The Saruca property is located along the western flank of the Candelaria-Punta del Cobre world class IOCG ore district. The Project is held under an executed option agreement with terms summarised earlier in this memorandum. The underlying tenement is a granted Mensura of approximately 1.5 km2 size.
The most important feature of the property is that it is located in the trend of the IOCG type (sulphide rich) vein system of the Ojancos Nuevo district. The Saruca Project area shows a discrete and well defined hydrothermal alteration zone which shows potential for IOCG type copper veins at depth.
Carman Bajo mine (IOCG type) is situated approximately 10 km to the south and along strike from Saruca. Carman Bajo is a producing mine with grades around 2% Cu and 1 g/t Au over significant widths. The project is also situated approximately 5 kilometres to the north west of the massive Candelaria mine, operated by Freeport McMoran.
Comet completed drilling at the Saruca Project in March 2013. The drilling programme comprised two vertical RC percussion holes, to 220 metre depth, approximately 80 metres apart. Copper mineralisation was pervasive throughout each of the holes, with a higher grade zone, between 30 and 40 metre thickness from 0.2% and 0.4% copper, being intersected in both of the holes at approximately 50m true depth.
Further geochemical and mineralogical work is required to precisely identify alteration envelopes and assemblages in the property. The following sketch outlines the preliminary mapping that has been conducted to date (and shows the location of the two holes completed by Comet).
Opinions from two widely reputed experts on the drilling results are summarised as follows:
Nigel Maund a geological consultant with 30 years experience in the region said:
“Analysis of the results of this drilling, and the assay results, suggest that the small programme of RC drilling was successful in defining the margins of a potentially major copper – cobalt – gold system, most probably of the Andean IOCG type.”
Professor Ferenc Molnar a renowned expert in South American porphyries and IOCG’s said:
“On the property I saw two modest sized dacite cryptodomes which had undergone intensive hydrothermal alteration especially albitisation. Such domes are closely associated with higher grade structurally controlled and manto copper mineralization in the Punte del Cobre Mines (Socovon, Punte Del Cobre and Carola).
Two major structures striking northerly cut through the Saruca concession and I feel these controlled the copper mineralization, These structures conform in strike to those responsible for the Punte del Cobre mineralization;
The style of mineralization discussed by both your Chilean geologist and myself fit neatly with the mineralization and alteration developed in the Punte del Cobre mine group. Hence, I feel that you have potential to hit a major high grade copper feeder zone at depth like Socovon Rampa or Carola with grades upwards of 3% copper in the main zones over widths of from 10m to 30m true width in quite steeply dipping structures.”
The target at Saruca is a sub vertical highly altered structure which has potential IOCG copper veins at depth below the hydrothermal alteration zones present at the surface. This initial drilling was successful in defining the potential margin of a major copper– gold – cobalt system, most probably of the Andean IOCG type.
The lithological features of the Saruca property also fit well with vein type IOCG systems of the region. In the Punta del Cobre district, the host rock of sulphide and oxide (magnetite, hematite, muschketovite) veins, breccias and mantos is the lava rocks and pyroclastics of the Punta del Cobre formation. In the vicinity of the deposits, occurrences of albitised dacite domes and dikes are also well known. All of these features appear present on the Saruca property.