International Minerals, Iamgold team up in Ecuador

International Minerals (IMZ-T) has dealt Iamgold (IMG-T) an option to earn a 60% interest in its Canicapa gold project in southern Ecuador.

International Minerals recently acquired the property by agreeing to pay the underlying vendor US$10,000 per year and a 2.5% net smelter return royalty on future production. Also, a US$500,000 payment is due upon the start of commercial production, and the royalty can be repurchased at any time for US$5 million.

To earn its stake, Iamgold must spend US$2 million on exploration over 5 years. A further 20% can be acquired in return for funding and completing a bankable feasibility study in the following three years.

Iamgold has begun a program of geological mapping and geochemical sampling to follow up a 14-sq.-km area in which argillic alteration and leaching has occurred. Trenches dug in the area returned as much as 3 grams per tonne from individual channels, with the best two running 2.2 grams over 12 metres and 0.6 gram over 132 metres.

(The previous owner also sunk seven shallow diamond drill holes, but failed to overcome the poor ground conditions. Consequently, most holes are believed to have stopped short of their mark, so results were similar to those found at surface. The deepest hole stopped 162 metres down.)

Drilling will begin in the second half of the year.

In addition to Canicapa, International Minerals is seeking funds for its Rio Blanco gold-silver property. Also in Ecuador, the property is the more advanced of the two, hosting some 5 million tonnes in three zones averaging 5.5 grams gold and 42 grams silver per tonne.

The in-house estimate excludes an upper cutting factor but includes a lower cutoff of 1 gram or 5 grams. The lower cutoff grade was applied to mineralization extending no deeper than 50 metres below surface.