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Article from HighGrade.net

THE timing could not have been better. In the same week that heavyweight Teck Cominco was buying Aur Resources and describing Chile as “the best country for mining and long term growth”, the ambitious copper miner Tamaya Resources added significantly to its Chilean portfolio by acquiring copper assets from AIM-listed Latitude Resources.

The $US20 million-valued scrip deal involves five Latitude properties (including one at near full feasibility stage), located on the prospective IOCG belt of the Coastal Ranges of Chile that host Tamaya’s existing operations.

Speaking from New York, Tamaya executive chairman Hugh Callaghan was typically upbeat. “Quite simply, the Latitude deal gives us scale, substance and a portfolio in Chile that we believe will emerge as the most significant portfolio in Chile outside of the majors over a 2-3 year period,” he told HighGrade.

He believes that Tamaya could have significant copper operations in three separate production areas within 3-4 years, including its existing Dalmacia Arco Iris centre (Punitaqui operations), and the newly acquired Filipina Grande and Santa Dominga properties.

A recent review of Filipina Grande commissioned by Latitude and carried out by geological and mining consultants SRK, reportedly showed it to have potential to host more than 60 million tonnes of resources, sufficient to support a $US235 million, 8000t per day (three million tonnes per annum) underground copper-gold mine annually producing 30,000tpa of copper and 22,000oz of gold.

Tamaya pointed out that the SRK report suggested that an operation of this scale would have an NPV value of $US88.7 million at US$1.40/lb copper/ US$500/oz gold and net of Chilean royalties and taxes.

Filipina Grande currently contains an inferred 12Mt grading 1.28% copper and 0.34gpt gold (sulphides) and 1.9Mt at 0.83% copper (oxides), with Latitude budgeting in May expenditure of about $US1.5 million over 10 months to test new target areas and test new target areas in order to increase the resource base through further exploration.

While indicating it was too early to be definitive, Callaghan said Tamaya would be “disappointed if we weren’t into a full feasibility in 2008 with the hope of financing and starting development in 2009”.

Callaghan believes a 6000-8000tpd operation is possible, with the aim being to fast track the project development in order to take advantage of the strong pricing environment while at the same time increasing the resource such that the project can be expanded on a modular basis as appropriate.

A doubling of the resource is seen as the minimum requirement for a production decision.

Santa Dominga is considered by Tamaya to have potential for 50Mt of resources, with a well defined target and substantial high grade intersections of over 50m at 1.6% Cu, 0.35 gpt gold and 30-40% iron.

Callaghan told HighGrade Latitude’s executives had a funds management background and had “done a very good job identifying and building up the resources” of the Chile properties.

“I think they’ve recognised that this would have more leverage in the hands of operators who already have a team on the ground and can take this forward into production,” Callaghan said. “It’s a sign of their confidence that they were insistent on a scrip-based deal, and from our discussions with them they intend to stay supportive shareholders going forward.”

The busy Tamaya is expanding production to 13,000t of contained copper from its existing Cinabrio-Punitaqui-Dalmacia operations (by the end of 2007), and recently concluded at takeover of emerging Armenian gold developer Iberian Resources. (See HighGrade, April 30, 2007).

The company is aiming to complete a secondary listing on the Toronto market in November, with Callaghan claiming strong interest in the company from brokers in Canada and investors elsewhere in North America.