Resource World Magazine

48 www.resourceworld.com d e c e m b e r / j a n u a r y 2 0 1 6 mINING quaterra resources renAissAnCe of tHe yerington, nevAdA Copper distriCt by Robert Simpson In today's mineral exploration business, spending money on exploration is rare, but partners with deep pockets are more abundant if you can consolidate a 512 mile land package, with three significant copper deposits and water rights for min- ing, all within the heart of the historic Yerington, western Nevada mining camp. Quaterra resources inc. [QTA-TSXV] and its subsidiary, Singatse Peak Services', (SPS) have pulled off what many believed would be impossible. For the first time, a single owner has the opportunity to re-develop the historic copper camp, which includes the Yerington Mine, the MacArthur Mine and the 22 mile Bear copper deposit – all considered possible copper producers. The potential to revitalize the copper district caught the attention of Freeport- McMoRan Nevada LLC. Freeport Nevada, a subsidiary freeport-mcmoran [FCX- NYSE], has invested almost US $9.3 million as part of a three-stage option agreement to earn a 55% interest in SPS by paying US $40.7 million over four years. If all goes according to plan, Freeport Nevada can earn a further 20% by spending another US $97.9 million or by funding SPS to full feasibility. But before the Freeport agreement, SPS invested US $28 million and released a Preliminary Economic Assessment (PEA) of the Yerington Mine and a resource esti- mate for the MacArthur Mine. At Yerington, copper mineralization occurs as primary sulfides below the for- mer pit as acid-soluble copper oxides and chalcocite around the Yerington pit margins. The Yerington Project has the potential for additional resources as the limits of copper mineralization, both verti- cally and horizontally, are not established. The 2014 PEA concludes Yerington has the potential to develop as a copper-oxide, heap-leach operation. The PEA calls for the recovery of 747 million pounds of copper over an 18-year mine-life with an average mining rate of 15 million tons/year. Initial capital expenditure is US $232.7 million with the life-of-mine operating costs of US $1.89/lb, with a Net Present Value (NPV) of US $201.6 million. The PEA also shows that MacArthur remains open to expansion. Also present at MacArthur is an underlying primary sulfide resource that has not been fully explored. The 100%-owned MacArthur deposit is a secondary enriched acid- soluble copper deposit located near the Yerington pit. Exploration drilling began in April 2007 and as of March 2015 a total of 204,700 feet of drilling in 401 holes had been completed. With the possible integration of the MacArthur oxide deposit, the Yerington Project could reclaim its position as one of Nevada's major copper producers. However, to develop a truly world-class copper district, Quaterra and investor Freeport are betting on the Bear deposit to be the catalyst. The Bear deposit is adjacent the Yerington pit and has had much historical work done. Bear was discovered 50 years ago and has 125,000 feet of historic drilling in 49 drill holes that indicate copper mineralization over almost 22 miles. The portion controlled by Anaconda in the 1960s covered approxi- mately 25% of this area and included an estimated 500 million tons of mineralized material averaging 0.40% copper, but this is the first time the property is under the con- trol of a single owner, and its full potential can be determined. The current 22,500-foot drill program is designed to twin one previous hole to corroborate historic assay and test if high-grade and thicker intercepts extend north of the historic drilling and finally to determine the geological controls for higher-grade mineralization. The Bear deposit is a large porphyry copper system that occurs below 500 to 1,000 feet of valley fill and volcanic rocks. Mineralization occurs predominantly in quartz monzonite, border phase quartz monzonite, and quartz monzonite por- phyry dikes. Copper mineralization occurs most com- monly as chalcopyrite with minor bornite within platings and veinlets of fresh feld- spar and biotite. Molybdenite is a common sulfide within the deposit, usually occur- ring with the best copper mineralization. However, only about 20% of the historic core samples have been analyzed for molybdenite and more studies are neces- sary to understand better its average grade and distribution. The deposit is displaced by the gen- tly east-dipping normal fault known as the Bear fault. On the western part of the deposit, mineralization occurs within the footwall of the fault while to the east the mineralization occurs deeper within the hanging wall. Should Quaterra successfully redevelop this historic mining district, it will be a significant win for everyone including the local communities and for the joint ven- ture partners, and yet another example of where the smart money is going during the downturn in the commodities markets. n www.precisiongeosurveys.com 604.484.9402 Magnetics - Radiometrics - Time Domain EM Specialists in high resolution airborne geophysics in mountainous terrain

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