AXG Mining (ASX: AXC) has achieved another milestone at its Condoroma copper-gold project in southern Peru by securing a drill rig to begin a high impact exploration program in May.
Condoroma is located in the prospective Andahualyas-Yauri mineral field.
The property is close to and along the same structure as large mines and development projects such as Xstrata’s (LSE: XTA) Tintaya mine and Las Bambas and Antapaccay development projects.
The belt currently hosts over 4 billion tonnes of Inferred and Indicated Resources.
Peru is widely considered one of the best mining jurisdictions in the world ranking third globally in copper production, fourth in the world in molybdenum production and is Latin America’s largest producer of gold.
With a strong mining culture and a large pool of experienced workers, Peru is ranked sixth globally and second in Latin America in terms of attracting exploration investment.
In September last year, AXG announced it had signed binding Letters of Intent with Lara Exploration to earn up to a 75% interest in the Condoroma and Coporaque properties.
The properties consists of 24 mineral concessions covering 17,764 hectares and are located 75 kilometres from one another in the southern part of the Cusco Region.
Both Condoroma and Coporaque are drill ready with strong exploration targets and are close to existing infrastructure providing a low cost of exploration.
Previous geochemical sampling, together with induced polarisation and magnetic surveys, has outlined a total of six drill targets at Condoroma.
The geology of the Condoroma property appears to be consistent with that of other large copper-gold porphyry and skarn systems in Peru.
Substantial surface mineralisation and structural features cross the property and trend towards the Tintaya-Antapaccay deposits to the northwest.
Ground geophysics (IP survey) has revealed conductive targets along this trend which AXG intends to drill test in the upcoming exploration campaign.
AXG has completed an extensive work program over the project area. Surface geochemistry, mapping and sample results to further refine future drill holes are due in the near term.
The company has entered into a drilling agreement with local operator Consorcio JM S.A.C for a 3,500 metre diamond drilling program at Condoroma.
Under the terms of the agreement with Lara, AXG has entered into a two-stage option whereby it can earn 55% of the rights and interests of the Condoroma property by making staged payments to Lara of US$800,000 and spending US$3.5 million on exploration over three years.
AXG can then boost its stake to 75% with a further $1 million cash payment, $7 million, three year exploration expenditure and the completion of a Prefeasibility Study within four years of executing the option to increase its interest.