DISCOVERY HISTORY OF THE PORPHYRY COPPER-MOLYBDENUM DEPOSIT AT SIERRA GORDA, ANTOFAGASTA PROVINCE, CHILE: IMPLICATIONS FOR SUCCESSFUL EXPLORATION IN MATURE TERRANES

Sierra Gorda (SG) is in the Paleocene-Eocene porphyry Cu belt of northern Chile-southern Peru and was long known for extensive Cu-tourmaline breccias; but was not recognized as a porphyry deposit. Before 2000, several companies drilled 488 holes, establishing a small oxide Cu resource around several of the breccias. In 2004, Quadra Mining (now KGHM International) acquired SG as a low grade Cu leach project, and began drilling to expand resources. By late 2005 it was clear from observing alteration patterns, cross cutting veins, and fragment lithologies that the well explored breccias were part of (but not central to) a very large, poorly defined porphyry Cu system. Exploration expanded beyond the known breccias with a systematic review of existing data and historic core, and recognition and mapping of favorable andesitic host rocks. In July 2006, DH281 cut nearly 340 meters of >1.0% Cu with strong Mo-Au roughly 500 meters north of previously known sulfide mineralization. Offset holes quickly confirmed the presence of a huge system; and drilling from mid 2006 to late 2008 defined a very large Cu-Mo-Au resource now under development by KGHM (1.3 billion tonnes of 0.52% CuEQ).

Notable factors at SG included: 1) A large, well organized data base, preserved core, and well studied regional geology all aided recognition of the porphyry system. 2) Classical porphyry Cu geology – mapping veins, alteration and sulfide mineralogy - delineated the system and the deposit. 3) A geologic team with broad experience in Chile and porphyries worldwide had the ability and authority to make independent decisions and change program plans on the fly. 4) Aggressive drilling and quick follow up speeded evaluation. 5) Regional geophysics played no part; but project IP and mag helped illuminate geology. 5) Knowledgeable, supportive and decisive senior management acquired the original project; accepted the rationale to explore the larger system; and made a strong financial commitment to reinforce success. 6) Luck - the project contained an ore deposit; and acquisition, discovery and definition all took place in a long “bull” copper market.

Mature terranes are the future of exploration. The SG discovery was driven by a creative synthesis of regional, district and project data; the process was much more like brownfields than frontier exploration.