Ecuadorian Minerals options Chaucha play

Toronto-listed junior Ecuadorian Minerals (EM) can acquire a 65% interest in the Chaucha property in southern Ecuador.

The 5,100-hectare property, held by Ag Armeno Mines and Minerals (VSE) and Ecuadorean Copperfields (VSE), is 30 km northeast of Ecuadorian Minerals’ wholly owned Gaby gold deposit.

The Chaucha hosts a known porphyry copper system. In the 1970s and ’80s, Japanese and Belgian interests drilled out 130-140 million tonnes of a geologic resource grading 0.39-0.41% copper. About 12,290 metres of core were drilled, but, to date, none has been analyzed for gold.

James Kasten, manager of investor relations for EM, says the Chaucha is a good exploration target with plenty of potential.

“The company brings two concepts to its exploration plan,” he explains.

The first involves evaluating the gold potential within the copper resource. Seven areas of copper mineralization have been identified, yet only one was drilled to determine the geologic resource. EM plans to examine the remaining six for both copper and gold in the hope of dramatically increasing the size and value of the tonnage.

Stream sediment and follow-up soil sampling by Armeno in the main Naranjo copper zone resulted in significant gold values over an 800-by-800-metre area. EM’s preliminary work on the property has confirmed the gold potential of the area.

The second concept EM plans to apply to its exploration of Chaucha involves looking for gold mineralization outside of areas of known copper mineralization. The company intends to examine the outer zones of the porphyry system, away from the copper zone. Again, preliminary work has displayed the potential for peripheral gold mineralization on the property.

In the northeastern part of the property, EM collected rock samples within a 400-metre-wide zone, and these were found to contain stockwork veining, fracturing and silicification. Another 1,250-by-500-metre area of hydrothermal alteration, southeast of the copper resource area, contains anomalous gold values from soil samples.

For an initial 55% interest in this exploration play, EM will pay Armeno US$505,000 and 200,000 shares of stock over the next four years. EM is required to spend US$3 million in exploration expenses over that time, US$200,000 of which will be spent in the first year.

The company can gain the full 65% interest by issuing another 200,000 shares of EM and paying a further US$1.5 million within 180 days after earning the first 55%.