Avalanche Minerals Ltd.

October 02, 2007 17:20 ET

Avalanche Acquires Mining Concessions in Ecuador

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 2, 2007) - Avalanche Minerals Ltd. (TSX VENTURE:AVH) announces that its wholly owned Ecuadorian subsidiary, Avalanche Resources S.A. ("Avalanche S.A.") has entered into a mining option agreement (the "Option Agreement") dated as of September 25, 2007 with an arms length party, Ing. Holguer Parra of Luis Cordero #1013 y Gran Colombia, Cuenca, Ecuador (the "Optionor") pursuant to which Avalanche S.A. has been granted an option to acquire 3 non contiguous mining concessions known as the "Gigantones Property" totaling 1174 hectares located in the western part of Azuay Province, Republic of Ecuador.

The Gigantones Property includes the Virgen de la Nube (1 ha), Concepecion (508 ha) and Virgen de la Nube 1 (665 ha) mining concessions. The isolated Virgen de la Nube concession is strategically located adjacent to the Tres-Chorreras polymetallic (Cu-Mo-Au-Ag) deposit and may capture a portion of the down dip extension of the deposit. The Concepecion and Virgen de la Nube 1 concessions are contiguous and may straddle potential extensions of the mineralization along strike.

The Gigantones Property lies at the southern extremity of the Inter-Andean Graben in an emerging mineral-rich belt which also hosts the Tres-Chorreras (Cu-Mo-Au-Ag) deposit, Quimsacocha, high sulphidation epithermal Au-Cu-Ag deposit (indicated resources of 22,531,000 tonnes grading 4.0 g/t Au, 2.8 g/t Ag and 0.16% Cu, and inferred resources of 2,519,000 tonnes grading 2.1 g/t Au, 2.0 g/t Ag and 0.12% Cu), the Rio Blanco low sulphidation Au-Ag deposit (proven reserves of 154,000 tonnes grading 11.2 g/t Au and 96 g/t Ag and probable reserves of 1,837,000 tonnes grading 7.9 g/t Au and 60 g/t Ag) and the Gaby porphyry Au-Cu-Mo deposit. None of these deposits have achieved commercial production to date.

The Gigantones Property is located on the western flank of the Miocene to Oligocene Jubones Caldera adjacent to the Tres-Chorreras (Cu-Mo-Au-Ag) deposit. The mineralization at Tres-Chorreras consists of chalcopyrite, molybdenite, pyrite, gold and silver and is spatially associated with the contacts between a diatreme breccia and several diorite bodies. In places, the mineralization has been traced by drilling from surface for 300 m down the dip and for 250 m along strike. The mineralized zone is up to 50 m thick locally and remains open along strike in both directions and down dip. The principle structure trends 030 degrees, dips towards the southeast and is the locus of the polymetallic (Cu-Mo-Au-Ag) mineralization in the Tres-Chorreras deposit. No 43-101 compliant mineral resource estimates have been completed for the Tres-Chorreras project to date.

The Cu-Mo-Au-Ag mineralization at Tres-Chorreras was discovered in 1985 and local miners began surface prospecting, underground exploration and mining for gold in 1987. To date over 5,000 m of tunneling has completed. Between 1994 and 1995, the mining co-operative entered into an agreement with Ecuadorian Minerals Corp. who drilled 15 holes totaling 1945 m, most of which intersected significant widths of Cu-Mo-Au-Ag mineralization. One of these drill holes (TCD-12) was collared on Avalanche's Virgen de la Nube concession, drilled at -60 degrees on a 330 degree azimuth and intersected 98.30 m of mineralization grading 0.32% Cu, 0.15% Mo, 0.41 g/t Au and 8.68 g/t Ag straddling the concession boundary on ground adjacent to Avalanche's Virgen de la Nube concession. At the deposit scale, the mineralized zone and related structures trend roughly 030 degrees and dip between 70 degrees SE and vertical. Projected down dip, the mineralization is interpreted to cross Avalanche's Virgen de la Nube concession.

In early 2007, Atlas Minerals Inc. completed an extensive program of tunnel mapping and sampling, acquired the Tres-Chorreras and Narihuina-1 mining concessions and prepared a 43-101 compliant technical report on the project recommending a $8,666,120 (USD) exploration program. This work documented the occurrence of 3 stoping areas of high grade massive sulphide bodies being exploited by the mining co-operative. The 3C-C stoping area occurs on the northwestern side of the Virgen de la Nube concession. In this area, on ground adjacent to Avalanche's Virgen de la Nube concession, 415 chip samples taken from existing tunnels and stopes averaged 1.43% Cu, 0.24% Mo, 2.1 g/t Au and 60.6 g/t Ag. Of these samples, 112 yielded values greater than 1% Cu, 117 greater than 0.25% Mo, 96 greater than 3 g/t Au and 90 greater than 50 g/t Ag. The existence of these smaller higher grade massive sulphide bodies was not reflected in the 1995 drilling data and, although there are no tunnels known to occur on the Avalanche's Virgen de la Nube concession, the mineralization has been traced to within 10 m of the concession boundary. In addition, given the orientation of the Tres-Chorreras deposit and related structures it is possible that the mineralization may extend along strike onto the Concepecion concession and towards the northeast and the Virgen de la Nube 1 concession towards the southwest.

Commenting on the acquisition, Sandy MacDougall stated, "We believe that the Cu-Mo-Au-Ag target on the Virgen de la Nube concession is attractive and should be drilled. There is a potential for discovery of strike extensions of the Tres-Chorreras polymetallic deposit on the Concepecion and the Virgen de la Nube 1 concessions. Over the coming months the company intends to complete a program of due diligence, initiate an environmental audit and develop an exploration plan and budget estimates for the "Gigantones" Project. We are extremely pleased to announce the addition of this asset to our core group of properties in Ecuador."

In consideration of the option, Avalanche S.A. will pay the Optionor an aggregate of US $1,500,000 as follows:

- US$100,000 upon signing of an option agreement (completed);

- US$150,000 on or before March 25, 2008 upon completion of the Optionee's due diligence investigation of the Property;

- US$175,000 on or before June 25, 2008;

- US$200,000 on or before September 25, 2008;

- US$250,000 on or before December 25, 2008;

- US$300,000 on or before March 25, 2009; and,

- US$325,000 on or before June 25, 2009.

Avalanche will issue to the Optionor an aggregate of 1,700,000 shares of Avalanche as follows:

- 283,334 shares on March 25, 2008;

- 283,334 shares on June 25, 2008;

- 283,334 shares on September 25, 2008;

- 283,334 shares on December 25, 2008;

- 283,334 shares on March 25, 2009; and,

- 283,330 shares on June 25, 2009.

The Qualified Person responsible for the technical content of this press release is David Melling M.Sc. P.Geo. He has reviewed the contents for accuracy.

This news release contains certain statements that may be deemed "forward-looking statements". Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although Avalanche believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of Avalanche's management on the date the statements are made. Avalanche undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change. The mineral deposit types and metal quantities quoted for Quimsacocha, Rio Blanco and Tres-Chorreras deposits are based on 43-101 technical reports in the public record and are not necessarily what may be, or is being, recovered. The information with regards to the nature of the mineralization is not necessarily indicative of mineralization which may occur on the 3 new mining concessions acquired by Avalanche which is the subject of this news release.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Avalanche Minerals Ltd.
    Sandy MacDougall
    President & CEO
    (604) 662-8186 or Cell (778) 999-2159
    (604) 662-8170 (FAX)
    Avalanche Minerals Ltd.
    Scott LeSage
    Vice President of Corporate Development
    (604) 662-8186 or Cell (604) 828-5990
    (604) 662-8170 (FAX)