Salazar Resources Limited

Salazar Resources Limited

March 28, 2011 06:00 ET

Salazar Resources Limited Corporate Update and Plan for 2011 Mining Contracts in Ecuador

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 28, 2011) - Salazar Resources Limited (TSX VENTURE:SRL)(FRANKFURT:CCG) – Mr. Fredy Salazar, President and CEO, is pleased to provide an update on the Company's ongoing activities in Ecuador and the state of the mining contracts in Ecuador.


The February 18th, 2011 edition of El Comercio, one of Ecuador's leading newspapers, contained an article announcing that the Ecuadorian government had started negotiating mining production contracts with International Minerals (IMC) and Ecuacorriente. Several other projects (Pantanza-San Carlos project owned by Explorcobres S. A., Fruta Del Norte project owned by Kinross-Aurelian and Iamgold's Quimsacocha gold-silver project) have not yet proceeded to the mining contract stage pending completion of environmental, social impact or feasibility studies.

On Tuesday March 8, 2011 the Vice-Minister of Mines for Ecuador made a presentation at the Prospectors and Developers Association of Canada's (PDAC) annual convention in Toronto. The Vice-Minister announced that the Ecuadorian government hoped to have two mining production contracts executed by the middle of April 2011. The first mining production contracts would be signed with International Minerals on their Rio Blanco gold-silver project and Ecuacorriente's Mirador copper-gold-silver project. The Vice-Minister of Mines has also reported that the government anticipates granting of new mining concessions to resource companies by June 2011.

Said Mr. Salazar, "We are extremely pleased to see the continued progress by the Ecuadorian government in advancing the mining industry towards a sustainable and profitable future and are confident, that in short order, the mining sector will be open for continued and ongoing exploration, development and production to the benefit of all stakeholders in Ecuador for many generations to come. We plan to actively participate in the upcoming granting of new concessions so that we can augment our portfolio of highly prospective properties in Ecuador."


A second Company-owned drill recently arrived at the port of entry in Ecuador and is expected released to the Company by March 26th and be on site at Curipamba in the first week of April. The first drill will remain dedicated to drilling the El Domo deposit while the second will be used primarily for exploration drilling.

With the addition of the second drill rig the Company is planning on increasing its drilling from 1,000 meters per month to approximately 2,000 meters per month. The Company anticipates the completion of 20,000 meters of drilling in 2011. About 8,000 meters of infill and delineation drilling is planned to further enhance the quantity and quality of the El Domo deposit. The remaining 12,000 meters will be used to test and explore existing exploration targets in the vicinity of El Domo.

Field exploration activities will continue throughout the year at Curipamba to generate new exploration targets for drill testing.


The Company has established a robust program of consultation and education with the surrounding communities focused on the benefits and socioeconomic impacts of the mining industry and is proud to say it is building strong relationships within the communities.

The Curipamba project field work schedules have been developed to reflect the fact that many of Salazar Resources' employees are local farmers. A typical local employee works 15 days each month for the Company. On the 16th day the worker is paid to perform work for the community (e.g. park maintenance, river cleaning or local school maintenance) along with other people from the communities.

The Company works with local government bodies to ensure local people enjoy benefits from government Health, Education, and Infrastructure programs. The Company has also developed several reforestation initiatives within and in cooperation with the local communities. The Company encourages local sporting activities and has established 4 youth soccer leagues.


Salazar Resources is in full compliance with all the regulations established by the strict new Ecuadorian mining laws. All the environmental permits and documents are in order and up to date.


A metallurgical study of El Domo mineralization is being carried out by G&T Metallurgical Services Ltd. (G&T) under the supervision of Kevin Scott, P. Eng., of Roscoe Postle Associates Inc. (RPA).

The El Domo deposit is located in the Las Naves Central area of Salazar's Curipamba Volcanic Massive Sulphide (VMS) Project in Ecuador, and contains an NI 43-101 compliant Indicated Mineral Resource of 623,000 tonnes grading 3.0 g/t gold, 98.0 g/t silver, 3.70% copper and 4.16% zinc, as well as 2,499,000 tonnes of an Inferred Mineral Resource grading 4.3 g/t gold, 79.5 g/t silver, 3.24% copper and 4.28% zinc, as previously disclosed in a press release dated September 10, 2010.

Mineralized intersections from 12 diamond drill holes from the 2010 drill program were selected to provide material that is representative of the mineralized zone. A total of 206 kg was sent to G&T in September 2010.

Preliminary batch testing of a representative composite sample using conventional flotation processes has indicated that a copper recovery of 81% could be obtained at a concentrate grade of 22%. Separation of zinc from the copper concentrate has thus far proven to be challenging as the zinc content in the copper concentrates is higher than anticipated. Zinc concentrates grading as high as 54% zinc have been obtained but due to the challenges in copper flotation, the zinc recovery to zinc concentrate has been lower than anticipated. Testing completed to date is preliminary and has yet to be optimized.

Preliminary mineralogical analysis indicated that the separation of minerals by flotation may be affected by the presence of copper contained within the zinc minerals. Salazar Resources therefore commissioned Surface Science Western (SSW) in London, Ontario to carry out specialized mineralogical analyses to better understand this zinc-copper relationship prior to continuing with additional metallurgical test work. The preliminary results of this work indicate very small, micron or even submicron size, inclusions of copper minerals are often present in the separated zinc mineral grains. These fine inclusions consist of variable proportions of Cu, Fe, Sb, As and Pb. The largest percentage of these inclusions was determined to be copper mineral chalcopyrite. Therefore it has been concluded that much of the zinc mineral sphalerite present in the sample tested contains what is commonly referred to as "chalcopyrite disease", a well-known phenomenon for many zinc-copper deposits.

This is the first of many tests that the Company will be carrying out with regard to the metallurgy of the El Domo deposit and the Company is now restarting the metallurgical test work at G & T with the goal of optimizing a flotation process that will most effectively separate zinc and copper into separate concentrates.

Said Mr. Salazar, "In a reasonably short period of time we have substantially advanced our El Domo prospect and have established a resource for the benefit of our shareholders, a resource which is far from fully developed and which we are confident we will continue to expand. There still remains a lot of work to be done and challenges to overcome but we remain dedicated to advancing this project and are assessing numerous options to best advance our development efforts. Our work to-date has primarily focused on El Domo and we have barely begun our exploration efforts on our numerous other targets. I remain confident in the prospects for additional discoveries to come."


Fredy Salazar, President & CEO

Salazar Resources Limited

Salazar Resources Ltd. is a publicly-listed (TSX VENTURE:SRL)(FRANKFURT:CCG) mineral resource company engaged in the exploration and development of new highly prospective areas in Ecuador. Led by a senior Ecuadorian management team and most notably by its namesake Fredy Salazar, this team has been instrumental in other major discoveries throughout Ecuador. Being an Ecuadorian based company gives the company a strategic advantage enabling the company to complete exploration at a rapid pace. With an excellent property portfolio (3 projects - 42,900 hectares), good geopolitical positioning and a number of strategic corporate and financial partnerships, Salazar has positioned itself to be a strategic player in Ecuador and throughout South America.

Statements contained in this news release that are not historical facts are forward-looking statements, which are subject to a number of known and unknown risks, uncertainness and other factors that may cause the actual results to differ materially from those anticipated in the forward looking statements. Although we believe that the expectations in the forward-looking statements are reasonable, actual results may vary, and future results, levels of activity, performance or achievements cannot be guaranteed.

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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