Ecometals Limited

Ecometals Limited

July 15, 2010 11:34 ET

Ecometals Announces Assay Results Hole RZDDH10-03A and Drilling Update, Rio Zarza Gold Project, Ecuador

TORONTO, ONTARIO--(Marketwire - July 15, 2010) - Ecometals Limited (TSX VENTURE:EC)(BERLIN:GDQ)(FRANKFURT:GDQ) -

Ecometals Limited announces receipt of analytical results from drill hole RZDDH10-03A and preliminary results from RZDDH10-06 on the Rio Zarza gold project in Ecuador. Geological evidence thus far indicates drilling is within the alteration envelope of a mineralized system, but has not yet intersected the high grade core. The Company plans to continue drilling based on the developing geological structural model of the pull-apart basin, using geochemical indicators and alteration as vectors to the centre of the system.

While the analytical results to date have only resulted in sub economic grade gold mineralization, the Company considers that the drilling results thus far are very encouraging, and the main geological results in support of continuation of the programme are:

  • The drill results have proven the existence of a structural pull-apart volcano sedimentary basin which is the primary host for mineralization because of porosity and geochemical reactivity
  • The alteration styles and mineral assemblage is typical of epithermal style mineralization and analogous to Fruta del Norte
  • Results have shown there are clear stratigraphic and structural levels where epithermal vein and disseminated styles of mineralization occur, but the main conduit of hydrothermal fluid flow has yet to be intersected
  • Analytical results and geological observations indicate drilling is within a characteristic alteration halo that potentially envelops a higher grade core
  • Intra-basin faults are the conduit channelling hydrothermal fluid flow, and converge to the north where drilling is now focussed

Highlights of RZDDH10-03A

  • ALS Chemex analytical results from diamond drill hole RZDDH10-03A indicate broadly geochemically anomalous zones with intersections of gold, silver and base metals, of sub-economic grade
  • The Suarez and Misahuallí Fms contacts are again shown to be inter-layered, with alteration and mineralization at the top and bottom of the sequence, indicating economic mineralization may occur at different stratigraphic levels in the structural pull-apart basin
  • Analytical results are sub-economic but geochemically anomalous, with maximum grades of 94ppb gold, 2.2ppm silver, and 0.476% copper within wide alteration and mineralized zones in the Suarez- Misahuallí Fm host rocks
  • Although Hole RZDDH10-03A did not intersect economic grade Au, it has by far the best encounter of massive quartz and zoned quartz veining, alteration, and associated sulphides encountered thus far in the 2010 drilling campaign.
  • Hole RZDDH10-03A is interpreted to be within the alteration halo of a potentially significant mineralized system. The next hole (RZDDH10-07) is sited in the same fence to determine the width of the alteration zone and vector to the possibly high grade core of the system

Summary Geology RZDDH10-03A

  • Drill hole RZDDH10-03A was located at 777528E/9583046N (PSAD56/UTM17S), elevation 1586m, azimuth 315° and inclination -70°
  • The hole intersected Hollín Fm clastic sediments from 0 to 91.1m, followed by Fruta Andesite to 379.8m depth. From 379.8 to 623m is a complex inter-layered sequence of Suarez Fm sediments and Misahuallí volcanics which has been strongly structurally disrupted, altered and mineralized. The hole ended in altered granodiorite of the Zamora Batholith from 623 to 650m total depth
  • Two main alteration and mineralized zones were encountered: at the top of the Suarez-Misahuallí sequence, and again at the basal unconformity with the Zamora Batholith
  • The intersection at the top of the Suarez-Misahuallí is silicified and generally epidote-chlorite-carbonate altered with disseminated and veinlet sulphides. Geochemically anomalous Au up to 94ppb with associated elevated Ag and As
  • The intersection at the base of the Suarez-Misahuallí is a massive silicified and clay altered zone from 580 to 618m with disseminated, replacement and veinlet sulphides (pyrite, marcasite and chalcopyrite), with overprint of later epithermal zoned quartz veins. Au is geochemically anomalous at 49ppb and is associated with elevated Ag, As, Pb and Cu. Copper is elevated throughout the Suarez-Misahuallí sequence, but is strongly anomalous (up to 0.14%)spanning the unconformity and in the Zamora Batholith granodiorite

The results of this hole demonstrate several important new factors controlling mineralization in the volcano-sedimentary basin:

  • The Suarez Fm (sediments) and the Misahuallí Fm (primarily volcanics) are contemporaneous and are inter-layered. Facies changes occur laterally with distance from the volcanic source
  • Mineralization occurs at multiple levels within the Suarez-Misahuallí sequence and is manifested as veins or dissemination depending on the porosity and brittleness of the local host rock
  • The elevation range from 1050 to 1250masl remains a valid concept for control of epithermal mineralization, but different styles of mineralization may also occur (ie. at the floor of the basin)
  • The hydrothermal mineralizing system evolved with the basin formation, with an earlier mesothermal event overprinted by later epithermal fluids

The intersection of different styles of mineralization and at different stratigraphic levels offers more exploration opportunities, both within and outside the volcano-sedimentary basin. The occurrence of Au-Cu mineralization hosted by the Zamora Batholith granodiorite is a concept applicable to the western side of the Rio Zarza tenements where there are significant soil geochemical anomalies which are currently being investigated.

Within the volcano-sedimentary basin, mineralization is preferentially deposited where there is mixing of the hydrothermal fluids with connate basin and meteoric waters. This occurs at the major unconformities at the base of the Suarez-Misahuallí overlying the Zamora Batholith (basal unconformity), and at the top of the Suarez-Misahuallí (surface expression). Inter-formational contrasts in porosity and brittle/ductile character within the Suarez-Misahuallí are also sites for mineral deposition, as at the contact between volcanics and sedimentary rocks.

Although the Au grades in hole RZDDH10-03A are only geochemically anomalous, the geological evidence indicates the hole is within the alteration envelope of a mineralizing system of potentially a higher grade core. The next hole (RZDDH10-07) is sited in section to determine the width of the zone and vector to the central hydrothermal conduit where high grade Au mineralization analogous to Fruta del Norte is thought to occur.

Summary Geology Hole RZDDH10-06

  • Drill hole RZDDH10-06 is located at 777422E/9582835N (PSAD56/UTM17S), elevation 1586masl, azimuth 315° and inclination -70º
  • Intersected 0 to 128m of Hollín Fm sediments, including carbonaceous shales indicative of coal-forming depositional environment
  • From 128 to 262.7m Fruta Andesite, with zoned carbonate-haematite-sulphide veins and hydrothermal brecciation indicative of possible late stage mineralizing event
  • Strong structural disrupted zones from collar to approximately 200m depth required cementation to stabilize the hole and consequently slow drilling progress
  • From 262.7 to 587.3m Suarez Fm mixed sediments including polymictic conglomerate, wacke, sandstone, carbonaceous shale and calcareous mudstone with syngenetic sulphides
  • Large proportion of fine grained siliceous clasts (chert) in the Suarez Fm conglomerate is not known as a stratigraphic horizon in the basin, and may represent silica sinter
  • Interlayered Suarez Fm sediments with Misahuallí Fm porphyritic andesite from 587.4 to 598m
  • From 598 to 651.4m feldspar porphyritic andesite, variously silicified, altered and disseminated sulphides and minor carbonate-quartz veins

This hole has the first indications of a mineralizing system in the Fruta Andesite, which has previously been massive, indurated and relatively fresh. With the evidence of overprinting hydrothermal events intersected in Hole RZDDH10-03A, and this new result, this indicates the mineralizing system was active over a long time period and occurred in several pulses of activity.

The prevalence of fine grained siliceous clasts (chert) in the Suarez Fm conglomerate may be an indicator of silica-rich water from with the sediments were deposited, or perhaps more importantly be remnants of the surface manifestation of hydrothermal venting known as silica sinter.

Geological Factors Controlling Gold Mineralization

The following are believed to be key factors required to generate economic mineralization at Rio Zarza:

  • Misahuallí Fm host rock – acts as brittle host conducive to formation of vein-type mineralization and possible geochemically reactive rock
  • Sub-Suarez Fm unconformity with Misahuallí Fm – zone of mixing of hydrothermal with basin and meteoric waters, and contrast in porosity and rheology
  • Elevation depth range – all indications of mineralization (alteration, sulphides, silicification) intersected thus far, and bulk of FdN mineralization is within the 1050 to 1250masl elevation range, which suggests both main mineralizing event is time-restricted, and occurred at a specific stage in the basin evolution
  • Major structure contemporaneous with basin formation to act as a conduit for hydrothermal mineralizing fluids
  • Strong alteration and massive silicification indicates major mineralizing system, zoned epithermal veins indicates cooling of the hydrothermal mineralizing system into the range conducive to deposition of gold and associated metals

By analogy to Fruta del Norte and results of previous drilling at Rio Zarza, where these factors are coincident is the locus of high grade vein-type epithermal gold mineralization.

Next Drill Hole RZDDH10-07 Location

The next drill hole is located approximately 150m southeast of Hole 03/03A in the same fence, at 777634E/9582945N (PSAD56/UTM17S) elevation 1598m, This hole is planned to intersect the same strong hydrothermal mineralized zones in hole RZDDH10-03A to determine the width of the zone and vector to the central core of the system. The target is a strong IP chargeability anomaly in the Suarez-Misahuallí complex indicative of sulphides in the mineralized alteration halo.

On completion of this hole, the Company will have drilled approximately 4100m in 7 holes to total depth. According to the current drilling contract with TerraNova, the current terms and conditions may be extended to 5000m.

Sample Preparation, Analytical Protocol and Quality Control

Samples were taken from half core split with a diamond saw, and composited over 5m intervals in the Hollin Fm and 2m in the Suarez Fm. Composite samples were crushed to 70% passing 2mm and riffle split 250g subsample for pulverizing to 85% passing 75µm for analysis.

Samples were prepared at the ALS Chemex sample preparation laboratory in Quito, and analysed at the ALS Chemex South American regional laboratory in Lima, Peru. Gold was assayed using the fire assay technique, and multi element analysis using ICP-MS.

Control samples are included in each batch of 100 samples, including 6 Certified Reference Material (CRM), 5 field duplicates prepared from quartered split core, and 4 blanks. CRM and blank material is internationally certified and supplied by Ore Research and Exploration (Pty) Limited (OREAS) in Australia.

Quality control results indicate there is no apparent analytical bias or systematic contamination of samples, and analyses are accurate compared to CRM stated performance criteria.

Qualified Person

SR McMullan, P.Geo, Vice President of Exploration for Ecometals Limited, is a qualified person according to National Instrument 43-101 definition and has prepared the technical information included in this press release. Drilling, logging, sampling and dispatch were under the direct supervision of the Qualified Person.

About Ecometals

Ecometals Limited is a Canadian TSX Venture Exchange listed mineral exploration and development company focused on mineral resources in Latin America. Apart from its gold exploration projects in Ecuador, Ecometals also has significant manganese, iron and gold projects in Brazil at grass roots and development planning stages.

Chief Executive Officer, Fran Scola, said "Although the analytical results for the gold thus far are sub-economic, the geological evidence indicates we are within the alteration envelope of a mineralized system with analogies to Fruta del Norte. Vectoring to the high grade core of mineralization at depths exceeding 500m is the challenge faced by our geological team, but we remain optimistic of discovery and will continue drilling."

Safe Harbor Statement: Statements contained in this release that are not historical facts are forward-looking statements which involve risk and uncertainties, which could cause actual results to differ materially from those expressed in forward-looking statements.

These include risks relating to changes in economic or environmental conditions and the company's ability to execute its business model and strategic plans. The company relies on litigation protection for forward-looking statements.

"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."

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