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Toachi Mining Inc
Symbol TIM
Shares Issued 38,349,935
Close 2016-08-29 C$ 0.40
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Toachi Mining finds new targets at La Plata

2016-08-29 10:54 ET - News Release

Mr. Nick Tintor reports


A program to reprocess historical gravity data has generated several new, untested exploration targets at Toachi Mining Inc.'s La Plata high-grade volcanogenic massive sulphide (VMS) gold-copper-silver-zinc project in Ecuador.

Historical gravity data

Toachi's staff, working with David McInnes, an Australian geophysicist and an authority on reprocessing and interpretation of gravity data, analyzed a gravity survey completed in 2002. The purpose of the survey, according to a report completed at that time, was to determine if mineralization, which outcrops in the area around the former La Mina open-pit mine, would generate a gravity anomaly.

The survey included eight 200-metre-spaced east-west lines totalling 10.6 kilometres, which covered only a small portion of the entire La Plata concession, which strikes north for more than five kilometres.

This program was successful in demonstrating that VMS mineralization, which has very high densities relative to surrounding barren volcanic andesite and dacitic rocks, generates a distinct gravity anomaly in the area of the La Mina VMS deposit and former mine.

Reprocessed gravity data -- new, untested targets

The historical gravity data were reprocessed using the 3DMGInv gravity inversion routine, a sophisticated, leading-edge software program developed in Australia. This routine enables the geometry and the physical properties, such as the density of the anomaly sources, to be more accurately characterized.

The highest-priority target is the large gravity high immediately 200 metres east of the La Mina open pit, which has never been drilled.

"We can see that gravity correlates extremely well along the main La Mina VMS mineralized zone and is a valuable exploration tool," explained Nick Tintor, president and chief executive officer. "However, the new reprocessed data [have] identified several exciting new targets which have never been drill tested and represent well-defined, discrete and high-priority targets which we plan to test in our current program," he added.

Exploration potential

The gravity reprocessing study has been successful in generating new, untested exploration targets at the La Plata project.

Priority untested targets include:

  • A large 200-metre-by-250-metre target area immediately east of the La Mina open pit;
  • Potential for deeper, offset mineralization striking for 200 metres south of the last drill holes in the La Mina South VMS lens;
  • Four discrete gravity highs north of the mineralized Gautuza target area.

Toachi's first-phase 4,000-metre drill program started earlier this month and is focused on verifying, infilling and expanding mineralization in main La Mina deposit, leading to a National Instrument 43-101 resource estimate early next year. For a detailed description of the phase-one program, please see the company's press release dated Aug. 15, 2016, and available on its website or on SEDAR.

The company also plans on testing several of these new targets in the current drill program.

The La Plata project

Toachi entered into an option agreement with a private Ecuadorean company to earn a 60-per-cent-to-75-per-cent interest in the La Plata gold-copper-silver-zinc VMS project, located 85 kilometres south of Quito, Ecuador. For complete terms of the transaction, please see the company's press release dated Feb. 11, 2016.

La Plata is a gold-rich volcanogenic massive sulphide deposit which was the subject of small-scale mining from both open-pit and underground workings from 1975 to 1981.

From 1996 to 2000, Cambior Inc., a Canadian mining company, completed 8,628 metres of drilling and a preliminary resource estimate totalling 840,000 tonnes grading 4.8 grams per tonne gold, 54.4 grams per tonne silver, and 4.1 per cent copper, 0.7 per cent lead and 4.2 per cent zinc per tonne in 1999, according to a report completed by Amec Foster Wheeler, a mining consulting firm, in March, 2015.

Following a drill program by Cornerstone Capital Resources Inc., which included 5,933 metres of drilling from 2006 to 2007, a revised mineral resource estimate totalling 913,977 tonnes grading 8.01 grams per tonne gold, 88.3 grams per tonne silver, and 5.01 per cent copper, 6.71 per cent zinc and 0.78 per cent lead per tonne in the inferred category was completed.

The resource estimates described above are historical estimates as defined by National Instrument 43-101, Standards of Disclosure for Mineral Projects, Section.2.4. Toachi has not completed the work required to independently analyze and verify the results of the previous operators, nor has a qualified person completed sufficient work to classify the estimates as current mineral resources or mineral reserves. With respect to the Cambior estimate, the company is also not aware of what categories were used in the estimate. As a result, Toachi is not treating these estimates as current mineral resources or mineral reserves.

The company believes these historical results provide an indication of the potential of the property and are relevant from a continuing exploration perspective.

Phil Fox, MAIG, a qualified person as defined by NI 43-101, has reviewed and approved the contents of this press release.

We seek Safe Harbor.

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