Monterrico shares strong on Rio Blanco drill results

London-based junior Monterrico Metals (LSE: MNA) shares rose 2.62% to a near all-time high of 1.96 pounds sterling Monday following the release of initial results from bankable feasibility study drilling at its Rio Blanco copper-molybdenum project in Peru. The first two holes returned 126m grading 1.03% copper equivalent and 60m grading 1.18% copper equivalent from the enriched near surface zone and 194m grading 0.61% copper equivalent and 84.3m at 0.58% copper equivalent from the underlying primary ore zone, it said in a statement. Both holes bottomed in mineralization, said Monterrico. "We plan to drill between 20,000m to 28,000m to complete feasibility work in the first quarter of 2005," company official Raymond Angus told BNamericas from Monterrico's Lima office. The work, to be funded by a recent 10.2mn pound (about US$17.9mn) financing, will include geo-technical, step-out and sterilization drilling, he said. Rio Blanco's recently released pre-feasibility study envisages a production scenario of 10Mt/y using open cut and milling methods. This would give output of about 100,000t/y copper in concentrate for the first seven years, the company said. Estimated capital costs were put at US$191mn, and an internal rate of return was calculated at 33% using a copper price of US$0.90/lb. Monterrico is now assessing the molybdenum and silver grades that may be recovered, likely to result in improved project economics. It is also reporting the molybdenum analysis results and total copper equivalent. Henry's Hill contains an indicated and inferred resource of 177Mt grading 0.98% copper using a 0.70% copper cutoff, according to an estimate by Snowden Mining Industry Consultants. Since the beginning of the year, Monterrico's share price has soared from about 44 pence on the back of its Rio Blanco project, located on Peru's northern border with Ecuador.