Chala’s Peruvian project could be a copper and iron giant in the making


Special report: Take a potentially large-scale iron and copper project, place it in South America’s best mining address, and you have what Chala Metals believes is the recipe for success.

The unlisted company, which is seeking to be listed on ASX this year, acquires private Peruvian company AMP which owns the rights to the highly promising Achatayhua project through a share swap, raising at least $ 1 million. seed capital dollars.

Here’s what sets the project apart.

Achatayhua is located in the world-class iron ore, copper and gold (IOCG) subprovince of south-central Peru and is close to major deposits such as Marcona, the largest ore mine in Peruvian iron with a production of 10Mtpa, Mina Justa with 413Mt at 0.79% copper and the IOCG 863Mt Pampa de Pongo project.

Location of the Achatayhua project. Photo: Supplied

It hosts a well-defined outcropping ore body up to 1 km in diameter, with a potential length of 8 km and rock chips that have returned iron values ​​greater than 60 percent iron in some areas and copper grades. generally greater than 1.0% at the surface.

These rocks are all contained in a geological setting which has all the characteristics of a major deposit.

Highlighting how big Achatayhua could be, an independent geophysical study completed to date indicated that the building could hold resources of up to two and a half billion tons.

In addition, the project is located only 65 km from the coast at an altitude of approximately 3,900 m above sea level, which offers the possibility of potentially constructing processing facilities next to the coast.

So how has a project with such potential gone unnoticed so far?

Find Achatayhua

Executive Director Geoff Muers told Stockhead that one of the reasons the project was overlooked occurred decades ago when the Peruvian government conducted an aeromagnetic survey while there was snow cover over the tops.

The combination of the snow cover distorting the magnetic signature and the location of the project a bit off the beaten track meant that it was neglected until 2006 when it was discovered by a local geologist who had heard anecdotes about an outcrop of magnetite iron ore in the area.

“He investigated it on horseback and identified the rocks at the time and it has been in private hands ever since,” Muers added.

Muers, a geologist who has worked for the financial industry for some time and has traveled the world appraising and conducting due diligence on mining projects for public and private companies since 2013, first realized the value of Achatayhua last year.

“I have known Mark Newton, owner of AMP, since 2018. But it wasn’t until the end of 2020, when I was on vacation and reading technical reports on the geology of some of the largest deposits. from Peru, such as Las Bambas and Mina Justa, that I realized that the rock types at Achatayhua are identical to these other major deposits, ”he explained.

“In other words, the geological parameters are the same. You have limestone, diorite, and volcanic rocks nearby. And what you get a lot of is magnetite, copper mineralization, and Skarn Ore Bodies evolving in this setting.

“It was then that I realized that this was probably a large copper deposit and therefore we needed to move a little further from the potential for iron ore.”

Copper surface rock shards. Photo: Supplied

Muers plans to drill where the skarn has been mapped and where copper soil anomalies and rock chips are high, although the company is also considering drilling holes in the iron ore given the very high levels reported in rock chips.

“Mina Justa is only 85 km away and they mine magnetite separately from copper. In other words, you have a different business mining magnetite and copper, ”he added. “Here, magnetite and (hopefully) copper mineralization coexist, and therefore can potentially be mined as a single deposit, subject to resource definition.”

Big potential

As previously reported, Achatayhua is about 8 km in direction and hosts seven or eight magnetic anomalies that coincide with copper and iron ore anomalies on the surface.

But what excites Muers is that the deposit does not appear to have been too disturbed in terms of folding and faulting as is often the case with many other deposits.

If proven, it will greatly simplify the exploration and potentially the development of the project.

“We need to do more geophysics, but the first magnetic surveys that have been done indicate that this deposit is starting at the surface and could reach more than 500m deep,” Muers said. Storer.

Further emphasizing the early stage of exploration of the project, he added that there are still several targets at Achatayhua to be investigated.

This potential has not gone unnoticed.

“Geologists who know this part of the world and have seen the data on this project are very excited in terms of the potential scale here,” noted Muers.

He added that some of the world’s best-known resource investors have expressed interest while some of the biggest mining companies have been keen to send in teams but have been stranded by the onset of the COVID-19 pandemic.

In the longer term, the height of the project and its proximity to the coast could make development quite affordable.

“Nowadays, you can use what they call regenerative trucks, which run on electric batteries, thus saving on diesel,” Muers explained.

“They hurtle down the mountain and come back up empty on battery power, so they’re pretty cheap to use. Examples already exist in countries like Sweden.

“We also had an engineering study carried out which indicates that a sludge pipeline from the project site to the coast will generate a lot of electricity and this would go a long way towards fueling treatment costs at the site.

“It could be combined with solar power to be a really green self-power project, although a large operation will still need local power or diesel backup. “

However, Chala Metals still has some work to do.

“A lot of bigger investors who contacted me who really like this project said they wanted to see drilling first and then they will come and take a look,” Muers added.

Upcoming work and IPO plans

Chala is currently upgrading the access road to allow a diamond rig to perform a 15 to 20 hole drilling program starting in early June.

These will include shallow holes drilled to depths between 50m and 100m and a few holes drilled over 200m to get a sense of prospectivity and to better understand where to focus exploration efforts going forward. .

Muers adds that the company is currently on the cusp of securing its minimum seed funding of $ 1 million and may surpass that mark.

“We are talking with bigger groups such as financial investors, strategic high net worth groups to come in and support not only this initial increase but also the IPO and these discussions are quite advanced,” he said. -he declares.

The company plans to launch the IPO prospectus around the middle of the year, although Muers notes that it is expected to discuss the details with ASX to see if it can be done pending analyzes of the drill, if all analysis must be in, or if drilling must be halted while funds are raised via the IPO.

“These details can be worked out, but we would like to be listed this year by the fourth quarter,” he added.

“As for the resources of the JORC after the IPO, we hope to have at least two rigs going on this project full time and we will certainly be on the right track by this time next year to have an idea of ​​the scale here and our timeline on the JORC resource.

He added that if the deposit was found to be consistent in geometry and grade, the company could reasonably expect to meet a JORC-compliant exploration target and inferred resources relatively quickly.

“We hope to have at least one exploration target before listing or certainly shortly after listing.”

Other work the company has planned after the IPO includes ground magnetism, some airborne electromagnetic work, and induced polarization to determine copper zones.

Chala has already received offers to levy and finance, but Muers believes that with the world in need of new sources of copper and iron ore, interest in Achatayhua will only grow when the company begins drilling and progresses towards Development.

For more information on Chala Metals and its IPO plans, visit

This article was developed in collaboration with Chala Metals, a Stockhead advertiser at the time of publication.

This article is not advice on financial products. You should consider getting independent advice before making any financial decisions.

All documents linked or mentioned in this article have not been selected, modified or otherwise controlled by Stockhead. Stockhead has not provided, approved or otherwise assumed responsibility for the advice on financial products contained in any documents linked or referred to in this article.

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