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Gold/Mining/Energy : ECOMETALS

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From: Proud Deplorable1/6/2010 11:22:19 AM
1 Recommendation   of 245
 
Ecometals Limited is a Toronto Venture Exchange-listed mineral exploration company with a primary focus on South America. The company’s current exploration portfolio includes iron ore and manganese prospects in Brazil and gold projects in Ecuador.

The management team has significantly advanced the existing projects and the company is on the verge of changing from a resource exploration venture to a development company generating cash flow. The company's projects have significant upside potential and management is committed to fully realizing this potential.

In addition to its exploration prospects in South America, Ecometals also holds a 44.4% investment in Atomaer Holdings Pty Ltd., a private Australian mineral process technology company.

Ecometals trades on the TSX Venture Exchange with the symbol EC. It is also listed on the Frankfurt and Berlin exchanges under the symbol GDQ.

The Serra do Navio project is operated by Ecometals through a joint venture Brazilian company Ecometals Manganês do Amapá Ltda. (“EMB”).EMB is a joint venture between Ecometals (66%) and Alto Tocantins Minercao Ltd (ATML) (34%).

Pursuant to the joint venture agreement in exchange for the transfer by ATML of the manganese properties and assets to EMB, Ecometals agreed to fund all costs until commercial production is achieved. Ecometals has a4.5 year option to purchase an additional 14% interest from ATML in the manganese assets for US$6 million, and a second 7.5 year option to purchase an additional 10% interest for US$15 million.

The Serra do Navio mine was historically one of the largest manganese deposits in the world and operated continuously from 1963 to 1997 by ICOMI and Bethlehem Steel. The mine produced in excess of 30 million tons of high grade manganese ore during its life. The manganese was mined from 18 open pits located along a 9km north-northwest trend. The manganese comprises two types of ore, an upper zone of enriched oxide ore grading 36% to 52% Mn, which is underlain by lower grade manganese rich carbonate protore that ranges in grade from 28% to 42%.

An independent resource completed by Roberto Costa Engenharia Ltda in1997 estimated 4.4 Mt (non 43-101 compliant) of primarily carbonate manganese ore averaging approximately 32% Mn remains in the various orebodies previously mined by open pit. In addition to the carbonate manganese ore, there is a manganese oxide stockpile at the mine site estimated to contain over 3 million tonnes of ore. The stockpile is located within 5 km of a rail head and loading facilities.

At Porto Santana, the Company owns approximately 60,000 tonnes of manganese ore readily available for sale.

The company strategy for the Serra do Navio license area is to commercially upgrade the manganese stockpile at the mine site through a jigging or dense media separation. The upgraded ore material would then be transported by rail or road to Santana for shipment and sale. The company is currently reviewing the technical options to achieve this in the most efficient way, but expects to have commercial development completed during the second half of 2009.

In addition Ecometals is planning to undertake an exploration program on the Serra do Navio license area to identify whether there are additional areas of previous undiscovered manganese oxide ore within the license area.

The company’s key iron ore prospect is its Matapi project. The prospect covers licenses held and operated by Ecometals through two companies.The west limb of the prospect is on licenses 100% held by Ecometals Mineracao do Brazil Limitada (“EMBL”) - the Greiphil licenses.

The east limb of the prospect is held through a joint venture company -Ecometals Ferro do Amapá Ltda. (“EIOB”), in partnership with Alto Tocantins Minercao Ltd (ATML). The issued share capital of EIOB is 60%held by the Company and 40% by ATML.

Additional terms of the EIOB joint venture provide Ecometals with a five-year option to purchase an additional 20% interest from ATML in the iron assets for US$8 million, and a second seven-year option to purchase an additional 10% interest for US$15 million. The Company has agreed to pay ATML a production royalty of US
.25 per tonne of iron ore for the duration of production.

The regional geology places the Matapi mineralization in the Vila NovaGroup, which comprises metamorphosed mafic and ultramafics,metarhyolite, BIF, metachert, quartzite and pelitic mica schists.Metamorphic grade is upper amphibolite facies. The magnetite exhibits coarse recrystallization effects due to regional metamorphism. Detailed aeromagnetics indicates several prominent trends: original stratigraphyof the iron formation, structural displacement and folding of the stratigraphy, and mafic dyke intrusions.

In 2008 Ecometals contracted Fugro Airborne Surveys to undertake alarge magnetic and radiometric airborne survey over the Company’s concessions in the State of Amapa. In total, 28,100 line km were flown.At Matapi, the magnetics defined a formational anomaly from BIF (bandiron formation) which can be traced discontinuously for 22km forming afolded pattern. This is far more extensive than previously indicated by the mapping. The interpretation also led to the discovery of the northwest Matapi prospect, where massive magnetite and haematite mineralization has been identified in a series of discontinuous outcrops for a distance of over six km. This represents the best exposure of iron mineralization in the Matapi concession area. Field inspections indicate the presence of extensive areas covered by mixed magnetite and haematite bearing laterite with iron grades in excess of40%. The magnetic response observed at Matapi displays a large flat lying colluvial material that overlies a high intensity but narrower response from the BIF.

The next stage for this project will involve a drilling program in order for Ecometals to improve understanding of the resource potential of the iron anomaly, and dependent on the scale and grade of such iron ore mineralisation the company will consider the options available to achieve the profitable development of any such iron ore that may be outlined. Such options will include the type of value added product the project may produce, and the logistic issues associated with delivering any saleable product to its end markets.

The Condor Gold comprises four mineral tenements in southeastern Ecuador, and is a joint venture with a company owned by Holding DINE SA(“DINE”) which is in turn controlled by a military affiliated office ofthe state of Ecuador. The mineral tenements cover an area of 7,124 ha.

Under the terms of the JV Agreement the Company is required to fund the10% interest retained by its partner. The Company has a right of first refusal on the 10% interest. A 4% net smelter return royalty is payable on future gold production.

Condor Gold is an advanced exploration gold project located in the Pachicutza Mining District, about 20km east of Zamora and 20km east ofLoja. Mineralization occurs in four different styles within the Complex:

* fault-controlled Au+basemetal vein sets in the basement porphyry (e.g Chinapintza, El Tambo);
* breccia fill, veinlet networks and replacement bodies in the margin of the diatreme complex (e.g. Enma), or the rhyolite plugs (e.g. SanJose);
* replacement and veinlet mineralization dispersed through tuffaceous rocks adjacent to the hydrothermal breccias in from the diatreme margin(e.g. Los Cuyes);
* veinlet networks with minor replacement in the rhyolite porphyry bodies (e.g. Soledad, Guaya).

Gold mineralization is associated with sphalerite in a zoned sequence of sulphide minerals that reflects a primary temperature-depth relationship typical of epithermal systems. The Soledad, San Jose,Bonanza and Guaya occurrences (collectively known as Soledad intrusive)are related to an intrusive rhyolite plug separate from the main Condor complex. Mineralization at Soledad and Guaya occurs as veinlet fill and replacement within the rhyolite, and mineralization at San Jose I, SanJose II and Bonanza is associated with the marginal intrusive-hydrothermal breccia.

More than 60,000 metres of diamond drilling has been undertaken at the Condor Gold Project, and in addition an 1160-metre adit was mined and sampled.

The Rio Zarza project is located in the Zamora-Chinchipe province,about 80km east northeast of Loja, one of the largest cities in southern Ecuador. The license area is adjacent to the Kinross GoldCorp. Fruta del Norte (FDN) discovery.

The major lithological units in the area are the Hollín Formation(Cretaceous sandstones), the Zamora Batholith (granodiorites), the Fruta Andesite, the Suarez Formation (cretaceous conglomerates-alluvialfan deposits) and the Misahuallí Formation (andesitic and basalticJurassic Formation). Potentially a high grade, intermediate sulphidation epithermal gold-silver system, hosted in andesitic volcanic may be found within the eastern boundary of the Zarza Concession.

The FDN discovery (previously owned by Aurelian) is reported to have aNI 43-101 compliant initial Inferred Mineral Resource, released in October 2007, consisting of 58.9 million tonnes grading 7.23 g/t gold and 11.8 g/t silver for 13.7 million ounces of contained gold and 22.4million ounces of contained silver. This discovery is located approximately 600 metres east of the concession boundary of Rio Zarza.

Ecometals’ next steps on the Rio Zarza project is to commence a drilling program to assess the hypothesis that Rio Zarza has similar geological structure to that found at the adjacent FDN property.

Santa Barbara is a gold porphyry copper deposit located 4km SW of Ecometals’ Condor gold project. The area is underlain by and esite volcanics covered by a sedimentary sequence consisting of conglomerate and quartz sandstone.

In the northwest sector of the area, the coarse-grained pre-mineralgranodiorite Zamora Batholith occurs. The andesite is intruded by two distinct types of diorite porphyries. The first one is the ‘main-stage’intrusion which caused the Cu – Au mineralization. The second is a‘late-stage’ intrusion which is hornblende rich, weakly altered, less mineralized and rich in carbonate veinlets and fracture filling. The second type of diorite porphyry can be readily distinguished from the first type by its more crowded texture.

The copper and gold mineralization occurs mainly in the ‘main-stage’diorite porphyry and volcanic rocks. The mineralization is directly related to a stockwork of quartz – chalcopyrite – pyrite veinlets and dissemination developed in the porphyry and volcanics. Previously TVX Normandy drilled 17 holes in Santa Barbara totalling 4,296 metres in1999 to 2000. In 2008, Ecometals a drilled 600-metre hole. Significant intersections are summarized below. Based on the drill results TVX reported an inferred resource of 21 MT at 1 ppm Au at the southwestern part of the deposit alone.

An independent report by Easdon and Oviedo (filed as a NI43-101 report)has confirmed the resource at 21MT @ 1ppm Au plus 5MT @ 0.9ppm Au for a total inferred resource of 821,000 oz.

Santa Barbara project requires further surface mapping, followed by a strike exploration drilling program in order for the company to better understand the structure and seek to expand the scale of the known mineralised zone and this is how the company will focus the next stage of its exploration.

El Hito is located 3km to the east of Santa Barbara. Porphyry style copper- molybdenum mineralisation hosted in a fine-grained granodiorite porphyry that intrudes the Zamora Batholith.

Previously TVX Normandy drilled four wide-spaced holes totaling 118.3metres covering a 500 metre x 300 metre area. The mineralization is still open to all sides, but exploration is somewhat restricted in the east by the international boundary with Peru. Rock and soil geochemical anomalisms and geological mapping suggest a mineralized area of 1,000metres x 600 metres.

Rock and soil geochemical anomalisms as well as the geology indicate that El Hito may be an extensive porphyry copper and molybdenum mineralizing system. Previous reconnaissance drilling yielded wide intersections of mineralization in potassic and phyllic altered granodiorite porphyry. Detailed mapping of the deposit will aid in understanding the controls of mineralization and discovery of higher grade zones within the system. Geological mapping will extend and delineate the limits of the system as well as potentially find other types of mineralization given the proximity of El Hito to Condor gold deposit.

The El Hito project is an early stage project. The initial focus will be on surface mapping and geochemical work, and the results will determine whether exploration drilling is warranted.
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