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DAILY NEWS Feb 26, 2013 5:25 PM - 0 comments

Long gold intercepts at Condor for Ecuador Gold & Copper

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VANCOUVER – A 10,000-metre drill program at the Condor project in southeast Ecuador is returning long mineralized intercepts for Ecuador Gold & Copper (EGX-V).

The drill program is a first for the junior explorer, which debuted on the Venture exchange in July 2012. The company is completely focused on Condor, an 8,300-hectare land package in the Zamora gold and copper belt directly south of Kinross Gold's (K-T) 13.7-million oz. Fruta del Norte gold project.

The northern half of Condor boasts a handful of low sulphidation targets, where mineralization is hosted in breccia pipes and narrow fault veins. The south is home to classic copper-gold porphyry mineralization, as well as structurally-controlled zones of higher-grade gold.

In its current drill program Ecuador Gold is focused on the southern sector. Specifically, the company's drills have been testing the El Hito and Santa Barbara porphyry targets. Santa Barbara is already home to 21 million inferred tonnes grading 1 gram gold per tonne. A resource has not yet been defined at El Hito.

The latest news came from Santa Barbara, where drill hole 21 intersected the main gold zone approximately 50 metres south of the known mineralized envelope to return 350 metres grading 0.74 gram gold, 0.11% copper, and 1.09 grams silver per tonnes starting 68 metres downhole. The intercept included 206 metres averaging 1.01 grams gold.

In October hole 19 cut an even longer intercept: 420 metres averaging 0.571 gram gold, 0.082% copper, and 1.157 grams silver, starting 180 metres downhole. Another hole collared 100 metres northwest of the mineralized zone, hole 20, failed to return significant results.

The company is now preparing to drill another seven holes at Santa Barbara to extend the resource south and east. Two drill rigs are currently being mobilized to the area.

Ecuador Gold also has drills turning at the El Hito target, a copper-molybdenum porphyry target about 4 km east of Santa Barbara. The company collared its first El Hito drill hole about 200 metres south of four historic holes and immediately hit mineralization: hole 5 returned 703 metres of almost continuous mineralization that averaged 0.31% copper and 1.18 grams silver, starting just 8 metres downhole.

Ecuador Gold cautions that true widths are estimated at 50 to 60% of drilled widths.

The porphyry copper mineralization at El Hito is associated with a Late Jurassic dioritic intrusive complex. Steeply dipping intrusive contacts, quartz veins, and faults striking north-northwest define two major structural orientations and the majority of the diorite complex is moderately to strongly altered. Ecuador Gold notes that Dorato Resources (DRI-V) has had good exploration success on its Condor project, which is just east of El Hito but sits across the border in Peru.

Other targets areas at Ecuador Gold's Condor project include Los Cuyes, Soledad, and Chinapintza, which are all epithermal showings in the northern half of the land package. Most of the project's 50.4 million measured and indicated tonnes come from those three deposits and bear an average grade of 0.94 gram gold and 7.06 grams silver. Two other zones, known as San Jose 1 and Enma, also contribute to the count.

Santa Barbara represents the majority of Condor's inferred resource count, which totals 28.4 million tonnes grading 1.4 grams gold and 3.79 grams silver.

Ecuador Gold kicked off a 10,000-metre drill program at Condor in August. At the end of January the company had completed 7,000 metres of drilling.

To fund the drill effort Ecuador Gol has raised money twice. In November the company raised US$2.5 million in a private placement, selling 11.9 million units at US$0.21 apiece; each unit comprised a share and half a warrant, with warrants exercisable at US$0.35 within 36 months. A single investor, Aura International Services, subscribed for the entire placement.  

In February the company added to its coffers again, raising US$3.5 million by selling 16.7 million units under the same price and terms. Aura bought almost 12 million units in the second raise, bringing its total holdings to 23.8 million shares and 11.9 million warrants.

Ecuador Gold has 109.5 million shares outstanding, which means Aura owns close to 20% of the company.

News of the latest drill results from Santa Barbara had no effect on the company's share price, which remained at 7.5¢. The company listed at 24.5¢, a value that now stands as its 52-week high; it has traded as low as 6¢ since listing.  

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