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

Ecometals Limited

February 22, 2011 09:00 ET

Ecometals Announces Gold Exploration Update for Ecuador and Brazil

TORONTO, ONTARIO--(Marketwire - Feb. 22, 2011) - Ecometals Limited (TSX VENTURE:EC)(BERLIN:GDQ)(FRANKFURT:GDQ)

Key Points

Ecuador

  • Hand trenching of IP Chargeability at Rio Zarza resulted in gold in soil attributed to underlying mineralized quartz-chlorite-sulphide veins
  • Gold grain morphology and chemistry research study demonstrates alluvial gold in Rio Zarza is locally derived within the project area
  • Alteration facies and paragenesis studies indicate widespread magmatic-hydrothermal alteration attributed to causative porphyry intrusion, overprinted by advanced argillic phase channelled along structural conduit
  • Planned shallow diamond drilling where thick cover precludes further surface trenching – the Company's own MD-2 portable diamond drill is close to completion of commissioning and mobilisation
  • Drilling campaign at Rio Zarza is planned in deeper part of Misahuallí-Suarez structural basin where thicker volcano-sedimentary pile dampens the hydrothermal system and cools to epithermal temperature more conducive to high grade mineralization

Brazil

  • Portfolio of gold exploration tenements expanded to 57,124ha approved and granted priority rights, and 14,520ha new applications pending regulatory approval
  • Identified laterite-type haematite-martite iron mineralization Pedra Branca licenses, which is same Au-bearing host rocks as Beadell Resources Amapari Gold Mine and forms iron deposit at Anglo Amapá Iron Mine

RIO ZARZA GOLD PROJECT, ECUADOR

Trenching Programme

Hand trenching of soil geochemical and IP anomalies indicates probable source of Au is related to sulphide rich quartz-chlorite veins and disseminations hosted in Zamora Batholith granodiorite. The alteration has characteristics of a porphyry type hydrothermal system, which could be related to the epithermal mineralization in the Misahuallí-Suarez structural basin.

Alluvial Gold Research Study

Three microscopic and chemical aspects of gold grains were studied: surface texture, shape and alloy chemistry, to determine the source of alluvial gold in the Rio Zarza. Alluvial gold has been historically mined reportedly since Spanish colonial times and continues on a small scale to date.

Summary of observations from the gold grain study:

  • Scanning Electron Microscope (SEM) examination of surface textures indicates gold grains have retained primary crystal shapes and mineral imprints. There is no noticeable increase in rounding or flattening, delicate filigree and wire is preserved, and there is a lack of folded rims. Alluvial gold grains would best be described as pristine (i.e. not transported long distance from source). Grains collected farther downstream begin to show surface pitting caused by chemical weathering.
  • All placer gold grains are larger than 150 um (long axis), which is coarser than what is known as 'float' gold derived from a distant source. The average volume of placer gold grains from the Rio Zarza is 0.043 mm3, almost 2X larger than vein gold with an average volume of 0.022 mm3, which may be caused by amalgamation of gold grains, or sorting by washing of the finer fraction downstream.
  • There is no clear trajectory of increased flattening of gold grains as would be expected with increasing transportation from the source. Both placer and vein gold fall in the same range of axial measurements, with grain shapes mid-equilateral/flattened.
  • Electron Microprobe analysis of Au, Ag, Cu, Ag, Bi, Hg and Te indicates no significant compositional zonation from core to rim of gold grains. The proportion of Au+Ag ("Fineness") ranges from 550 to 950 with an average of 800, with Au:Ag ratio between 5:1 to 7:1. The proportion of Au, Ag and Cu discriminates the source is an Au-rich porphyry

The main conclusion from this study is that alluvial gold in the Rio Zarza and Rio Blanco are locally derived, at least partly from Au mineralized quartz-chlorite-sulphide magmatic-hydrothermal related veins within the tenement, which is upstream from the Fruta del Norte and Bonza las Peñas deposits and indicates a unique source.

Hydrothermal Alteration Research Study

The characterization of alteration assemblages and phases is an important factor in determining the type of mineralizing system and as a vector to mineralization. Optical microscopy, major and trace element analysis and X Ray Diffraction (XRD) studies were used to develop a conceptual model and mineral paragenesis of the Misahuallí-Suarez basin on the Rio Zarza project.

The results of this alteration study imply that the drilling in the northeast part of the Misahuallí-Suarez basin is too close to the causative porphyritic intrusion, and exploration should be directed laterally distant or in deeper parts of the basin where the volcano-sedimentary fill acts as a thermal blanket cooling the hydrothermal fluids to form epithermal style mineralization. Also important are major deep seated basin structures which act as conduits to channel hydrothermal fluids.

Shallow Drilling

Commissioning of the MD-2 man-portable diamond drill is planned as a geochemical sampling technique to obtain bedrock samples where surface cover and depth of weathering precludes trenching. Targets are selected on soil geochemical and IP Chargeability anomalies, and Au-rich quartz-chlorite-sulphide veins exposed in outcrop by artisanal mining. Procurement of drilling equipment, safety and operational training is close to completion ready for imminent mobilisation.

Ecuador Gold Exploration Programme 2011

The main focus of the 2011 exploration programme in Ecuador is the Rio Zarza Gold Project, with regional exploration work on the Santa Barbara (FJTX) and Valle de Tigre tenements.

Plans for the Rio Zarza project follow encouraging results obtained in the 2010 programme. Hand trenching of soil geochemistry and IP Chargeability anomalies will continue where possible, supplemented by drilling using the MD-2 shallow diamond core drill in areas of thicker cover.

The main exploration target is the Misahuallí-Suarez basin on the east side of the project, which will require additional deep-looking geophysics and 3-D modelling for target generation, leading to the second phase of diamond core drilling. Testing deep targets in the basin will require drilling 700 to 1000m holes, for an estimated 3000m total in 3 to 5 holes.

Brazil Gold Exploration Programme 2011

The current tenement portfolio for gold exploration in Brazil comprises 7 tenements (Processos) confirmed, 3 applications granted first rights, and three new applications submitted waiting DNPM approval, for a total of 71,644.44ha. The strategy in Brazil is to expand the portfolio of gold exploration tenements of both grass roots and advanced targets to obtain a strategic landholding in areas of favourable geology. Acquisition of tenements will be by direct application to regulatory authorities or with a clear path to sole ownership.

The main project area is Pedra Branca (11,939.77ha granted), where detailed magnetics and geological mapping has identified outcrop of haematite/martite laterite type Fe mineralization, which may be of economic interest given the proximity to the Anglo Ferrous Brazil Amapá iron mine. The Fe-enriched laterite is derived from underlying metamorphosed Banded Iron Formation, and is the same host rock as the Beadell Amapari Gold Mine. The Pedra Branca area is also the extension of the Mn-enriched stratigraphy which formed the manganese deposits at Serra do Navio, and may be prospective for carbonate type manganese mineralization. Geochemical soil sampling is planned to identify areas for bedrock trenching.

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 and followed industry standard QA/QC protocols.

About Ecometals

Ecometals Limited is a Canadian-listed mineral exploration and development company focused on the 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 exploration and development planning stages.

Chief Executive Officer William Lamarque said "Our corporate strategy is to focus and expand on gold exploration and production. The results so far from Rio Zarza have been encouraging and reinforces our corporate commitment to continued exploration there. Brazil also has an expanding gold exploration portfolio and we are also considering potential new opportunities there."

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.

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