Press Release Archive - 2009

The Los Sulfatos porphyry copper and breccia complex is located approximately 6km south of Anglo American’s Los Bronces mine and some 50km to the north-east of Santiago in central Chile. Results of recent exploration drilling programmes demonstrate the existence of a world class copper deposit.

Based on 22,000 metres of drilling, the current Inferred Mineral Resources are estimated at 1.2 billion tonnes at 1.46% Cu and 0.02% Mo containing an estimated 17.5 million tonnes of copper. The resource estimates are compliant with the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) and are quoted above a zero cut-off but are contained within a nominal 1% Cu envelope. The deposit is open in various directions and in terms of overall potential for the Los Sulfatos exploration target, the tonnage is expected to be between four and five billion tonnes at grades of between 0.8% Cu and 1.0% Cu.

The Chief Executive of Anglo American’s Base Metals business, Brian Beamish, said, “I am pleased to announce the results of the Los Sulfatos exploration work, showing a further very sizeable and high quality copper prospect near our Los Bronces operation. Anglo American has a proud heritage of building and operating safe, modern mines in Chile and we look forward to working with the regulatory authorities and local stakeholders to develop Los Sulfatos in a similar way.”

In order to delineate this deposit more efficiently and safely, Anglo American will be developing an exploration tunnel from which to drill the deposit. The tunnel is expected to cost in the order of $60 million and will be excavated by a tunnel boring machine which is currently being assembled on site. The excavation of the tunnel is expected to take two years.

Location and Geology

The Los Sulfatos prospect sits within and under high mountain ridges at altitudes between 4,000 and 4,500 metres. Anglo American recognises the environmentally challenging and sensitive location of the Los Sulfatos prospect and, as with other operations, remains committed to working with the regulatory authorities and other stakeholders to achieve high standards of environmental stewardship during all phases of project development.

The porphyry copper mineralisation is contemporaneous and closely associated to the mineralisation at Los Bronces and the adjacent Rio Blanco deposit and is part of a district that is developing into one of the largest known concentrations of copper mineralisation in the world.

Copper sulphide mineralisation is hosted in a multi-phase porphyry stock and breccia complex. The central and deeper portions are characterised by disseminated hypogene bornitechalcopyrite-(digenite)-molybdenite mineralisation, hosted in porphyry intrusive and strongly altered andesite volcanics. Selected drill intercepts in this part of the deposit include Hole 10, from 13 to 1,003m, 990m @ 1.26% Cu (including 522-1003m, 481m @ 1.53% Cu) and Hole 22, from 516 to 1,003 metres, 487 metres @ 1.74% Cu.

To the north, the mineralisation style is dominated by high grade geometrically complex breccia bodies with chalcopyrite-pyrite mineralisation, cut by low-grade late stage porphyry intrusions. Hole 13 in this area intersected from 81m to 798m, 717m @ 3.6% Cu (including 81- 363m – 282m @ 6.1% Cu) in a tourmaline-chalcopyrite breccia body.

A smaller porphyry stock with disseminated chalcopyrite-bornite mineralisation and grades averaging close to 1% Cu, outcrops in the south of the prospect. The porphyry complex extends a further one kilometre to the north on Anglo American property. Due to access difficulties, this extension has not been drilled and remains untested.

Drilling Campaigns

The first drilling in the prospect was carried out between 1965 and 1967 by the French company Peñarroya, at that time owner of Cia Minera Disputada de Las Condes. This was followed by drill campaigns in 1991 by Exxon and Anglo American from 2005 to 2008.

To date, just over 22,000 metres have been drilled in 39 holes on the prospect. The most recent drilling in 2008 successfully confirmed the extents and continuity of the high grade mineralisation extending the outline of the bornite-rich ~1.5% Cu mineralisation, which is still open in a number of directions.

The mineralisation in the central high grade core shows higher molybdenum contents averaging >0.03% Mo. Gold and/or silver credits are also expected.

The assays for the 2007 and 2008 drill campaigns, which form the basis of the resource statement, have been subjected to strict quality control and quality assurance.

Mineral Resource Estimation

For the estimation of mineral resources, grade envelopes were interpreted manually based on the local geology and assisted by “indicator” techniques. The grade envelopes were at nominal cut-offs of 0.5% Cu, 0.7% Cu, 1% Cu and 1.5% Cu. There is excellent continuity of the grades in some parts of the deposit.

Copper and molybdenum grades were interpolated into blocks using ordinary kriging. Model validation was carried out visually, comparing sample and block grades on plan and section and no obvious errors were noted. The average grades within the different zones for both copper and molybdenum also compare well between blocks and composites.

The mineralisation shows good continuity of grade and therefore, in spite of relatively limited drilling, the mineralisation within the 1% Cu envelope is able to be considered as Inferred Resources under the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code – 2004). Only blocks above 3,200 metres above sea level are classified as resources and are reported at zero cut-off within the envelope. The 3,200m level is the level of deepest drilling and the deposit is open in depth. Preliminary mine scoping and valuation studies have shown that the mineralisation is amenable to open pit and underground mining methods, confirming that the resources have “reasonable prospects for eventual economic extraction” as required by the JORC Code.

As such, the Inferred Mineral Resources at Los Sulfatos are currently estimated at 1.2 billion tonnes at a grade of 1.46% Cu and 0.02% Mo containing an estimated 17.5 million tonnes of copper. Considering that the deposit remains open in a number of directions, the overall exploration target of Los Sulfatos, including the current resources, is expected to contain between four and five billion tonnes at grades of between 0.8% Cu and 1.0% Cu.

Competent Person Statement

The information in this press release that relates to Resources is based on information compiled by Graeme Lyall, who is a member of the Australasian Institute of Mining and Metallurgy. Mr. Lyall is a full-time employee of Anglo American Chile and has experience which is relevant to the style of mineralisation and type of deposit under consideration and is qualified as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Graeme Lyall consents to the inclusion in this press release of the matters based on his information in the form and context in which it appears.

This mineralisation is defined as Resources under the JORC Code and therefore is considered to have a reasonable prospect of being economically extracted in the foreseeable future. Estimates of such mineralisation are based largely on geological information and sampling with only preliminary consideration of mining, economic and other factors and are not yet classified as Proved or Probable Reserves. While in the judgment of the Competent Person there are reasonable expectations that all or part of the Resources will eventually become Proved or Probable Reserves, there is no guarantee that this will occur as the result depends on further technical and economic studies and prevailing economic conditions in the future.