Ecuador Gold and Copper boosts resources at Condor

VANCOUVER — The jurisdiction may not be ideal given recent events, but Calgary-based explorer Ecuador Gold and Copper (TSXV: EGX) is outlining some sizable resources at its Condor gold-silver-copper project in Ecuador’s Zamora region. On July 23 the company released an updated resource estimate on Condor that incorporates 10,000 metres of drilling, and bumps inferred resources by 249% and indicated resources by 39%.

A big selling point for Condor had been its potential continuity with Kinross Gold’s (TSX: K; NYSE: KGC) Fruta del Norte multi-million ounce gold deposit — Ecuador Gold’s concessions are directly north — but that fell apart when Kinross took a US$720-million writedown at Fruta del Norte and abandoned the project in June.

But this hasn’t slowed down Ecuador Gold, with the company closing a US$1-million private placement in June, while polishing off a 13,000-metre drill program.

Resources at Condor are split across two mineralization styles. The northern portion of the property is home to two epithermal gold deposits — namely Los Cuyes and Soledad — which boast a slightly higher average gold grade at a lower tonnage.

Condor’s southern area hosts a conventional copper-gold porphyry deposit called Santa Barbara, featuring lower gold grades that are boosted by marginal copper credits. Ecuador Gold also released a maiden resource on its El Hilto copper-molybdenum porphyry deposit, which lies around 4 km east of Santa Barbara.

Condor’s global indicated gold resources are confined to Los Cuyes and Soledad, and total 82.8 million tonnes grading 0.76 gram gold per tonne and 6.94 grams silver per tonne for 2.04 million contained oz. gold and 18.5 million contained oz. silver. Ecuador Gold also has a smaller, high-grade resource at its Enma deposit totalling 1 million tonnes at an average grade of 2.88 grams gold and 32.83 grams silver.

The big increase came in the inferred category, however, where continued expansion at the company’s Santa Barbara South zone has led to a large jump in tonnage. Previously, Santa Barbara hosted a small gold resource of around 21 million inferred tonnes grading 1 gram gold. Delineation drilling has since boosted global inferred resources to 241 million tonnes averaging 0.56 gram gold and 0.57 gram silver, for 4.4 million contained oz. gold and 4.5 million contained oz. silver.

Santa Barbara South also features a copper component and has been the big contributor for Ecuador Gold, with inferred resources at the target clocking in at 216 million tonnes of 0.56 gram gold and 0.09% copper. Maiden resources at the company’s El Hilto target total 161 million inferred tonnes grading 0.31% copper, for 1.1 billion contained lb.

“The updated resource estimate at Condor represents a substantial increase in the company’s resource base,” says president and CEO Glenn Laing, estimating that Ecuador Gold’s cost of discovery has been $2 per oz. to date.

“We are extremely encouraged by the results from our initial [phase-one] drill program, and new results at Santa Barbara indicate continued expansion to the north and east of the mineralized South zone, as we continue to step out from areas of known mineralization to increase resources,” he adds.

Laing is referring to drill holes 26 and 27, which the company reported in mid-June. Hole 26 is a stepout hole 150 metres north of the Santa Barbara resource that cut 146 metres grading 0.9 gram gold and 0.12% copper from 204 metres depth. Hole 27 was collared at 100 metres southeast of known mineralization, and cut the company’s longest intercepts to date, with 476 metres averaging 0.68 gram gold and 0.12% copper from 266 metres depth.

Ecuador Gold is awaiting results on the final four holes from its 13,000-metre program, and expects to release another resource update on Santa Barbara by October. The company will likely need more cash moving forward, with a working capital deficiency of US$1.7 million at the end of April.

Ecuador Gold’s shares reached a midday high of 11¢ after news of Condor’s resource update before closing up 17% at 7¢ at press time. The company traded just under 2 million of its 142 million outstanding shares during the day and closed with a $9.95-million market capitalization.