Quaterra Signs Earn-In Agreement With Freeport-McMoRan Exploration Corporation for Peg Leg Copper Project in Arizona
Thursday, August 27th 2009
Quaterra Resources Inc. a junior exploration company focused on making significant mineral discoveries in North America announced it has signed an earn-in agreement with Freeport-McMoRan Exploration Corporation of Phoenix, Arizona (FMEC), for the Company’s Peg Leg copper project in Arizona.
In the terms of the agreement, FMEC has the exclusive right and option to acquire a 70% ownership interest in the Peg Leg project by paying the 2009 BLM claim maintenance fees and spending US$3 million on exploration by December 31, 2012. Except for the 2009 claim maintenance fees, which are a firm commitment, all other exploration expenditures are optional.
Upon FMEC earning a 70% interest in the Peg Leg project, the parties have agreed to joint venture the further exploration and, if warranted, development of the Project on a 70/30 basis. The joint venture will be on standard terms including dilution for failure to contribute a party’s share of costs. FMEC will be the initial operator under the joint venture.
The Peg Leg porphyry copper prospect is located in south-central Arizona along the western flank of the Tortilla Mountains, 20 miles east of the Poston Butte copper deposit and 12 miles south of the Ray porphyry copper deposit. This region has the highest density of known porphyry copper deposits in the world. The primary target is a classic San Manuel-Kalamazoo type deposit with the possibility of higher copper grades associated with either a classic chalcocite blanket, or with abundant diabase as at Ray.
Quaterra controls approximately 11 square miles of mineral rights over the prospect, including 247 unpatented U.S. lode claims and three Arizona State prospecting permits. A prominent feature of the prospect is a large IP (chargeability high, resistivity low) geophysical anomaly that extends over an area of 10 square miles, a major part of which has not been drill-tested.
Five core drill holes totalling 11,726 feet were drilled by Exxon Minerals in the early 1980s. They ranged in depth from 1,948 to 3,283 feet and targeted a small part of the anomaly where they encountered alteration and low grade copper mineralization interpreted to represent the margins of a large porphyry copper system. The large size of the target and the structural complexity of the area suggest that shallower oxide and/or sulfide mineralization also may be present.
FMEC’s parent company, Freeport-McMoRan Copper & Gold Inc. (FCX), is the world’s largest publicly-traded copper company.
