EnviroGold "encouraged" by sampling results of San Gerardo prospect in Ecuador

EnviroGold (ASX: EVG) has received initial geochemical soil sampling results at the San Gerardo Concession in Southern Ecuador.

The results confirm and extend the size of the first of six drilling targets - previously mapped as copper (Cu), molybdenum (Mo), gold porphyry anomalies with open pit potential.

The company would be encouraged by the sampling that covered about 15% of the 2200 hectare concession as it has revealed a massive Cu-Mo anomaly within the centre of the initial soil sampling grid.

This result hints at the "blue sky" of the San Gerardo property and suggests that there is strong potential for the concession to host large scale porphyry style mineralisation.

EnviroGold could potentially add an additional 25,000 ounces of gold production per year to its Pinglio and Papercorp mines through its option on the San Gerardo concession in Azuay Province.

At EnviroGold's Azuay project, construction is targeted to commence in mid 2012, with  forecast annual gold production of 50,000 ounces from mid 2013.

A report from EnviroGold's Canadian consultants, Buscore Consulting, said “the Cu in soil anomaly is outstanding for both grade and scale and represents a significant target (over 100 hectares). The analytical scale of the anomaly is also very prospective with a number of samples in the .10 to .30% Cu range, which is extremely high for soil sampling."

EnviroGold is continuing geochemical soil and rock sampling over the concession and drilling of the first target is scheduled to commence in September 2012 after completion of magnetic and induced polarisation surveys.

A contractor has been engaged to provide two diamond drilling rigs for twelve months to undertake a total of about 25,000 metres of drilling on the San Gerardo open pit porphyry prospects, and in the vicinity of epithermal underground mining operations planned for expansion in 2012-13 as part of the company's Azuay project.

If the San Gerardo property realises its development potential it could benefit from a staged expansion of the planned Azuay project process plant and the sharing of infrastructure including tailings dams.

The San Gerardo property can be purchased at EnviroGold's option at any time within three years at a cost of US$4,300,000. The vendors, the Cincoca Mining Association, will be paid an option fee of US$300,000 which is deductable from the purchase price.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/18405/envirogold-encouraged-by-sampling-results-of-san-gerardo-prospect-in-ecuador-18405.html