The MacArthur oxide deposit is one piece of a large, partially defined porphyry copper system. Primary copper hosted in a quartz monzonite intrusive has been redistributed through supergene enrichment forming a widespread, tabular zone of secondary chalcocite mineralization below outcrops of oxidized rocks called leached capping. Subsequent oxidation of the chalcocite blanket, coupled with partial remobilization of copper, formed the upper zone of oxide copper now exposed in the MacArthur pit.
The 50- to 150-foot thick blanket of mixed oxide-chalcocite mineralization remains open for extension to the north, west and south of the drilled area. Some of the best mineralization was encountered along the northern limits of drilling where hole QM-040, intercepted 260 feet of chalcocite mineralization averaging 0.38% TCu at a depth of 140 feet, including 20 feet assaying 1.48% TCu. The hole bottomed in mineralization at a depth of 400 feet.
Untested coincident magnetic and IPR anomalies located near the southwest and northeast margins of the drilled areas are prime targets for primary sulfide mineralization. Deep holes in the Gallagher area to the southwest have partially delineated a zone of chalcopyrite mineralization over a north-south distance of 2,500 feet, with a width of 500 feet and extending to a depth of approximately 650 feet. Primary copper mineralization has also been identified north of the pit at the North Porphyry target where chalcopyrite occurs with pervasive sericite and magnetite in quartz monzonite. The chalcopyrite zone (partially enriched with chalcocite) in hole QM-068 averages 1.15 % TCu over a drilled thickness of 115 feet starting at a depth of 470 feet. The zone has the potential of developing down-dip to the north into a possible porphyry copper center. The strongest parts of both anomalies remain untested, as does a large area of subdued magnetic response caused by the intense leaching of the near surface rocks that resulted in the formation of the oxide copper and chalcocite zones. Hole QM-120 intercepted 100 feet averaging 0.47% copper at a depth of 285 feet along the northern margin and QM-106 intersected 20 feet averaging 0.77% copper at a depth of 185 feet and 70 feet averaging 0.40% copper at a depth of 220 feet on the southern and westernmost margins. The mineralized zone remains open for continued expansion on three sides.
Although only one of the three deep core holes intercepted primary (chalcopyrite) copper mineralization, alteration in each of the holes added another piece to the porphyry puzzle. Hole QM-100 intercepted porphyrystyle chalcopyrite-biotite-chlorite veining at a depth of 1,203 feet that assayed 0.58% copper over a thickness of 65 feet below the shallow-dipping MacArthur fault zone. The intercept makes QM-100 the fourth drill hole over an area of 3,000 feet by 1,000 feet to support the North Porphyry target.
Four IPR geophysical targets, to the north and west of the existing drilling and well-developed porphyry-style alteration, particularly around the intercepts in these holes, indicate that Quaterra´s exploration program is penetrating the margins of a previously unrecognized porphyry center.
In late 2010, Tetra Tech Inc. of Golden, Colorado, has completed an updated NI43-101-compliant independent resource estimate for the MacArthur Copper Project.
MacArthur´s base case measured and indicated oxide/chalcocite resource of 143.7 million tons averaging 0.192% TCu contains 551.6 million pounds of copper. An inferred oxide/chalcocite resource of 215.0 million tons averaging 0.197% TCu contains 846.8 million pounds of copper. An inferred primary sulfide resource of 74.1 million tons averaging 0.256% TCu contains 379.5 million pounds of copper.
The Tetra Tech report indicates that there is potential for developing additional mineral resources at MacArthur adjacent to the current drill-hole pattern.
The updated resource is based on an additional 42,579 feet of exploration drilling and sampling conducted by Quaterra during 2009 and 2010. Also, to reflect a more than doubling of copper prices since the initial resource estimate was completed in January 2009, the base case cutoff grades for the leachable (oxide/chalcocite) and primary sulfide resources have been lowered from 0.18% and 0.3% total copper (TCu) respectively to 0.12% and 0.15% TCu.
Since the February 17, 2009 NI43-101 Technical Report ("MacArthur Copper Project, NI 43-101 Technical Report, Lyon County, Nevada, U.S.A."), the Company has completed an additional 75 drill holes totaling 42,579 feet. Approximately half the holes were to infill gaps in coverage and half were to extend mineralization beyond previously known limits.
The infill drilling was successful in significantly increasing the measured copper resource. At the previous cutoff grade of 0.18%, both tons and contained pounds of copper more than doubled, from 14.2 million tons averaging 0.261% TCu copper and containing 74.0 million pounds of copper to 30.9 million tons averaging 0.245% TCu copper and containing 151.7 million pounds of copper. At the base case cutoff grades of 0.12%, the measured copper resource rose to 48.3 million tons averaging 0.213% TCu copper and containing 205.4 million pounds of copper.
At a 0.18% cutoff, the tons and contained pounds of indicated copper resource actually show a decrease of about 18% and 16% respectively due to the transfer of mineralization from the indicated into the measured category. However, at the current base case cutoff grade, the indicated resource of 95.4 million tons averaging 0.181% TCu contains 346.1 million pounds of copper.
Step-out drilling around the edges of the mineralized zone on 500-foot centers encountered abundant low-grade acid soluble copper. The current inferred copper resource at a cutoff grade of 0.18% is about 12% larger than the previous calculation (84.7 million tons at a grade of 0.277% TCu containing 469.3 million pounds of copper), but increases substantially at the current base cutoff grade of 0.12% to 215.0 million tons averaging 0.197% TCu and containing 846.8 million pounds of copper.
The step-out drilling also encountered intercepts of primary porphyry copper-type mineralization along the northern fence of holes, which may represent the fringe of a major copper deposit to the north.
The resources quoted in the tables below are based on a three-year average copper price of US$3.03 per pound. For the leachable, SX/EW recoverable resources a base case cutoff grade of 0.12% TCu has been applied. For the sulfide resources that would be recoverable by conventional flotation methods, a base case cutoff grade of 0.15% TCu has been applied. These cutoff grades have been developed based on average mining costs for similar sized operations and from cost estimation services, using a metallurgical recovery of 90% of the oxide copper grades for the SX/EW material and a metallurgical recovery of 88% for the conventional flotation material, and a smelter charge of US$0.50 per pound for processing conventional flotation concentrates
The 2009 drill-hole database contained 450 drill-holes from both Quaterra and prior companies. The 2010 drilling added 8,547 copper assays to the 26,554 existing copper assays that were used in the 2009 report. The 2010 updated resource model used the same estimation parameters as were developed and reported in the 2009 technical report, with the exception of:
- The physical dimensions of the block model were increased to include the new drilling. The 2010 model contains 512 blocks in the x-direction, 400 in the y-direction and 150 levels. The block size utilized was 25x25x20 feet.
- The interpretation of the mineralized zones for the oxide, mixed (transition) and sulfide mineralization were updated based on the 2010 information.
- Finally, slight modifications to the search parameters for the inferred class were also made.
Quaterra has commissioned Tetra Tech to prepare a Canadian National Instrument 43-101 (NI43-101) compliant Technical Report for the MacArthur Copper Project. The Tetra Tech resource estimate for the project is included with a description of the project history, geology, mineralization, sampling procedures, and laboratory Quality Assurance/Quality Control procedures. The Qualified Person for the MacArthur Copper Project resource estimate, the technical report and subsequent news release is Mr. John W. Rozelle, P.G., Principal Geologist for Tetra Tech, Golden Colorado.
