AusQuest Launches Deep Diamond Drilling at Cangallo Copper-Gold Project

AusQuest Launches Deep Diamond Drilling at Promising Cangallo Copper-Gold Project in Peru

AusQuest Limited (ASX: AQD) has commenced a significant diamond drilling program at its 100% owned Cangallo Porphyry Copper-Gold Project in southern Peru, marking a pivotal phase in the company's exploration strategy.

Diamond Drilling Campaign Targets Depth Extensions of Significant Copper Mineralization

AusQuest has launched a strategic diamond drilling program consisting of two holes totaling approximately 1,600 meters at its Cangallo Copper-Gold Project. This initiative represents a crucial step in the company's exploration journey, designed to test mineralization beyond the current drilling depth of approximately 350 meters.

The program aims to accomplish two primary objectives:

• Extend the hypogene copper (sulphide) mineralization intersected in previous drilling
• Provide critical insights into the geological relationships and controls on mineralization, particularly regarding the copper-mineralized tonalite dykes and veins identified in previous Reverse Circulation (RC) drilling

Notably, most RC drill holes from earlier Stage 1 and 2 programs ended in hypogene copper (chalcopyrite) at the depth limit of the drill-rig's capacity (~450m down-hole), strongly suggesting continuation of copper mineralization beyond current depth limits.

Previous Drilling Highlights Exceptional Potential

Earlier exploration work has already yielded impressive results, with previous RC drilling intersecting broad zones of copper mineralization, including:

• 324m @ 0.30% Cu including 160m @ 0.45% Cu
• 330m @ 0.30% Cu including 178m @ 0.40% Cu

These mineralized zones occur within the oxide zone (containing malachite, chrysocolla, and brochantite) and extend from near surface to depths exceeding 200 meters, potentially recoverable through heap leach methods.

Recent geological mapping and rock chip sampling in the southern portion of the prospect has identified highly anomalous copper (>0.5% Cu) and molybdenum values (>10.0ppm Mo) within veins and dykes, indicating the porphyry system extends at least 1,200 meters south of current drilling.

Managing Director's Perspective

Commenting on the program, AusQuest's Managing Director, Graeme Drew, expressed enthusiasm:

"We are excited to be starting to test the potential for hypogene copper below the current level of drilling at Cangallo. We know that porphyry copper systems often have a very large depth extent, so if we are successful in extending the discovery at depth with diamond drilling, this would add significantly to the resource potential of the Cangallo prospect."

Drew also noted that while the initial two-hole program will only test a small fraction of the prospect, it will provide valuable data to help vector toward the centre of the system, where better hypogene copper grades would be expected.

The Porphyry Exploration Thesis

The exploration results to date present compelling evidence for a potentially significant copper porphyry system. While copper and gold mineralization has been identified primarily within volcanic host rocks (andesites and dacites), the presence of tonalite dykes is particularly significant.

These dykes, recognized both at surface and in RC drill-holes, likely represent the source of hydrothermal fluids and copper. However, their relatively small volume compared to the widespread alteration and copper distribution suggests the potential for a much larger intrusive porphyry stock nearby.

The association of higher copper grades proximal to tonalite dykes indicates excellent potential for the nearby porphyry stock to be strongly mineralized.

Understanding Porphyry Deposits: Key to Investor Assessment

Porphyry deposits represent some of the world's largest copper resources and are particularly significant in Peru, the second-largest copper producer globally. These deposits typically share several important characteristics:

• Scale: Often exceeding 1 billion tonnes of ore
• Mining Method: Usually open-pit with favorable waste-to-ore ratios
• Processing: Shallow parts often contain oxide ores processable via heap leach (lower cost)
• Economics: Several profitable operations in the Arequipa District operate with head grades between 0.20% and 0.40% Cu

The Cangallo Project benefits from exceptional location advantages compared to many Peruvian copper projects, being situated close to significant infrastructure, just 25km east of Chala and within 10km of the coast. This favorable positioning can significantly impact development economics.

Strategic Timing and Next Steps

This diamond drilling program represents just the beginning of an aggressive exploration phase:

• Initial assays from the diamond drilling are expected in 6-8 weeks
• Stage 3 Reverse Circulation (RC) drilling is scheduled to commence in November
• Current indicators suggest the center of the system may lie further south, which will be tested in the upcoming Stage 3 RC program

Why Investors Should Track AusQuest

The launch of AusQuest Deep Diamond Drilling at the Cangallo Copper-Gold Project represents a potentially transformative asset for AusQuest, with several compelling investment considerations:

1. Strategic Location: The project's proximity to infrastructure, accessibility, and low altitude provides significant advantages over many Peruvian copper projects.

2. Early Success Indicators: The broad copper mineralization zones already identified suggest the potential for a significant porphyry system.

3. Multiple Mineralization Types: The presence of both oxide copper (potentially recoverable via low-cost heap leach methods) and primary copper sulphides provides multiple development scenarios.

4. Established Mining District: The project is located in the prolific Arequipa District, home to several major copper mines and development projects.

5. Upcoming Catalysts: With diamond drilling results expected in 6-8 weeks and additional RC drilling starting in November, investors can anticipate regular news flow.

The Cangallo Project represents a unique opportunity in Peru's copper exploration sector, combining favorable geology, excellent infrastructure, and a systematic exploration approach. Success with the drill bit could create significant shareholder value and mark a transformative period for AusQuest.

Want to Invest in Peru's Next Major Copper Discovery?

Don't miss the opportunity to be part of AusQuest's exciting journey at the Cangallo Copper-Gold Project in Peru. With diamond drilling now underway and promising initial results showing broad zones of copper mineralisation, this could be the beginning of a significant discovery story. For comprehensive investor information and to stay updated on drilling results from this strategically located project, visit www.ausquest.com.au today.