High Grade Trenching And Sampling Results North Of La Mina Deposit in Ecuador

TORONTO – Toachi Mining Inc. has completed a series of new high grade trenching results and encouraging stream sediment sampling results extending to 1.1 km the known VMS corridor footprint towards the north including trenching of 2.5m of 5.36 g/t Au, 71.18 Ag, 2.14% Cu, 3.22% Pb & 10.86% Zn. Alain Bureau, President and CEO said, "Results from the surface trenching program to date shows significant continuity of high grades, widths and consistent mineralization right at surface identical to the surface signature at La Mina deposit.”

Exploration work and resource drilling results completed to date suggest that the La Mina VMS Deposit belongs to a subset of VMS deposits where sulfides have replaced favorable horizon(s) of unconsolidated volcanic and volcano-sedimentary material through a specific mechanism of hydrothermal activity at the paleo sub-seafloor level.

High-grade massive sulfide mineralization at La Mina is overlain by a thick sequence of mafic volcanic and volcaniclastic rocks with incipient chlorite-epidote-hematite alteration. However, the immediate hanging wall contact to the VMS ore zone has been subsequently affected by the final waning phases of hydrothermal activity, and consequently exhibits a distinct geochemical signature. This thin contact horizon shows silica ± hematite metasomatic replacement with anomalous geochemistry in combinations of many or all of these elements (Au, Ag, As, Ba, Sb, Hg, Cu, Pb, Zn).

The above observations were used as a vectoring tool along with our understanding of the La Mina deposit lithostratigraphy and unique alteration styles in defining the immediate hangingwall and the footwall to the known VMS ore horizon.

Regional exploration at La Plata has always faced a challenge because of the scarcity of bedrock exposures related to dense subtropical foliage and moderately thick cover sequences of airfall tuffs and pyroclastic debris flows. This has guided exploration efforts to use a multi-faceted systematic approach. Toachi’s interpretation of geophysical survey data (IP, magnetic, gravity) in conjunction with field reconnaissance, rock chip sampling and stream sediment sampling programs led the exploration team to new under-explored areas with partially covered bedrock that was cleared, sampled and mapped. These exploration efforts also pertain to our current focus on the assessment, understanding and discovery of new targets close to the existing La Mina deposit.

Prior to and during the field reconnaissance and stream prospecting programs north of the La Mina deposit, the Toachi team considered the evidence that the extensive shear zones mapped across this area may have been re-activated several times throughout their geological history. These shear zone structures might have acted as conduits allowing hydrothermal fluids to recurrently circulate leading to alteration of the adjacent mafic volcano-sedimentary hanging wall sequence and possibly remobilizing the primary sulphide mineralization giving the appearance of a phyllic altered footwall or a VMS stringer zone. These weakened zones of intense faulting and shearing exhibit numerous deformation styles and varying geometries and are inferred to be formed along the susceptible mafic-felsic contact zones due to their different rheologic properties.

The inferred continuation of the previously covered high-grade VMS horizon at the Guatuza and San Ramon prospects is strongly supported by the results of recent stream sediment prospecting and trenching (Figure 2). The stream sediment samples taken in a NE trending stream and its western confluences draining the Guatuza and San Ramon prospects have yielded moderate to highly anomalous values for gold, silver, copper, lead, zinc, barium, arsenic, mercury and antimony. This inferred 550m long N-S mineralized corridor, starting at the southern end of the Guatuza prospect, is also supported by coincident geophysical (IP chargeability) and geochemical (soil and rock) anomalies.

Additionally, stream sediment samples collected along the San Ramon drainage to the west stretching some 650m further to the north from the Guatuza North prospect have shown continuous and persistent geochemical anomalies along the western side of the prominent NNE trending ridge separating the Guatuza’s and the La Flaca Prospects.=

The Guatuza prospect was the subject of sporadic exploration activity by several previous operators working at La Plata. The prospect has undergone partial, wide-spaced exploratory drilling that resulted in several significant mineralized drill hole intercepts.

Toachi drilled six (6) shallow scout holes totaling 802m in 2016 and 2017 to test the continuity and grade of the previously identified mineralized zones. The intersected VMS mineralization tested by scout drilling appeared to be discontinuous, faulted, and exhibiting intense ductile and brittle deformations. These drill hole intercepts were previously reported in a corporate press release dated March 1st, 2017. Toachi determined at that time that more work was needed to understand the nature and geometry of the intersected high-grade mineralization.

The reinterpretation by Toachi of the historic and current drill holes at Guatuza, along with additional field reconnaissance, has inferred a continuous NNE trending mineralized shear corridor cutting through the prospect. The continuation of this corridor has been confirmed to extend to the north-northeast for at least 215m from the mineralized intercept in drill hole CMLP-16-21.

The company’s address is 2400, 120 Adelaide Street West, Toronto ON M5H 1T1, (416) 365 7043, www.toachimining.com.