Channel sets sights on El Mozo

Vancouver — After spending 18 months evaluating various gold projects for development, Channel Resources (CHU-V) has secured rights to earn up to 70% of the advanced El Mozo property in Ecuador.

The epithermal property hosts an oxide resource of 3.5 million tonnes grading 2.3 grams gold per tonne, or about 250,000 contained ounces of gold. Within this resource, 230,000 tonnes averaging 8 grams are exposed at surface with minimal overburden.

Preliminary metallurgical tests indicate that the oxide resource is amenable to heap leaching.

Channel views the gold project as having good exploration potential and notes that it has similarities to both the El Indio project in Chile and the Yanacocha mine in Peru.

The project area covers 10 sq. km in the Central Andean Valley, near the western foothills of the Cordillera Real. The project has good access and water is readily available.

Several significant deposits occur in the geologically prospective region, notably Iamgold‘s (IMG-T) Quimsacocha project and the Mirador copper-gold project of Corriente Resources (CTQ-T).

Iamgold recently reported impressive assay results from Quimsacocha, including 22.3 metres averaging 31.4 grams gold per tonne, along with silver and copper values. Channel’s El Mozo project is 40 km southeast of Quimsacocha.

Corriente, meanwhile, is carrying out a feasibility study for a starter open pit at Mirador. Highlights of recent drilling include 217 metres of 0.69% copper and 0.25 gram gold, and 281 metres of 0.74% copper and 0.33 gram gold. Channel’s project lies 60 km southwest of Mirador.

To earn 60% of El Mozo, Channel must spend at least US$1 million on exploration and development up to and including the preparation of a feasibility study. The Kelowna, B.C.-based junior can boost its interest to 70% by providing additional funding within 30 months of delivery of the feasibility study. If the company elects not to proceed to production, the property will revert to its local owner.

Channel plans to carry out an exploration program at El Mozo to advance the existing resource to reserve status. This will be followed by a feasibility study aimed at defining a heap-leach mine similar to that of Castle Mountain in California, which produced 1.2 million oz. gold over 12 years.

Channel’s management team is led by Ross Fitzpatrick, a Canadian senator who developed Castle Mountain into a mine in the 1980s while presiding over Viceroy Resource.