Drill Results from Gigantones Zone, Guabisay Property, Ecuador
Rio Amarillo Mining Ltd.("RIO") is pleased to announce the results from the continuation of the first
diamond drill hole from the Gigantones zone at the Guabisay property in central Ecuador. The
results (assayed by Bondar Clegg of Vancouver) show three distinct zones that averaged 1.62 g/Mt
gold, 18.01 g/Mt silver and 0.68 percent copper over 96 metres in a silicified breccia shear zone. The
shear zone is visible over more that 100 metres vertically on a hillside and the apparent linear extent,
suggested by geochemical anomalies, is over 1 kilometre in length.
From To Interval Gold Silver Copper
(M) (M) (M) (g/Mt) (g/Mt) (percent)
69.0 88.5 19.5 4.75 30.15 0.21
88.5 165.0 76.5 0.82 14.92 0.80
165.0 177.0 12.0 0.14 2.80 0.13
Total
69.0 165.0 96.0 1.62 18.01 0.68
Based on the surface exposure of the zone and the -50 degree inclination of the hole, the true width
of the intersection is estimated to be at least 70 metres. The hole was drilled on the azimuth N60W.
The values encountered in the last 12 metres of the hole, that was drilled in an extremely hard
silicified breccia are anomalous and suggest that the western limit of mineralization, associated with
the structure mapped at surface, was not encountered.
RIO is currently drilling the second hole at Guabisay from the same drilling platform on an azimuth of
N90W and at an inclination of -60 degrees. The structure is expected to be encountered from 85
metres to 235 metres. Following the completion of the second hole, two additional holes are planned
to test the southern part of the zones.
RIO also announces it has closed a non-brokered private placement of 1,000,000 units to A.R. Rule
Investments (B.C.) Ltd. ("A.R.Rule") at the price of $0.30 per unit, which placement had been
previously announced in a press release dated May 7, 1997. Each unit consists of one common
share of the Company and one share purchase warrant which will enable the placee to purchase an
additional common share of the Company at the price of $0.30 for a period of two years after the
date of closing. The securities issued pursuant to this placement are subject to a hold period and
may not be traded in the province of British Columbia until the expiry of the hold period on June 27,
1998, except as permitted by the Securities Act (British Columbia) (the "Act") and the rules and
regulations made under the Act and pursuant to the rules of the Vancouver Stock Exchange. A.R.
Rule is an arms length party who has been given the right to nominate a member to the board of
directors upon closing as well as a right of first offer to purchase up to an aggregate of 1,500,000
shares and warrants in any subsequent financings conducted by the Company for a period of one
year. Pursuant to a private agreement, A.R. Rule will transfer to Mr. Wright 960,000 shares it has
acquired pursuant to this placement in exchange for 960,000 shares previously held by Mr. Wright
which are free trading and not subject to any hold period.
RIO is pleased to announce that Mr. John Brown, President of Pacific Opportunity Company Ltd.
and representing A.R. Rule Investments (B.C.) Ltd., has been appointed to the Board of Directors of
RIO. Mr. Brown is a Chartered Accountant who was formerly a Partner with Deloitte & Touche. RIO
also announces that the Board of Directors has approved the granting of 100,000 options to Mr.
Brown at $0.30 for a period of three years from July 3,1997. The granting of these options is subject
to regulatory approval.
RIO also announces that it is closing its exploration office in Lima, Peru effective July 31, 1997 and
that all staff associated with the office have been terminated including the General Manager, Mr. Hal
Waller. RIO's principal property in Peru, the Aija property, is currently being drilled by RTZ Mining
and Exploration Limited Sucursal Peru (RTZ-CRA) under the terms of a joint venture announced in a
News Release on June 16, 1997. Under the terms of the Agreement, RTZ-CRA can earn a 65
percent interest in the property through the expenditure of $US 3.890 million over the next two years.
RIO is a mineral exploration and development company engaged in locating, evaluating, acquiring,
and, contingent upon obtaining satisfactory exploration program results, developing mineral
properties in South America. The Company aggressively seeks value added opportunities on its own
or with others in areas of its primary focus.
On Behalf of the Board of Directors of
RIO AMARILLO MINING LTD.
James K. Wright
President |
