NEWS RELEASE
ECUADORIAN MINERALS CORPORATION
September 17, 1998
Trading: TSE.EMC
BEROEN DEAL WITH RIO TINTO TO CLOSE IN OCTOBER
Ecuadorian Minerals Corporation ("EMC") is pleased to announce that it has completed its purchase of 100% of the interest of Zappa Resources Ltd. (Zappa) in the Guadalupe, Papa Grande and Mollopongo concessions (the "Properties") which are contiguous with EMC's 100%-held Gaby gold porphyry property in southern Ecuador (see previously announced news release dated April 20, 1998). Based on EMC's market price at the date of closing, the transaction is valued at approximately US$1.08 million or US$0.36 per ounce of gold acquired on a resource ounce basis and US$0.68 on a preliminary mineable reserve ounce basis.
Under the terms of the sale and purchase agreement, EMC has agreed to issue a total of 2.5 million common shares of EMC, comprising 500,000 shares released at closing and 500,000 released every six months thereafter over a 2 year period. An additional 500,000 share issuance which was to be based on future higher gold prices and was included in the original Letter Agreement has been deleted by mutual agreement between the two parties based on existing market conditions. Zappa will also receive a Net Smelter Return ("NSR") royalty of up to 2% on commercial production from the Properties. The Properties were previously held 100% by Zappa, except for the Papa Grande concession which was held as to 50%, with Zappa as operator of a joint venture with the underlying Ecuadorian property holder. Zappa also held a first right of refusal to acquire the remaining 50% interest in the Papa Grande concession from the property holder, which right of first refusal was acquired by EMC under the sale and purchase agreement.
The effect of consolidating all of the properties in the Gaby area into a unified project (with an estimated total resource of 5.6 million gold ounces) increases EMC's share of the presently known total gold resource to more than 5.0 million ounces, containing a preliminary mineable gold reserve estimate attributable to EMC of approximately 2.7 million ounces. EMC considers that there is excellent potential for expanding the present reserve base on the combined properties since none of the presently known gold deposits in the overall Gaby area have yet been fully delineated and several additional exploration targets remain to be investigated.
At the Beroen gold/silver property, also in Ecuador, finalization of the Option Agreement with Rio Tinto is scheduled on or before October 9, 1998, following a recent, mutually agreed-upon extension of the Letter of Intent originally signed in June (see news release dated June 10, 1998).
Stephen J. Kay, President and CEO
The Toronto Stock Exchange neither approves nor disapproves the information contained in this News Release.
For additional information, contact Linda North at Tel: (602) 483-9932 or Fax: (602) 483-9926.