LATIN AMERICAN SPECIAL — Mining potential of Ecuador tested

Active in Ecuador since 1985, Ag Armeno Mines & Resources (VSE) is one of several companies keen on the country’s mining potential.

Vancouver-based Armeno has interests in a number of projects, including an operating mine.

A subsidiary of Newmont Mining (NYSE) is earning a 60% interest in the Fierro Urco copper-gold property, jointly owned by Armeno and Trans Atlantic Enterprises (VSE).

A large porphyry copper-gold target has been outlined on the Peggy property, under a joint-venture agreement with Curlew Lake Resources (VSE). Armeno’s most advanced project in Ecuador is its operating San Bartolome underground silver-gold-lead-zinc mine.

Although the mine lost money last year, the company believes recent operational improvements will bring it back into the black.

Armeno also owns the 4,800-hectare Chaucha property in southern Ecuador. The property contains a heap-leachable oxide reserve of 54 million tonnes grading 0.46% copper at a stripping ratio of 0.83-to-1. Preliminary estimates put the capital cost of a 33-million-lb.-per-year operation at US$63.6 million. Ecuadorian Minerals (ASE), formally Startigan, has reached an agreement with Yorkton Securities to raise $10.5 million. The funds will be used to fund a prefeasibility study of the Gaby property, as well as to drill the Tres Chorreras property.

Previous sampling at Tres Chorreras returned an average of 0.047 oz. gold, 0.63 oz. silver, 0.45% copper and 0.19% molybdenum.

The company can earn a 35% interest in any oxide gold reserves at Gaby and a half interest in any sulphide gold reserves. Gold mineralization is hosted in a large stockwork system and a limited amount of drilling has returned up to 0.065 oz. gold over 190 ft.

Zappa Resources (VSE) can hold the southern extension of the Gaby zone. Zappa’s concession, held through subsidiary Prominex, hosts a 4,600-ft.-long gold geochemical anomaly and drilling has returned up to 0.044 oz. gold over 105 ft.