Chinapintza Overview

Project Highlights

  • Existing NI 43-101 inferred resource of 719,000 tonnes, containing 138,714 Oz Au
  • Permitting underway for small scale production of 300 tonnes per day, pursuant to the “Small-scale mining regime” under Ecuador law
  • 209.9 hectare concession has been subject to extensive exploration since 1993 – $10 million invested to date
  • Previous exploration programs included 22,580 metres of drilling, rock sampling and geophysical data
  • 10,000 meter drill campaign to expand NI 43-101 mineral resource planned for Q4 2013



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Background (Exploration & Development)

The region in southeast Ecuador, which contains the Chinapintza Gold Project has received considerable geological attention following the discovery and definition of the ‘Fruta del Norte’ gold deposit held by Kinross/Aurelian Resources located approximately 31km north of Chinapintza and the Mirador copper deposits of China Railway, Tongling (formerly Corriente Resources Inc.) located 55km to the north. Dorato Resources Inc.’s concessions and camp adjoin the Chinapintza Gold Project on the Peruvian side of the Ecuador-Peru Border some 2km from the Chinapintza Gold Project.

The Chinapintza Gold Project concessions surround the Jerusalem project (225 hectares) of Dynasty Metals & Mining (TSX:DMM). Ecuador Gold and Copper Corp. (TSX.V:EGX) through its 90% owned Ecuadorian subsidiary, Condormining owns the Condor Gold Project concessions to the west and south of the Chinapintza Gold Project.

The Chinapintza Gold Project or “Chinapintza Property” covers an area of 209.9 km2, running approximately 5km north-south and up to 4km east-west. The Chinapintza Gold Project concessions cover approximately 37% of the Chinapintza deposit. The balance of the Chinapintza deposit is owned by Dynasty Metals & Mining Inc. within its Jerusalem Gold Project.
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Figure 1: Regional Location Map Showing Chinapintza and Nearby Projects.
Summary of drilling to date on the Chinapintza Gold Project.

Location and Access

The Chinapintza Gold Project is located within the Zamora province of the Loja Region of southern Ecuador.

The Loja region is serviced by air, (Catamayo airport) with a new international airport called “Santa Rosa” located south of Machala City and around six hours drive from the property. Additional airports are located at Zamora and Gualaquiza.

Access is along sealed highways except for the last 10km, with a dirt road through the town of La Punta via the regional centre of Zamora, (pop. approximately 6,000).

Depending on road conditions, travel time from Loja airport to the property is from 3 to 4 hours. Loja to Zamora is approximately 50km. Zamora to the property is 73 km.

The Chinapintza Gold Project and surrounding areas are accessible by 4WD vehicles along a number of variably maintained dirt roads that are subject to landslides caused by seasonal heavy rainfall which may prevent access from time to time.
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Location and Access

Topography, Elevation and Vegetation

The Chinapintza Gold Project is located in the Upper Amazon Region of south-western Ecuador on the western flanks of the Cordillera del Chinapintza whose crest defines the Ecuador-Peru border. Elevations within the Project area range from 1,300m above sea level up to 1,700m and averaging 1,500m. The topography is very rugged and slopes are steep sided (290 average slope) that may assist access for underground mining. However, extensive site development may be required for siting waste dumps, processing plant and tailings disposal areas. The mountains are covered with typical dense tropical rain forests and vegetation.

Background and Chronology

Pre-Colombian:

Goldmarca (2004) indicates that the presence of gold in the general area was known since pre-Colombian time.

1984:

The Pachicutza Mining Camp including the Chinapintza vein system discovered by informal miners (which includes the deposit within the Chinapintza Concession).

1988 – 1991:

The first systematic exploration, covering an area of some 25,000 hectares, was carried out by Pachicutza CEM, an association of companies formed in participation with the Industrial Division of the Ecuadorian Army (DINE). One of the major participants and sources of financing was Prominex U.K. Work completed included regional mapping, reconnaissance geochemical and stream sediment sampling over a larger area, including the area of the Chinapintza Concession.

Most of the now-known prospects and deposits in the district were first described during the work by Pachicutza CEM. These include several gold-bearing polymetallic vein and/or breccia systems associated with porphyry intrusions.

1991

Prominex U.K. withdrew from the project and TVX Gold, through its subsidiary Condor Mining became involved. TVX undertook detailed surface and underground geological mapping over a larger area, including the area of the Chinapintza Concession.

1994

The Nangaritza Mining Cooperative applied for and was granted the 225 hectare Jerusalem Concession.

1995

The TVX subsidiary Ecuamining S.A. purchased the Jerusalem Concession from the Nangaritza Mining Cooperative.

1994 – 1995

TVX constructed local access roads and did 29,000 metres of drilling on vein and breccia systems over a larger area, including the area of the Chinapintza Concession.

1996 -1997

TVX completed a further 10,000 metres of drilling and constructed a 725 metre long access tunnel into the 1535 level of the Chinapintza Mineral Deposit. The tunnel portal is on the Viche Conguime 1 Concession (from which the Chinapintza Concession is being excised from), while the final 340 metres (approximately) is on the Jerusalem Concession. A few hundred tonnes of mineralised material were stockpiled. TVX completed studies that they described in documents issued at the time as a reserve estimate and feasibility study on the Chinapintza mineral deposit.

1998

TVX withdrew from the project. For some period of time after withdrawing from the exploration and development of precious metal vein and breccia systems, TVX explored for porphyry copper systems within the district.

2001

Ecuasaxon S.A. acquired the Jerusalem Concession from Ecuamining S.A.

2003

Ecuasaxon S.A. transferred the Jerusalem Concession to Elipe S.A., an associated company with shared management.

2012

Condormining drills a single inclined 756 metre long diamond drill hole at the Chinapintza Concession.

Present

Nearby to the Chinapintza Concession, small scale mining is being carried out on the Jerusalem Concession by a third party with the permission of Elipe. In exchange for allowing the mining, Elipe receives 25% of the mine production. The presence of active, authorized miners on the site inhibits incursions by illegal miners

Mineral Concessions

The Chinapintza Concession is located in the Zamora-Chinchipe Province, Ecuador, within a portion of a regional Mesozoic (Jurassic-Cretaceous) fold and thrust belt and contains numerous precious metal occurrences, Table 1 below.
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Tenement Map, Chinapintza Gold Project Mineral Concession.



The Chinapintza Gold Project is comprised of the Chinapintza Concession (currently being excised from the Viche Conguime 1 Concession, which is currently registered in the name of Condormining) and is owned by Chinapintza Mining under the terms of the Chinapintza Agreement between Condormining and Guangshou Ecuador. The Chinapintza Gold Project area is a total of 209.9ha. (2.099km2).
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Concession Locality Map

Small Scale Mining Operation Definition

The Chinapintza Gold Project is defined as a Small Scale Mining Operation by the Ecuador government. Under this regime, any mine production is subject to royalty payments to the Ecuador government. The relevant royalties are as follows:

  • Gold and silver; 3% gross value of bullion produced; and
  • Base metals including copper, lead, zinc; 3% gross value of metal produced.



No other royalties, rents, fees or other payments are required to be paid on mine production or exploration rights. Pursuant to the Chinapintza Concession and pursuant to the drilling permit assigned by Condormining to Chinapintza Mining under the Chinapintza Agreement, Chinapintza Mining has all rights to access and occupy the surface area of the Chinapintza Concession for exploration and development of the concession, (including an underground exploration program) with up to 300 tonnes per day of gold mineral extraction at the Chinapintza deposit pursuant to the “Small-scale mining regime” under Ecuador law, which limits such exploration development to 300 tonnes per day of gold mineral extraction.

Exploration Drilling

Except for the one exploration hole drilled by Condormining in November 2012, no exploration drill holes have been drilled at the Chinapintza Gold Project since 1996. The holes drilled are summarised below.
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Location of adjacent and nearby mineral properties and the location of relevant mineralized structures discussed above.


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Chinapintza Location Map of Historical Exploration

Regional Geology

The Chinapintza Gold Project is located within the Chinapintza Real Cordillera, between the Andean Cordillera in the west and the Pre-Cambrian Amazon Craton, an assemblage of metamorphic rocks older than about 600 million years that forms the underlying lithologic “platform” for much of the Amazon region. It forms part of a significant Jurassic-Cretaceous back-arc fold-thrust belt with Jurassic granitoid plutons and younger supracrustal sequences.
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Regional Geology Map Peru-Colombia.



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Regional Geology Map Ecuador.

Geology and Mineralization

The main mineral systems within the Chinapintza Property are narrow fault-veins of the Chinapintza Vein System.
The mineralization is developed in a Lower Cretaceous felsic volcanic-intrusive complex which overlies and intrudes the granodiorites of the Lower Jurassic Zamora Batholith. This epithermal district is hosted by multiple eruptive centres within a rhyolitic volcanic complex that has undergone multiple intrusive and brecciation events. These multiple events have overlapped and possibly deformed adjacent centres resulting in complex geology which is still not fully understood.

The Chinapintza Vein System Complex that straddles the Chinapintza Gold Project, the adjacent Dynasty Metals Jerusalem Project to the north, and the Los Cuyes and, Soledad-San Jose-Guaya Complexes belonging to Condormining in the south are hosted within breccia complexes associated with intrusive volcanism. The predominant controls on mineralization are interpreted as a Mesozoic diatreme emplacement and associated brecciation events, plus a series of broadly N-E and N-W trending structures that are partly related to the development of the regional fold-thrust belt.

Mineralization

The mineralization in the Chinapintza epithermal veins is principally open space fillings in mainly quartz veins. Bands and seams, varying in width from <30 cm to 200 cm, consisting almost entirely of sulphides are interbanded and intergrown with calcium, iron and manganese carbonates, quartz and clay minerals commonly forming colloform and drusy textures. The veins commonly splay out upwards or become stockwork zones. Sericite, as an alteration product of feldspars, pyrophyllite and smectite is commonly present.

Gold is present in its native form and as electrum. Sulphides and other metal-bearing minerals commonly found associated with the gold in the mineralised veins include, in roughly decreasing order of abundance: pyrite, sphalerite, galena, arsenopyrite, pyrrhotite, chalcopyrite, bornite, tennantite-tetrahedrite, pyromorphite, anglesite, covellite, chalcocite and malachite.<

In general terms the Chinapintza mineral deposit lies within an area of phyllic and argillic alteration (characterized by light coloured fine mica and clay minerals) surrounded by a halo of propylitic alteration.

The immediate wall rocks of veins exhibit intense phyllic-argillic alteration, as well as moderate silicification. Carbonate minerals are locally present.
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Regional Geological map of Chinapintza Sector.

Mineral Deposits

Mineral deposits in the district mainly contain sulphides of copper, lead and zinc with associated precious metals. Chinapintza is the best example of a high grade vein deposit. Also present are several mineralised breccias and porphyries containing gold and silver mineralization along with very low grade base metals as by-products.

The Chinapintza mineral deposit is a base and precious metal vein system that is considered a low sulphidation epithermal type. The known part of the system probably formed deep enough below the surface that it did not vent to the surface (British Geological Survey report, 2000).

The vein swarm that hosts mineralization extends for at least 5 km along its north-west trend, but its major development is over an interval of about 1.5 km within the Chinapintza Porphyry extending into the Jerusalem Concession.

The veins are for the most part tensional, characterized by open space filling, though in most veins the latest event has been brittle faulting in the plane of the vein. The late brittle faulting locally brecciated and milled earlier mineralization. The mineralised portions rarely exceed 50 cm of thickness and are typically less than 30 cm thick. There is some tendency for the veins to become thicker with increasing elevation and towards their tops they may split into swarms of veinlets, stockworks or breccia zones.

The horizontal trend of the principal veins is between 295o and 360o, most being in the range 330o to 350o. Two principal dip orientations are present, steep south-westerly and more gentle but still steep north-easterly. In addition, some late, transverse, east or northeast trending faults and veins exist, though they are not yet known to form a significant component of the mineralised body.
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Geological Map of Mineralization in the Chinapintza Area.



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Geological Map of Main Mineralised Veins at Chinapintza.



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Typical Cross-section through Chinapintza.



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Drill hole location plan within Chinapintza Project (Inside pink concession boundary)

Underground workings shown in BLUE within Project, shown in ORANGE within adjacent Dynasty Concession – NOT IN CHINAPINTZA PROJECT.

Past Production

Artisanal mining, both controlled and un-controlled, has occurred on the properties over the years with an unknown amount of ore extracted by these miners. The total quantity of ore mined and gold extracted is unknown. Most of this mining has occurred in the higher grade quartz veins at Chinapintza. Accordingly, the resource estimates contained within this report allow for an estimated 15% removed by historic mining. Also, no mining, metallurgical or economic factors were considered to limit, by lower cut-off grade or by depth, of any of the resource estimates.

Environmental Considerations

An annual Environmental Audit Report is required to be submitted annually to the Ecuadorean government and this report must be approved before further exploration work in subsequent years can proceed. This report shows the environmental impact of the previous year’s exploration work and any remedial work that has been undertaken to make good any damage from previous work that has occurred.

The 2012 Annual Environmental Audit Report has been submitted by Condormining and has been approved.