East Asia hits high-grade copper at Khok Adar (October 03, 2005)

Ulaanbaatar, Mongolia — Drilling by East Asia Minerals (EAS-V) on its 1,000-sq.-km Khok Adar project in western Mongolia has tapped significant high-grade oxide copper mineralization.

Hole 5, a vertical reverse-circulation (RC) hole, intersected 56 metres averaging 7.4% copper and 34 grams silver per tonne, including a 7-metre interval grading 17.4% copper and 47 grams silver in the EC-1 (exotic copper) zone.

Hole 6 cut 81 metres of 4.6% copper and 22 grams silver, including a 27-metre interval with native copper sections grading 8.5% copper and 37 grams silver per tonne, and 7 metres of almost 14% copper with 63 grams silver per tonne. The hole was drilled at a north-northeast azimuth with a dip of minus 46 to a depth of 145 metres on the EC-1 zone.

Four other holes also successfully tested both oxide and mixed oxide-sulphide, as well as secondary sulphide mineralization on EC-1, Zone 1 and a new oxide zone located 700 metres east-southeast of EC-1.

The EC-1 zone occurs within brecciated quartzites, west of a north-northeasterly-trending structure, and contains abundant oxide copper minerals (including azurite, malachite, cuprite, tenorite, chrysocolla and native copper) that fill fractures and pore spaces. Khok Adar is a structurally controlled copper-silver-zinc mineralized system within Cambrian-aged metasediments that have undergone numerous later-phase epithermal alterations.

Previous Russian exploration work on the eastern portion of the project defined Zone 1, an area of chalcocite enrichment identified in a mixed sulphide-oxide zone.

Excited by its results, East Asia believes a significant copper source may exist in the project area, as known sulphide zones are not of sufficient size to account for the significant enrichment blanket. The company is one year into its 3-year option deal to earn 75% in Khok Adar and must spend US$1 million on exploration over the course of the agreement.

At the well-attended Discover Mongolia 2005 International Mining Investors Forum in Ulaanbaatar, East Asia also announced the acquisition of a number of additional Mongolian mineral projects.

One such acquisition is the almost 20-sq.-km low-sulphidation epithermal gold project in Dundgovi Aimag in south-central Mongolia. The Deren prospect is situated in the large Undershil epithermal belt that extends northeasterly into Siberia from central Mongolia. Earlier Russian work discovered gold and banded epithermal quartz veining along with kaolin clay alteration over an area 6.5 km long and up to 200 metres wide.

Speaking at the forum, East Asia President Lyndon Bradish outlined exploration plans for the site.

“While at first glance, Deren appears as an early stage prospect, it is close to being drill ready,” he said.

Building on existing Soviet-era exploration data, the company plans to drill before the end of the year, following a surface geochemistry program to delineate metal zones.

The company also recently grabbed four uranium projects in east-central Mongolia. The Elgenii, Enger, Ikh Khat and Shavar properties all have known stratiform uranium mineralization hosted in sandstones and siltstones. The projects show some similarities to roll-front type deposits, indicating potential amenability to in situ leaching extraction, should an economic deposit be delineated.

Once again, all the projects had undergone Russian exploration in the 1970s and 1980s, including airborne radiometric surveys, ground geophysics, surface sampling and trenching, and, on the Enger project, significant drilling.

Investors have become enamoured with the growing Mongolian explorer, driving up East Asia’s share price by 31% to the $1.23-level following the announcement of the high-grade copper assays.