NEWS RELEASE
ECUADORIAN MINERALS CORPORATION
October 18, 1999
Trading: TSE.EMC
UPDATE ON VETASPATA GOLD PROPERTY, PERU
Beroen Property, Ecuador
Ecuadorian Minerals Corporation (“EMC”) has signed a Letter Agreement with Rio Tinto Mining and Exploration Ltd (“Rio Tinto”) to amend certain terms of the October 8, 1998 Option Agreement (the “Original Agreement”) between EMC and Rio Tinto for the Beroen gold-silver property in southwestern Ecuador. Under the terms of the Original Agreement, EMC is acquiring a 100% interest in Rio Tinto’s Canoas and Canoas I concessions together with Rio Tinto’s rights in the previously-existing joint venture agreement with EMC (collectively “the Property”).
Under the new Letter Agreement, the cash payment of US$250,000 due to Rio Tinto on October 8, 1999 under the Original Agreement has been deferred and will be payable upon completion of a bankable feasibility study on the Property, at which time an additional US$500,000 cash payment must also be made. In addition, EMC must complete a minimum of US$500,000 in work expenditures on the Property by October 7, 2000. Annual cash option payments (all with an October 8 anniversary date) for the years 2000, 2001 and 2002 remain unchanged at US$350,000, US$800,000 and US$1,000,000 respectively as does the 2% NSR royalty payable to Rio Tinto upon commencement of commercial production from the Property. Under the terms of the Letter Agreement, should EMC withdraw from, or be in default of, any of the terms of the Option Agreement (as amended), then Rio Tinto has the right to have all or part of the Property transferred back to Rio Tinto. If such a right is exercised by Rio Tinto, then EMC will receive a 1% NSR royalty for future commercial production on that part of the Property transferred back to Rio Tinto. A formal amendment, replacing the Letter Agreement, is in preparation and is expected to be signed in the near future.
Following the very encouraging drill results announced in the news release dated September 1, 1999, EMC is planning to undertake an underground adit program consisting of a series of short adits or tunnels (each approximately 25m in length) in the well-mineralized Alejandra and Dorada zones. These adits will be used to compare bulk sample underground gold and silver values with EMC’s recent drilling results and will also generate detailed geological and structural information which will be useful for the planning of a future drill program to be carried out early in the new year. In addition, bulk samples will be collected for metallurgical testwork to supplement Rio Tinto’s previous preliminary work carried out at the CIMM laboratory in Chile on samples taken from the Alejandra and the adjacent Penelope zone at Beroen. Rio Tinto’s metallurgical results were positive and reported average recoveries of 95% gold and 80% silver from simple bottle roll cyanidation tests at a grind size of 60% minus 200 mesh with low cyanide consumption (0.5 g/t sodium cyanide). Column leach tests produced 79% gold recovery from the Alejandra samples and 97% from the Penelope samples, with relatively low cyanide consumptions. EMC also plans to carry out a CSAMT geophysical survey in the Beroen project area prior to the end of the year. This technique is used to detect vertical or near-vertical structures by utilizing resistivity contrasts and was used very successfully at Meridian’s geologically similar El Peńon epithermal gold-silver deposit in Chile in order to define known structures containing gold-silver mineralization and to locate extensions of the mineralization under alluvial cover.
Vetaspata, Peru
At the high grade Vetaspata gold property in southern Peru, geological mapping, sampling and surveying have now been completed and drill sites selected for the upcoming diamond drill program, now scheduled to commence within the next two weeks. The previously announced starting date of late September was postponed because of weather-related logistical delays.
Mapping and sampling has extended the area of the gold-bearing mantos (see news release dated December 2, 1998) in the poorly exposed southwestern part of the area for an additional 400m to the south. Nine initial rock panel samples (typically 2m x 1m in size) from the mantos in this southwestern area reported the following values, all in g/t gold: 23.3, 7.7, 6.6, 2.5, 1.6, 0.03, 0.03, 0.01, and <0.01. This new area will be drill-tested as part of the upcoming drill program.
The overall drill program at Vetaspata will comprise 18-20 angled diamond drill holes, with depths ranging from 50m to 150m. This program will evaluate the continuity of the relatively flat-lying gold-bearing mantos away from the previously sampled underground workings (where uncut rock panel (2m x 1m) sample values averaging 54m at 17.9 g/t gold and 32m at 39.7 g/t gold in two separate adits were obtained) and will also test for additional mantos at depth. The initial area to be drilled on wide-spaced intervals (holes ranging from 75m to 300m apart) covers approximately 750m by 750m in area and forms part of a 60 sq. km property position. Surface cover is extensive and the full extent of the mineralized zone is not known at this time.
Additional information and the actual start date of drilling will be released as they become available.
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: (480) 483-9932 or Fax: (480) 483-9926.