AusQuest has confirmed a continuous 1.5km copper-gold mineralised corridor at its Cangallo project in Peru, with broad intercepts and emerging high-grade zones. Diamond drilling has begun, revealing significant vertical extent and setting the stage for deeper exploration.
- Stage 3 RC drilling defines 1,500m mineralised corridor at Cangallo
- Multiple broad copper-gold intercepts including high-grade zones over 0.5% Cu
- Diamond drilling confirms vertical extent and targets deeper sulphide mineralisation
- Maiden drilling at Playa Kali and Lantana highlights IOCG potential
- Australian projects funded by South32 with drilling planned at Coober Pedy and Balladonia
Cangallo Drilling Reveals Large-Scale Copper-Gold System
AusQuest Limited (ASX:AQD) has delivered further evidence of a substantial porphyry copper-gold system at its Cangallo project in southern Peru. The recently completed Stage 3 Reverse Circulation (RC) drilling program defined a continuous mineralised corridor exceeding 1,500 metres in strike length. Broad intercepts of copper-gold mineralisation, some extending over 200 metres at grades around 0.25% Cu, underline the scale and continuity of the system.
Notably, higher-grade copper intervals (+0.5% Cu) were predominantly encountered in the southern sector of the prospect, with standout results including 12 metres at 1.09% Cu from 112 metres and 12 metres at 0.77% Cu from 102 metres. These findings hint at a potential porphyry centre in this area, reinforcing optimism about the project's resource upside.
Diamond Drilling Confirms Vertical Mineralisation Extent
Diamond drilling commenced late in the quarter with the first hole (CANDD003) reaching approximately 880 metres depth. Visual logging revealed extensive copper mineralisation in stockwork veins from near surface to around 550 metres, with chalcopyrite, bornite, and molybdenite observed. Below this depth, mineralisation density decreases but remains present, confirming a substantial vertical extent for the porphyry system. Assay results for this hole are pending, with further diamond drilling planned to probe deeper hypogene sulphide zones beyond the current RC drilling limits.
This deeper drilling phase is critical to vector towards higher-grade mineralisation, a strategy that could significantly enhance the project's economic potential. The program's timing and scope depend on permitting progress, with Stage 4 drill pad approvals expected in the coming quarter to facilitate extensions into southern and eastern targets.
Exploration Expands at Playa Kali and Lantana Prospects
AusQuest also advanced exploration at the Playa Kali and Lantana prospects in Peru. Maiden reconnaissance RC drilling at Playa Kali intersected anomalous copper and molybdenum values within a package of volcanics and sediments, reinforcing the prospect's potential for iron-oxide copper-gold (IOCG) mineralisation. Significant intercepts included 12 metres at 0.2% Cu and 0.05 g/t Au, and 28 metres at 218 ppm Mo.
At Lantana, nine RC holes were completed to test for porphyry copper mineralisation indicated by surface geochemistry. Assay results are awaited, with the program designed to target anomalous copper, molybdenum, and bismuth values identified in earlier sampling.
Australian Projects Progress Under South32 Alliance
In Australia, AusQuest's exploration activities continue under a Strategic Alliance Agreement (SAA) with South32 Limited. At Coober Pedy, diamond drilling is scheduled to resume in early August following a pause due to challenging drilling conditions. The program aims to test geophysical targets for IOCG mineralisation near the Elizabeth Creek Fault Zone.
Meanwhile, at the Balladonia project in Western Australia, permitting advances have set the stage for an ~8,000-metre RC drilling campaign, now anticipated to commence in the fourth quarter of 2026. Heritage surveys at Mt Davis will begin shortly to enable geophysical surveys targeting sediment-hosted base metals.
Financial Position and Upcoming Catalysts
AusQuest ended the quarter with approximately A$6.4 million in cash after investing about A$4.5 million in exploration. This cash position includes funding support from South32 for Australian drilling programs. The company’s cash burn rate and reliance on alliance funding will be key factors to monitor as exploration intensifies.
Looking ahead, the September quarter will focus on completing the Stage 3 diamond drilling at Cangallo, advancing Stage 4 permitting for a substantial drilling campaign exceeding 50,000 metres, and progressing metallurgical studies. In Australia, drilling programs at Coober Pedy and Balladonia are poised to ramp up, potentially unlocking new discoveries.
While assay results from some diamond holes remain pending, the consistent expansion of the mineralised envelope and the emergence of higher-grade zones suggest AusQuest’s Cangallo project is shaping into a significant copper-gold target. The coming months will be pivotal in confirming the depth and grade continuity essential for resource definition.
Bottom Line?
AusQuest’s drilling advances at Cangallo confirm a large, vertically extensive copper-gold system, but pending assays and regulatory approvals will be critical to unlocking its full potential.
Questions in the middle?
- Will upcoming diamond drill assays confirm higher-grade zones at depth at Cangallo?
- How quickly will Stage 4 permitting progress to enable extensive drilling extensions?
- Can AusQuest maintain funding momentum to support simultaneous drilling in Peru and Australia?