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Ezenet eyes bulk tonnage potential at Chuminga Copper Gold Project after supportive trenching results

Ezenet (ASX: EZE), to be renamed Oro Verde Limited, has provided some positive news on the company's due diligence activities at the Chuminga Copper Gold Project, which is located in a highly prospective copper-gold region of northern Chile.

Ezenet said that the breccia assayed 190 metres at 1.07% copper and 0.20 grams per tonne (g/t) gold, while importantly, the copper and gold results are similar to historical results - and thereby confirm the bulk tonnage potential of the breccia mineralisation.

Wolf Martinick, chairman and managing director, commented “The channel sampling along the strike of the copper-gold mineralised breccia at Chuminga provides further support for our request to shareholders to approve the acquisition of Chuminga at a shareholder meeting proposed for late November 2011.

"I am confident that drilling results are likely to be available in late November from our first phase drilling project and that these will further substantiate our confidence in the mineral prospectivity of Chuminga that others have concluded to have the potential to consist of 50-60 million tonnes containing 1.0-1.1% copper, 0.40-0.50g/t gold and 0.5 to 1% zinc.”

A financial plus for Ezenet is that the company recently disposed of its shares in Dundee Precious Metals shares, and together with the sale of smaller investments in two other companies has increased cash in the bank to around $1.8 million.

Together with an investment in Weatherly, currently worth about $2.1 million, Ezenet has sufficient cash to readily fund the outlined exploration activities and expenses associated with Ezenet’s change of activity.

Channel sampling breakdown

Channel sampling of the 204 metres of available strike of the mineralised breccia was conducted over 1 meter sample intervals.

The 204 (5-6kg) rock chip samples taken were subject to the following analytical scheme at Activation Laboratories, Coquimbo, Chile:

- Gold by fire assay/AAS on a 30gm sample weight; and
- Silver, gold, copper, lead, zinc, arsenic and molybdenum by AAS following a 4 acid “total digestion”.

Supporting infrastructure and road construction

Chuminga is located on the Pacific coast of northern Chile, around 60 kilometres north of the regional mining town of Taltal and about 115 kilometres south of the regional city and port of Antofagasta.

The region has excellent infrastructure and supports many mines including the world class Mantos Blancos, Chuquicimata and Escondida copper mines.

Work on the 5 kilometres long zigzag road from the coastal access road to the Chuminga mineralisation located about 650 metres above sea level is progressing with about 3.2 kilometres having been completed.

Construction of the road and seven drill pads along the immediate strike of the outcropping mineralisation should be sufficiently advanced to permit drilling to commence in late October, 2011.

Efforts are being made to establish a road route that will require minimal blasting, and thus reduce costs, and be trafficable by trucks. Steep scree slopes of loose rocks render road construction challenging.

Offer of non-renounceable options at $0.20

Following the proposed change of activity and re-admission to Official List, and conditional on receipt of shareholder approval, Ezenet will undergo a share reconstruction and a fundraising at $0.20 per share, with details to be outlined in a prospectus.

Ezenet intends to make a non-renounceable offer of options to those shareholders who are on the register as at a record date approximately 3 months after the date upon which Ezenet is re-admitted to the Official List, following the completion of its acquisition of the Vega project and its 20% interest in the Chuminga project.

The board presently intends to make the offer on the basis of 1 option for every 2 shares held with the consideration payable $0.01 per option.

The options will be listed and exercisable at $0.20 each on or before 31 December 2013.

The company said the board will re-assess the terms and conditions of the proposed options offer based on market and other conditions closer to the time of the offer.