Echo Bay boosts its stake in Minefinders

Encouraging results from the first phase of drilling at the Dolores gold-silver property in Mexico have prompted Echo Bay Mines (ECO-X) to increase its equity interest in Minefinders (MFL-V).

The major will raise its equity interest in the Vancouver-based company to 15% in return for payment of $2.4 million, to be used for future exploration.

Echo Bay will exercise warrants to acquire 400,000 shares of Minefinders at $3 per share and purchase an additional 480,000 units at $2.50 per share.

Each unit consists of one common share and half a warrant. Each full warrant entitles Echo Bay to buy a common share for $3 per share.

After the completion of the unit purchase, Echo Bay will hold 1.3 million of the 8.5 million outstanding shares of Minefinders.

The Dolores property hosts a volcanic-hosted, epithermal system in the Sierra Madre mountains of Mexico’s Chihuahua state. Minefinders has identified three targets — the Chabacan, Hondo, and Norte zones — along a 2.5-mile, northwest-trending structure. Trenching and outcrop sampling along the trend have encountered encouraging gold values.

To date, 22 holes have been drilled for a total of more than 15,000 ft.

Assays have been received from 18 holes, 15 of which returned significant gold values. Highlights include hole 19, which intercepted 138 ft. of near-surface mineralization grading 0.084 oz. gold and 0.76 oz. silver per ton. The interval included a 13-ft. zone grading 0.306 oz. gold and 1.26 oz.

silver per ton.

Minefinders plans to drill an additional 26,000 ft. in a second phase of exploration. Infill drilling on the main part of the Chabacan zone will provide information for an initial resource estimate.

Meanwhile, the junior continues to add to its land position, which now totals 126,000 acres.

Echo Bay has the option of funding and managing a feasibility study after the completion of the third phase of exploration. Upon the completion of the study, the company can elect to become operator of the project and buy a 60% joint-venture interest.