Zappa Resources Ltd -
Sale of Ponce Enriquez properties completed;
La Fortuna to be sold; La Plata exploration
Zappa Resources Ltd
ZPA
Shares issued 23,569,790
1998-09-16 close $0.2
Wednesday Sep 16 1998
Mr. Albert Gerry reports
Effective Sept. 1, 1998, Zappa Resources closed the sale of its title rights interests
in the Guadalupe, Mollopongo and Papa Grande properties, in the Ponce
Enriquez mining district of southern Ecuador, to Ecuadorian Minerals. Formal
assignment documentation is expected to be executed in Ecuador, at the latest, by
the end of the month.
As announced in Stockwatch April 21, 1998, 2,500,000 shares of Ecuadorian
were issued to Zappa, of which: 500,000 were delivered as of Sept. 1, 1998; and
2,000,000 will be delivered in tranches of 500,000 at the end of each six month
period following the date of closing.
The provision for the delivery of an additional 500,000 shares, based on the
market price of gold, was removed from the final agreement, given the existing
market conditions.
At closing, Zappa and Ecuadorian also executed a royalty deed conferring upon
Zappa rights to a net smelter royalty interest of up to 2 per cent on eventual
production from the Ponce Enriquez properties and any properties which may be
acquired by Ecuadorian south of the Ponce Enriquez properties (collectively, the
royalty properties). Such royalty interest may be reduced by an amount equal to
the amount of any Ecuadorian government royalty, subject to a minimum reduction
of 0.5 per cent on certain portions of the royalty properties and 1 per cent on all
other portions.
Zappa also signed an agreement in Ecuador, on Sept. 9, 1998 to sell its 25 per
cent interest in La Fortuna for $160,000 in cash. The cash payments to Zappa
from the purchaser, Fortuna Gold Corp., are payable as follows:
$70,000 (U.S.) upon the closing, to take place by Sept. 18, 1998;
$45,000 (U.S.) to be paid six months after closing;
$45,000 (U.S.) to be paid 12 months after closing.
La Plata
Cambior Inc., Zappa's joint venture partner, completed three additional holes
(numbers 26, 27 and 28), 100 metres south of Zappa's previously reported holes
23, 24 and 25. Hole 23 resulted in 9.8m of massive sulphide mineralization at
2.59 g/t gold; 69.5 g/t silver; 14.31 per cent copper; and 1.7 per cent zinc.
By visual inspection of vertical hole 26, the hole encountered the targeted rhyolite
dome, but did not intersect sulphide mineralization. However, holes 27 and 28
intersected what Zappa believes is the edge of the sulphide lens. This is not
surprising, as kuroko massive sulphide type deposits pinch and swell. Zappa is
confident that additional drilling will lead to other discoveries in the targeted areas,
as multiple lenses are common in these geological settings.
Cambior commissioned an independent study by a massive sulphide specialist
during August, to evaluate the potential of the property. The report concluded that
the exploration potential of La Plata remains excellent and a lithogeochemical
survey on the whole property will be completed before year end. The next
exploration phase will be reviewed in light of the 1998 drilling and
lithogeochemisty results.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
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