Changes to a joint-venture agreement provide Ecuadorian Minerals (TSE) with an option on the remaining half interest in the Gaby porphyry gold project.
The Vancouver-based junior already holds an option to acquire 50% by paying US$3.5 million, of which US$850,000 has been paid. The new agreement enables Ecuadorian to buy the remainder for US$10.4 million over four years, ending in July, 1999.
The agreement also postpones a US$2-million payment related to the first half interest. The payment was to be due July 16, 1996, but is now split into two payments of US$1 million, due July 16, 1996, and July 17, 1997. Ecuadorian plans to carry out more surface work around the Gaby deposit to define drill targets, particularly to the east where previous sampling returned encouraging results of up to 25.9 metres grading 4.7 grams gold per tonne. Recent estimates put the total resource at almost 50 million tonnes grading 1 gram.
The estimate is based on more than 16,000 metres of drilling within a horseshoe-shaped porphyry body measuring 975 metres in length, 180 metres in width and more than 480 metres in vertical thickness.
The mineralization is sulphidic and will require milling. Preliminary testing returned recoveries of more than 80%.
In a move to expand its holdings in the area, Ecuadorian is earning a 51% interest in Zappa Resources’ (VSE) Guadalupe concession.
The property adjoins the southern portion of the Gaby deposit, and the gold mineralization encountered on Guadalupe is believed to be continuous with Gaby.
Zappa’s drilling returned encouraging values, including a 160-metre intersection grading 1.42 grams in hole 12 and a 54-metre intersection in hole 2 grading 1.47 grams. The mineralized zone remains open in several directions.
Ecuadorian can earn the 51% interest by spending US$3 million over three years and making certain stock and cash payments to Zappa.
The agreement does not include Zappa’s Papa Grande concession, which adjoins the Guadalupe to the east. Zappa is drill-testing targets at Papa Grande where recent trenching returned values of up to 2.4 grams over 68 metres within a hydrothermal breccia measuring 800 metres east-west by 500 metres north-south.
Results from the first seven holes at Papa Grande include 1.14 grams over 163 metres in hole 2; 0.35 grams over 148 metres in hole 3; 0.86 grams over 131 metres in hole 5; 0.81 grams over 48 metres in hole 6; and 118 metres grading 1.1 grams in hole 7. Hole 1 was drilled outside the breccia body, and hole 4 was abandoned in overburden.
Ecuadorian has about 17 million shares outstanding and US$4 million in working capital. For its part, Zappa has 13.7 million shares outstanding and $300,000 million in working capital.
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