Beaty, Lassonde's Atacama ready to drill once deal closes

Atacama Copper expects to close a transaction with TCP1 in the coming days and begin trading on the Toronto Stock Exchange Venture Exchange within the next week or two. This would unlock the C$12.9 million concurrent financing and allow it to start drilling at the Cristina project in Chihuahua, Mexico, chief executive Tim Warman told Mining Journal.

High-profile investors helped the company raise money in tough market conditions, which include Ross Beaty, Pierre Lassonde and Agnico Eagle Mines.

"It is critical in this environment to have well-known backers. From the Atacama side, we have Ross Beaty and the Lumina group, including Scott Hicks as a director, and we will use their back office. From the TCP1 side, Pierre Lassonde will hold 13%, and Agnico will be just under 10%. There is also Trinity Capital Partners," Warman said.

Atacama is undertaking a reverse takeover transaction with TCP1 following a six-to-one share consolidation. TCP1 will receive 64.8 post-consolidation shares per TCP1 share, with 41.7M shares to be issued to TCP1 shareholders.

Warman said that within a couple of weeks of closing, drilling would start at Cristina, a former Goldcorp project polymetallic vein project in Chihuahua, where a maiden resource estimate was published in late 2023. Cristina consists of multiple outcropping quartz veins, many greater than 10m in width, which extend for a strike length of up to 5km. At least four parallel mineralised vein structures have been mapped to date.

Cristina hosts an indicated resource of 17.5Mt grading 0.51gpt gold, 33.8gpt silver, 0.47% zinc, 0.19% lead and 0.04% copper for a 1.33gpt gold equivalent and a contained 752,000oz of gold equivalent. It also has an inferred resource of 19Mt grading 1.27gpt for 777,000oz, based on 70,000m of drilling in 220 drill holes. Most of the resource is contained within the Guadalupe vein structure. The company is planning an initial 10,000m drilling program.

Preliminary metallurgical test work suggests recoveries into concentrate of 75-85% for gold, 85-95% for silver, 80-90% for zinc and lead, and 70-80% for copper.

"We can hit the ground running: we have ejido access agreements in place, drill permits and the driller lined up. Within two weeks of closing the finance, we can have drills turning targeting higher grade zones," Warman said.

While the October 2023 resource was predicated on an open pit operation, Warman thinks the opportunity at Cristina may be underground.

"We see potential for a higher-grade underground deposit with the veins, as they seem to have a vertical extent of over 1km. Our target is to demonstrate a multi-million-ounce polymetallic deposit with minable underground grades. Cristina seems similar to Fresnillo's San Julian mine just down the road San Julian," Warman said.

An underground focus would also seem prudent given that Mexico's president, Alberto Lopez, introduced a proposal to Congress earlier this month to amend the Constitution, including that no mining concessions be granted or permitted for open pit mining.

Chile

Work at the Placeton-Cabello Muerto copper-gold project in Chile will begin once the company has secured an access agreement. Although never drilled, Atacama sees similarities to the El Morro deposit that forms part of the Newmont-Teck Resources NuevaUnion joint venture. Placeton is located between the El Morro and Relincho deposits that comprise NuevaUnion.

A 2018 prefeasibility study showed production of 224,000tpa of copper, 269,000ozpa of gold, and 1700tpa of molybdenum over the first five years.

"Cabello Muerto is the most obvious drill target, but the biggest issue is getting access. There is a lawsuit over who owns the land sold to Teck. We are also talking with an indigenous group whose land would provide easier access, but those discussions take time. We hope to have access to drill by year-end," Warman said.