Ecometals Limited
TSX VENTURE : EC
BERLIN : GDQ
FRANKFURT : GDQ

Ecometals Limited

September 19, 2011 14:11 ET

Ecometals Announces Exploration Update at Its Rio Zarza Gold Project in Ecuador

Extension of Due Diligence Period Re Planned Disposal of Brazilian Serra Do Navio Manganese Project, and Loan Update

TORONTO, ONTARIO--(Marketwire - Sept. 19, 2011) - Ecometals Limited (TSX ENTUREV:EC)(BERLIN:GDQ)(FRANKFURT:GDQ) -

  1. RIO ZARZA

Ecometals Limited is pleased to announce results of exploration activities in on the Rio Zarza Gold Project in southern Ecuador.

Highlights

  • Results of first three shallow holes explained geophysical anomalies but without anomalous levels of Au
  • Strong visual evidence of epithermal mineralization encountered in diamond drill hole RZDDH11-04, including banded quartz veins, vuggy quartz, pervasive silicification, bladed calcite boiling texture, clay alteration and sulphidestypical of epithermal style mineralization
  • Analytical results of Hole RZDDH11-04 indicate geochemically anomalous Au with significant intervals of Ag and Cu
  • Start of detailed gravity survey over the Misahuallí-Suarez volcano-sedimentary basin to determine deep basin structure
  • Discovery of sulphides and Au from outcrop of Suarez Fm conglomerate along the Rio Blanco
  • Drilling now focussed on targets in the deep part of the Misahuallí-Suarez basin

Shallow Drilling Results
Diamond drill holes RZDDH11-01 to 03 were targeted primarily on IP Chargeability and soil geochemical anomalies in the Zamora Batholith granodiorite, which was thought to be caused by sulphides associated with epithermal veins which are the partial source of abundant alluvial gold locally derived within the property.

In all three holes the IP Chargeability anomalies were explained as disseminated sulphides, low resistivity as faulting, and high resistivity as silicification, which is proof of concept of the geophysical interpretation. None of the holes returned significant Au assay results, but hole RZDDH11-03 is anomalous in Cu up to 400ppm over an interval from 30 to 50m depth, probably representing supergene enrichment.

Based on unsatisfactory results in Au analyses, and pending commissioning of the MD-2 portable drill, the drilling of shallow anomalies was suspended in favour of drilling deep holes in the Misahuallí-Suarez Basin.

RZDDH11-04 Misahuallí-Suarez Basin
Hole RZDDH11-04 on the FdN Offset Target in the Misahuallí-Suarez Basin began drilling 22 June to an initial planned depth of 500m. The hole was located at UTM 777373E/9583796N (PSAD56/UTM17S) elevation 1400m azimuth 145° true inclination -70° to a planned depth of 500m.

Hole RZDDH11-04 was targeted on a deep-seated vertical tabular high resistivity thought to represent silicification and possibly quartz veining. Two major fault structures are interpreted, which may have displaced the northern extension of the Fruta del Norte orebody into the Rio Zarza property. A soil geochemistry anomaly of antimony and arsenic, indicative elements of Fruta del Norte, is present at surface over the resistivity target.

The hole encountered primarily granodiorite of the Zamora Batholith, with intersections of Fruta Andesite and Suarez Fm sediments, which indicates this is on the margin of the Misahuallí-Suarez basin. There was strong visual evidence of epithermal processes, including brittle tectonic and hydrothermal brecciation, pervasive silicification and propyllitic alteration (chlorite/epidote/haematite), banded and vuggy quartz veins, carbonate (calcite, dolomite, rhodochrosite) veins with bladed calcite boiling textures, with veinlet and disseminated sulphides. This is perhaps the clearest evidence thus far from drilling that the mineralizing processes were active in the Rio Zarza project.

Analytical results unfortunately only show geochemical anomalous levels of Au (up to 0.467g/t over 2m) but significant intersections of Ag (32.9g/t over 21m including 100g/t over 4m), and base metals, particularly Cu (multiple intersections including 0.0627%/12m from 7.5m, 0.0352%/20m from 182.5m, 0.0208%/44.5m from 228.5m, 0.0267%/20.3m from 392.7m and 0.0323%/32.27m from 547.45m). Ag is partly supergene enrichment, but deeper base metal (Cu, Zn, Pb) intersections are related to intensity of alteration and veining. Although the Cu intercepts are not of economic importance, they are strongly geochemically anomalous compared to previous drilling and indicative of an active mineralizing process.

The alteration assemblage, mineral textures and base metals enrichment in this hole are indicative of a thermal regime which is higher temperature than what is typical of the Au depositional environment, which would suggest that the immediate vicinity is unsuitable due to the thermal and mechanical characteristics of the host rock (primarily granodiorite) and proximity to the heat source. This supports the conceptual model that a substantial thickness of the volcanics and sediments are necessary, thus drilling towards the centre of the basin is warranted.

Drilling in the Misahuallí-Suarez basin has moved to the south side of the project, deeper in the Misahuallí-Suarez basin. Hole RZDDH11-05 on the Rio Blanco target is complete to 728m depth, with hole RZDDH11-06 on the South Basin target in progress. Drilling to 10 September comprised 2508.15m in 6 holes.

Detailed Gravity Survey
Initial Exploration Services Internationalwere engaged to conduct detailed gravity surveys over the Misahuallí-Suarez basin to map the complex basin structure and identify deep-seated faults. The survey utilized two state of the art Scintrex CG-5 automated gravity meters with laser total station survey elevation control for high precision. Preliminary results are being used for conceptual drill hole targeting, with final processing including terrain corrections in progress.

Mineralised Outcrop Discovery
Geological mapping project along the Rio Blanco has discovered an outcrop located at 777146E/9582710N revealed by low river water level. The outcrop comprised silicified sulphide-rich and Au mineralized Suarez Fm polymictic conglomerate with agglomerate matrix. Mapped structures are oriented 350°azimuth 85°E dip, with subsidiary structural elements NE-SW and WNW–ESE.

The significance of this discovery is pervasive silicification, sulphides and Au mineralization hosted in the Suarez Fm outcrop, and in a N-S oriented structure which is parallel to the main structural control at Fruta del Norte.

Exploration Programme Going Forward
Based on compilation of previous data and insights provided by Dr Simmons, the planned exploration programme for 2011 will include:

  • Main focus on drilling targets deeper intothe Misahuallí-Suarez basin
  • Thin section petrography and X-Ray Diffraction (XRD) for alteration mineral identification and paragenesis (with Dr Stuart Simmons)
  • Commissioning of the MD-2 shallow drill and mobilization of second deep-capacity (1200m) diamond drill

Sampling and Analytical Protocol
Core is transported from the drill site to the Rio Zarza camp, where RQD, geological logging and sampling for geochemical analysis is conducted. Samples are composited over 2m intervals from diamond saw cut half core.

Samples are despatched using full chain of custody documentation to the ALS Chemex sample preparation laboratory in Quito and analysed at the ALS Chemex laboratory in Lima, Peru. ALS Chemex is an ISO certified laboratory.

Control protocols include industry-standard insertion of control samples (blanks, internationally Certified Reference Material, and field duplicates) at 10% frequency.

  1. UPDATE ON CENTURY LOANS

As disclosed in the Company's financial statements for the financial year ended March 31,2011, the Company loaned an aggregate of $400,000 to Century Mining Corporation ("Century") pursuant to two short term loans of $200,000 drawn down on each of June 26, 2011 and July 27, 2011. The loans were made on commercial terms at a rate of interest of 10% per annum and arrangement fees due to the Company by the borrower of $4000 in respect of each loan. Pursuant to the original terms of the loans, such loans were repayable within four weeks of each drawdown. The terms of these loans have been revised and the loans are being repaid in instalments to be fully repaid by November 30, 2011. To date, $100,000 of principal has been repaid by Century. Century is a public company listed on the TSXV with common directors.

  1. SERRA DO NAVIO MANGANESE PROJECT

Further to previous announcements made by the Company concerning its agreement to sell its indirect interest in the Serra do Navio manganese project in the northern Brazil state of Amapá (the "Manganese Project") to Asia Minerals Limited ("Asia Minerals") (see Press Releases dated April 4, 2011 and April 18, 2011) for up to $17m, of which a deposit of $2m was paid on entering into the agreement, the Company wishes to announce the extension until October 17, 2011 of Asia Minerals' exclusivity and due diligence period to allow Asia Minerals to continue its confirmatory due diligence on Serra do Navio Limited ("SdN") and Ecometals Managanês do Amapá Ltda ("EMAL"), the Company's indirect subsidiaries that own the interest in the Manganese Project. If Asia Minerals issues its written confirmation that its due diligence is satisfactory to it (in its sole discretion) at the end of the extended due diligence period, closing would be expected to be completed in late October, 2011.

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 is under the direct supervision of the Qualified Person and follows industry standard QA/QC protocols.

About Ecometals

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

Chief Executive Officer William Lamarque said concerning the Rio Zarza project: "Advancement of the geological conceptual model indicates the deepest part of the volcano-sedimentary basin holds the most promise for gold mineralization, so we are concentrating efforts in this area. We hope to mobilize the deep-capacity drill within the next month, which has been delayed at the manufacturer, and in the meantime we continue to test intermedicate depth targets to approximately 800m with the existing capacity."

This news release contains forward-looking information which is not comprised of historical facts. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. With respect to the proposed sale of the Manganese Project to Asia Minerals, the Company's anticipated closing of the share purchase agreement constitutes forward looking information. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, the failure to close the share purchase agreement providing for the sale of the Manganese Project to Asia Minerals by reason of Asia Minerals not being satisfied, in its sole discretion, with its due diligence on SdN and EMAL, as well as those risks set out in the Company's public documents filed on SEDAR. The Company has assumed that Asia Minerals has the financial capability to pay the aggregate purchase price under the Agreement. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.

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