it proposes to develop. These include but are not limited to, the Trixie Gold Mine, which was in production as recently as 2001, the Ball Park target, the Burgin Mine Complex and milling facilities plus many other former producing mines.