On Wednesday, Pucara Gold’s shares rose 33.3% to C$0.04 apiece, for a market capitalization of C$3 million. Copper Standard traded at C$0.50 apiece, capitalizing the company at C$21 million.
The transaction is expected to provide synergy and cost savings, as well as deliver increased scale and enhanced diversification to the combined company. It would bring in three additional copper exploration assets in Peru, two of which were selected the late David Lowell, hailed by many as the world’s greatest explorer.
Chief amongst these projects is Pacaska, an epithermal high-sulfidation gold/porphyry copper target that sits on 76.5 sq. km. of land with a widespread mineralized footprint. According to Pucara, the geology of Pacaska is analogous to various world-class deposits, such as the Pierina mine in Peru. Rock sampling at Pacaska has returned 17 g/t gold and 11% copper.
The other two projects are Paco Orco and Capricho, covering 44 sq. km. and 37.7 sq. km. respectively. The former is a carbonate replacement type target that had rock samples returning 0.58% lead, 0.26% zinc, and 58 g/t silver, while the latter is a porphyry copper target containing enrichment zones of up to 3% copper. A third party has the option to earn into 75% on both projects.
These projects will add to Copper Standard’s flagship Colpayoc property located in the Department of Cajamarca of northern Peru. It hosts gold (copper) porphyry deposits typical of those found in the region. The Cerro Corona gold-porphyry (Goldfields) and Michiquillay copper-molybdenum-gold porphyry (Southern Copper) are both within a 40-km radius of Colpayoc.
The property was first explored in the 1990s by a joint venture that included Newcrest. Subsequent exploration focusing on the Daylight Zone resulted in a mineral resource estimate of nearly 20 million tonnes grading 0.48 g/t gold in the inferred category.
Along with the merger, Copper Standard has also agreed to finance Pucara’s transaction costs and working capital by subscribing for approximately 8.41 million units of Pucara at a price of C$0.03 per unit. The financing is contingent on exchange approval of the issue price.
