Rio Tinto drills gold prospect

Rio Tinto (RTP-n) is engaged in a drilling program at its wholly owned Canoas concession in south-central Ecuador.

The activity is focused on the northwestern part of the concession. To date, about 40 holes have been drilled, and additional work is expected to begin on the adjacent San Luis concession in the autumn. San Luis is part of the Beroen property, which is held jointly between Rio Tinto and Ecuadorian Minerals (EMC-T).

The 2.7-sq.-km San Luis concession is also adjacent to ground held jointly by Ecuadorian Minerals and Newmont Gold (NGC-N).

To date, Ecuadorian has located several geochemical anomalies on both the San Luis concession and on the property it holds with Newmont. Surface samples have returned values of up to 1.35 grams gold and 9 grams silver per tonne.

At first glance, the mineralization at both the San Luis and Canoas concessions appears to be that of a classic gold-silver epithermal system.

Rio Tinto has the right to earn interests varying from 50% to 80% in four of the 11 concessions comprising the Beroen property. The company is required to make cash payments totalling US$1 million over five years, spend US$10 million on work commitments and produce a feasibility study within seven years.

Newmont can acquire an 80% interest in the four remaining concessions not covered in the Rio Tinto agreement. These four concessions comprise 98 sq. km.

To earn an initial 60% interest, Newmont must make cash payments totalling US$1.8 million and spend US$1 million over six years. The interest can be increased to 80% by completing a feasibility study within seven years.