East Asia grows Miwah to the north, west (June 07, 2010)

VANCOUVER — New drill and sampling results continue to expand the gold zone at East Asia Minerals’ (EAS-V) Miwah project in Indonesia, with recent results extending mineralization to the west and connecting two northern zones.

The Miwah project has already established itself as a major gold discovery, even though it does not yet carry a defined resource. The gold zone in Indonesia’s Aceh province currently stretches for 1.2 km east-to-west, with a width of 300 to 400 metres; the west end is known as the Miwah Bluff while the central and eastern portions together comprise the Main Miwah zone. A fault separates the Bluff from the Main zone, though the unmineralized fault is in places only a few tens of metres wide. A disconnected southern zone lies 300 metres south of the Bluff zone and is known as the South Miwah Bluff zone.

East Asia believes the main tabular zones, which carry lower-grade gold mineralization, are cut through by vertical diatreme breccia feeder zones carrying higher grades. For example, some 2,500 metres of channel sampling across the zones have returned an average grade of 2.35 grams gold per tonne. But channel samples testing the diatreme breccia zones have returned such results as 83.59 grams gold over 24 metres and 20.14 grams gold over 12 metres.

The two key directions for expansion drilling at present are to the north and west. Until recently, East Asia’s geologists thought another fault, lying west of the Bluff zone, cut off mineralization in that direction.

But in recent months prospecting crews have discovered favourable massive and vuggy silica exposed in erosional window outcrops up to 600 metres northwest of the Bluff zone, defining a new area known as the Signal zone.

Initial chip samples from the Signal area returned values up to 6.8 grams gold while channel sampling returned a best result of 1.3 grams gold over 14 metres. As East Asia stated in a recent release, “Combined with the similarity of host rock and alteration to the Miwah Main zone, it is believed that the Signal area represents potential to greatly expand the east-to-west continuity of the gold mineralization.”

In addition, drills are slowly moving the zone’s northern boundary farther north. Starting at the Miwah Bluff zone, East Asia has been marching one of its drill rigs northward, to date testing 400 metres of expansion potential. In April one of those holes, hole 24, returned 3.96 grams gold over 111 metres, starting 98 metres downhole and including 15.74 grams gold over 22 metres. East Asia followed up on that hit with hole 25, drilled from the same collared but pointed westward towards the Signal area.

The core returned several short intercepts, indicating gold mineralization hosted in a structural inter-fingering of favourable alteration with less permeable diorite horizons, due to the Rusa fault that had been thought to indicate the ultimate edge of the zone.

The mineralized intercepts from hole 25 included 1.15 grams gold over 7 metres, 1.26 grams gold over 8.5 metres, 1.64 grams gold over 3.9 metres and 1.09 grams gold over 9.5 metres.

Then hole 26 tested for mineralization to the east of hole 24 and successfully connected the northern part of the Bluff zone to the northern part of the Main zone. Hole 26 returned 1.01 grams gold over 159 metres, starting 107 metres downhole.

East Asia is now awaiting assay results for further holes in the area. Hole 29 probed north of hole 24 while hole 27 and 28 tested for continuity between Miwah Bluff and the developing northern zone. The company says all three encountered visually altered and mineralized rock at target depths.

The company is currently moving a third drill rig to Miwah, emboldened to increase its exploration spending by an $18.9-million non-brokered private placement. The company sold 2.5 million shares at $7.54 apiece to two gold funds that were already long-term East Asia shareholders.

The third rig will work on infill drill targets within the Main Miwah zone and the Miwah Bluff zone. East Asia also has plans to test the Moon River target, which is 400 metres north of the Main zone, and the Sipopok area, several hundred metres farther north.

East Asia’s share price fell 72¢ on the results from holes 25 and 26, but the fall was not enough to annul the 90¢ it had gained over the previous five days and kept the company’s share price reasonably close to its 52-week high of $8.73. A year ago East Asia shares were trading for just 45¢. The company has 72 million shares outstanding.