Focus Ventures’ (TSXV: FCV) Bayovar 12 phosphate project in Peru is shaping up quickly: the junior expects to release a maiden resource estimate in the third quarter, less than six months after announcing its first drill results from the project.
Those first drill results, consisting of five vertical holes drilled 800 metres apart (east-west) and to up to 110 metres depth, were released in May. They intersected between 13 and 18 horizontal phosphate beds starting at a depth of 28 metres. The 11 main beds returned an average grade of 15.1% P2O5.
The second set of Bayovar 12 drill results, released today, intersected the same phosphate beds in six holes drilled 800 metres to the south, with the main beds averaging 14.8% P2O5.
The width of the phosphate beds averages 0.54 metre.
The results showed that the phosphate layers at Bayovar 12 are quite regular over long distances — so far up to 4 km — a characteristic typical of a sedimentary phosphate deposits.
Because of that regularity Focus expects its initial 20-hole program will suffice for an inferred resource calculation.
The company says its target for a maiden resource is 100-150 million tonnes grading 12-18% P2O5.
Focus optioned Bayovar 12 last September from Juan Paulo Quay S.A.C. The junior can earn a 70% interest in the project through escalating payments totalling $4 million.
Focus has already paid $250,000. A $750,000 payment is due on Aug. 26, followed by a hefty $3-million payment in late February 2015.
The company will also have to spend $1 million on exploration in its first year at Bayovar 12 and up to $15 million in total. Focus must also complete a prefeasibility study within four years, and pay the vendor $1 million on the second anniversary after it receives drill permits for Bayovar 12. Further $1-million payments will follow on each anniversary until a prefeasibility study is delivered.
For this year, Focus has a $3.6-million budget, including the $750,000 option payment in August, drilling, assays, metallurgical work and the resource calculation ($2-$2.3 million), and logistics permits and general and administrative expenses ($500,00).
The company raised $1.25 million in a private placement in April, and says it expects to receive up to $4.7 million this year through the forced exercise of outstanding warrants.
The project is in the Bayovar district, which is in the Sechura Desert, a north-trending basin comprising Miocene-aged rocks covered by recent sand deposits. Phosphate occurs as beds of pelletal phosphate within a sequence of diatomites and sandstones around 200 metres thick.
The geology and mineralization at Bayovar 12 is similar to that of nearby mines, including Vale’s Bayovar mine, one of South America’s biggest phosphate deposits located 15 km to the west. Focus, which is hoping to attract a strategic partner to invest in its fertilizer project in the next 12 months, notes that Vale sold minority stakes in to Mosaic and Mitsui for $660 million in 2010.
Focus shares closed the day essentially unchanged at 27¢. The shares have traded in a 52-week window of 6-35¢ and the company has 60.8 million shares outstanding.