TIDMSOLG
RNS Number : 4001P
SolGold PLC
31 August 2017
31 August 2017
SolGold plc
("SolGold" or the "Company")
Cascabel Exploration Update
Alpala copper-gold deposit showing rapid growth as expanding
drill fleet brings drill based Alpala Exploration Target
close to 1 billion tonnes.
The Board of SolGold (AIM and TSX code: SOLG) is pleased to
provide an update on the drilling results of Holes 26 and 27 and
the drilling progress at Cascabel, the Company's 85% owned
copper-gold porphyry project in Ecuador.
HIGHLIGHTS:
Ø Hole 26 assay results return open ended 810m grading 0.72 %
copper equivalent.
Ø Hole 26 extends Alpala mineralisation 300m to the northwest of
Hole 15R2 (which returned 830m grading 0.93% copper
equivalent).
Ø Alpala Northwest now presents second potential large block
cave target.
Ø Hole 27 assay results extend Alpala mineralisation 100m
southeast of Hole 21, and 250m southeast of Hole 16.
Ø Alpala Southeast has been growing. Hole 24-D1R (Rig 3) extends
Alpala Southeast mineralisation beneath Hole 24. Assay Results
pending.
Ø Alpala Central has been growing. Hole 23R-D1 (Rig 1) extends
Alpala deep mineralisation east of Hole 23R-D1. Assay results
pending.
Ø Man-portable drill rigs 6 and 7 mobilising to site from
Cuenca, Southern Ecuador.
Ø Drilling program expanding to 10 drill rigs by January 2018.
Second drilling contractor signed.
Ø Large track mounted Sandvik drill rigs 8 and 9 mobilising via
sea freight, expected on site at beginning of November.
Ø Geophysical 3DIP survey in progress - 70% Spartan portion
completed.
Ø Aguinaga target scheduled for drill testing on completion of
drill data collection for the Alpala Maiden Resource Estimate
expected by end of 2017, and on completion of Spartan Orion IP
Survey and new magnetic modelling.
Ø Planning to complete a prefeasibility assessment by end of
2018.
Commenting on the current drilling, SolGold CEO, Nick Mather
said:
"Hole 26 results have demonstrated a clear extension of Alpala
to the northwest, with much more intense mineralisation than
evident in Holes 11 and 13. It appears that Holes 11 and 13 may
have skirted the top southwest side of the deposit, underscoring
the importance of the magnetic modelling. We now envisage a second
large block cave target at Alpala Northwest. Hole 27 has extended
the halo mineralisation on the south east side of Alpala
Central."
References to figures and tables relate to the version of this
release visible in PDF format by clicking the link below:
http://www.rns-pdf.londonstockexchange.com/rns/4001P_-2017-8-31.pdf
FURTHER INFORMATION:
Drilling Results - Continued Growth at Alpala
SolGold's Alpala deposit continues to grow with each new drill
hole as drilling focuses on high grade porphyry centres at Alpala
Northwest, Alpala Central and Alpala Southeast. Over 44,500m of
drilling has been completed to date along the greater Alpala trend
(Figure 1). The use of the Devico drilling technique for deviated
path holes from existing parent holes is delivering savings of up
to three weeks and $500,000 per drill hole.
From the drilling results at the growing Alpala Porphyry Copper
Gold Deposit, the data gathered has provided the basis for the
estimation of an exploration target over the area drilled to date.
Updated 3D modelling and grade shell interpolants outline an
approximate exploration target at Alpala close to 1 billion tonnes
at >1% copper equivalent, using a cut-off grade of 0.3% copper
equivalent. This management estimate equates to an endowment of
> 8Mt of contained copper equivalent (see Figure A: Cautionary
Notice). The Company is directing drilling capability and
operations currently to the collection of drill data to be used in
the delivery of a Maiden Inferred Resource Estimate to address this
target by end of 2017.
SolGold is also commencing planning for the collection of
necessary data to complete a prefeasibility assessment by end of
2018.
Hole 26 (Rig 4 Alpala Northwest), was completed on 30th July at
a depth of 1875.9m. Assay results returned an open ended 809.95m
grading 0.72% copper equivalent. Hole 26 extends Alpala
mineralisation 300m to the northwest of Hole 15R2 (which returned
830m grading 0.93% copper equivalent). A strongly mineralised
diorite intrusion encountered in the lower portion of Hole 26
confirms the Alpala Northwest deposit at depth, some 400m below the
intersection achieved in Hole 13 of 190m @ 0.82 % copper equivalent
(0.63 % Cu, 0.31 g/t Au). Mineralisation intersected in Hole 26
presents second a potential large block cave target for the
project.
Hole 27 (Rig 2 Hematite Hill), was completed on 14th July at a
depth of 1614.3m. Hole 27 extends Alpala mineralisation 100m
southeast of Hole 21, and 250m southeast of Hole 16, which returned
894m @ 1.41 % copper equivalent (0.78 % Cu, 0.99 g/t Au).
Summary intersections from Holes 26 and 27 are shown in Table 1
below.
Hole 23R-D1 (Rig 1 Alpala Central) was completed on 10th August
at a depth of 1626.6m. Hole 23R-D1 assay results remain pending.
Hole 23R-D1 (Rig 1 Alpala Central) was a "daughter" hole using
Devico testing for the eastern extensions to the high-grade
intrusions intersected in Hole 23R, which recently returned 770m @
1.44 % copper equivalent (0.71 % Cu, 1.16 g/t Au).
Hole 24-D1R (Rig 3 Alpala Southeast) was completed on 17(th)
August at a depth of 1268.15m. Hole 24-D1R assay results remain
pending. Hole 24-D1R was a "daughter" hole leaving the "parent"
(Hole 24) at 735.0m depth testing for depth extensions to the
mineralisation discovered in Hole 24 which recently returned 586.0m
@ 0.43 % copper equivalent (0.27 % Cu, 0.25 g/t Au) from 636m,
including 160m @ 1.04 % copper equivalent (0.63 % Cu, 0.65 g/t
Au).
Selected examples of mineralisation being encountered in recent
drill holes are shown in Figures 2, 3, 4, and 5.
The Cascabel drilling program is expanding to 10 drill rigs by
January 2018 as a second drilling contractor mobilises large track
mounted drill rigs via sea freight. A further two man-portable
drill rigs (rigs 6 and 7) are currently mobilising to site from
Cuenca, Southern Ecuador.
Current Drill Holes at Alpala - Further Expanding Resource
Potential
Hole 26-D1 (Rig 4 Alpala Northwest) commenced drilling 2nd
August and is at a current depth of 1426.7m. Hole 26-D1 is a
"daughter" hole breaking away from the Hole 26 parent hole at 790m
depth. Hole 26-D1 is testing for the eastern extensions to the
high-grade intrusions intersected in Hole 15R2, which returned 830m
@ 0.93 % copper equivalent (0.63 % Cu, 0.46 g/t Au).
Hole 28 (Rig 2 Hematite Hill) commenced drilling on 15(th) July,
and is at a current depth of 1267.36m. Hole 28 is infilling between
Holes 19, 16, 21 and 27 focusing on confirming resource potential
at Alpala Central.
Hole 29 (Rig 5 Alpala East) commenced drilling on 9(th) August,
and is at a current depth of 478.53m. testing high grade extensions
along Alpala Central deposit eastern flank.
Hole 30 (Rig 1 Alpala Central) commenced drilling on 18th
August, and is at a current depth of 315.0m. Hole 30 is infilling
between Holes 22 and 27 focusing on confirming resource potential
at Alpala Central.
Hole 31 (Rig 3 Alpala Southeast) commenced drilling on 27th
August, from a drill site approximately 100m north of the Hole 24
and 24-D1R drill site. Hole 31 is at a current depth of 21.0m,
drilling the first of a series of infill holes between Alpala
Southwest and Hematite Hill, ahead of resource estimation expected
in December 2017.
Geophysics and Geochemistry - Refining Drill Targeting
Recently completed constrained 3D MVI magnetic models have
revealed a northwest trending line of significant magnetic bodies
at Moran, Trivinio, Alpala Northwest, and Alpala Central (Figure
2). These bodies are thought to replicate subsurface mineralised
envelopes, such as that confirmed by drilling at Alpala Central
(Figures 6 and 7).
Specialised 3D geochemical modelling of porphyry geochemical
signatures in soil and auger data by Fathom Geophysics has produced
a number of targets that have confirmed the major porphyry centres
at Alpala Central, Aguinaga and Tandayama-America, as well as
highlighting a deep target extending immediately north of the
existing Alpala West porphyry centre, to approximately 1000m west
of the Moran target. (Figure 8). These targets are determined from
computer algorithm analysis of the zoning of copper, molybdenum,
bismuth, tellurium, selenium, arsenic, antimony and thallium in
soil and auger samples, as compared to the distribution of similar
elements in global porphyry copper deposits (e.g., Yerington,
Nevada - USA).
The Geophysical 3DIP survey across the Cascabel tenement is
progressing well, having completed over 70% of the Spartan portion
of the Spartan-Orion hybrid 3DIP survey.
Qualified Person:
Information in this report relating to the exploration results
and exploration targets is based on data reviewed by Mr Nicholas
Mather (B.Sc. Hons Geol.), the Chief Executive Officer of the
Company. Mr Mather is a Fellow of the Australasian Institute of
Mining and Metallurgy who has in excess of 25 years' experience in
mineral exploration and is a Qualified Person under the AIM Rules.
Mr Mather consents to the inclusion of the information in the form
and context in which it appears.
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of the
Regulation (EU) No 596/2014 until the release of this
announcement.
By order of the Board
Karl Schlobohm
Company Secretary
Brisbane, Australia
CONTACTS
Mr Nicholas Mather Tel: +61 (0) 7 3303 0665
SolGold Plc (Executive Director) +61 (0) 417 880 448
nmather@SolGold.com.au
Mr Karl Schlobohm Tel: +61 (0) 7 3303 0661
SolGold Plc (Company Secretary)
kschlobohm@SolGold.com.au
Mr Ewan Leggat / Mr Richard Morrison Tel: +44 (0) 20 3470
0470
SP Angel Corporate Finance LLP (NOMAD and Broker)
ewan.leggat@spangel.co.uk
Follow us on twitter @SolGold_plc
NOTES TO EDITORS
SolGold is a Brisbane, Australia based, dual AIM and TSX--listed
(SOLG on both exchanges) copper gold exploration and future
development company with assets in Ecuador, Solomon Islands and
Australia. SolGold's primary objective is to discover and define
world--class copper--gold deposits. The Board and Management Team
have substantial vested interests in the success of the Company as
shareholders as well as strong track records in the areas of
exploration, mine appraisal and development, investment, finance
and law. SolGold's experience is augmented by state of the art
geophysical and modelling techniques and the guidance of porphyry
copper and gold expert Dr Steve Garwin.
SolGold was shortlisted as a nominee for the Mining Journal
Explorer Achievement Award for 2016. The Company announced USD54m
in capital raisings in September 2016 involving Maxit Capital LP,
Newcrest International Ltd and DGR Global Ltd, and a USD41.2m
raising in June of 2017 largely from Newcrest International with
USD1.2m raised from Ecuadorean investors. All of these raisings
were undertaken at substantial premiums to previous raisings, and
SolGold currently has circa USD65 million in available cash to
continue the exploration and development of its flagship Cascabel
Project.
Mr Craig Jones joined the SolGold Board on 3 March 2017,
nominated to the Board of SolGold by Newcrest Mining, now a 14.54%
shareholder in SolGold. Mr Jones is a Mechanical Engineer and is
currently the Executive General Manager Wafi-Golpu
(Newcrest-Harmony MMJV). He has held various senior management and
executive roles within the Newcrest Group, including General
Manager Projects, General Manager Cadia Valley Operations,
Executive General Manager Projects and Asset Management, Executive
General Manager Australian and Indonesian Operations, Executive
General Manager Australian Operations and Projects, and Executive
General Manager Cadia and Morobe Mining Joint Venture. Prior to
joining Newcrest, Mr Jones worked for Rio Tinto.
Cascabel, SolGold's 85% owned "World Class" ( Refer
www.solgold.com.au/cautionary-notice/ ) flagship copper--gold
porphyry project, is located in northern Ecuador on the
under--explored northern section of the richly endowed Andean
Copper Belt. SolGold owns 85% of Exploraciones Novomining S.A.
("ENSA") and approximately 8% of TSX--V--listed Cornerstone Capital
Resources ("Cornerstone"), which holds the remaining 15% of ENSA,
the Ecuadorian registered company which holds 100% of the Cascabel
concession. Subject to the terms of existing agreements,
Cornerstone is debt financed by SolGold for its share of costs to
completion of a Feasibility Study ("Financing Option").
In terms of repayment, SolGold shall receive 90% of
Cornerstone's share of earnings or dividends from ENSA or the
Tenement to which Cornerstone would otherwise be entitled until
such time as the amounts so received equal the aggregate amount of
expenditures incurred by SolGold that, but for the Financing
Option, would have been payable by Cornerstone, plus interest
thereon from the dates such expenditures were incurred at a rate
per annum equal to LIBOR plus 2 per cent until such time as SolGold
is fully reimbursed.
The investments by Newcrest for 14.54% of SolGold endorses
Ecuador as an exploration and mining destination, the management
team at SolGold, the dimension, size and scale of the growing
Alpala deposit, and the prospectivity of Cascabel and its multiple
targets. The gold endowment, location, infrastructure, logistics
are important competitive advantages offered by the project.
To date SolGold has completed geological mapping, soil sampling,
rock saw channel sampling, geochemical and spectral alteration
mapping over 25km(2) , along with an additional 9km(2) of Induced
Polarisation and 14km(2) Magnetotelluric "Orion" surveys over the
Alpala cluster and Aguinaga targets.
SolGold has completed over 44,500m of drilling and expended over
USD50M on the program, which includes corporate costs and
investments into Cornerstone. This has been accomplished with a
workforce of up to 176 Ecuadorean workers and geoscientists, and 6
expatriate Australian geoscientists. The results of 35 holes
drilled (including re-drilled holes) and assayed to date have
produced some of the greatest drill hole intercepts in porphyry
copper-gold exploration history, as indicated by Hole 12
(CSD-16-012) returning 1560m grading 0.59% copper and 0.54 g/t gold
including, 1044m grading 0.74% copper and 0.54 g/t gold.
The average grade of all metres drilled to date on the project
currently stands at 0.31% copper and 0.26 g/t gold. Intensive
diamond drilling is planned for the next 12 months with 10 drill
rigs expected to be operational by early 2018, targeting over
90,000m of drilling per annum.
Cascabel is characterised by fifteen (15) identified targets,
"World Class" drilling intersections over 1km in length at
potentially economic grades, and high copper and gold grades in
richer sections, as well as logistic advantages in location,
elevation, water supply, proximity to roads, port and power
services; and a progressive legislative approach to resource
development in Ecuador.
To date, SolGold has drill tested 4 of the 15 targets, being
Alpala Northwest, Alpala Central, Hematite Hill, and Alpala
Southeast. Currently drill testing of Alpala Northwest, Alpala
Central and Alpala Southeast targets is underway, with drill
testing of the other priority targets to be considered following
the publication of the Company's maiden resource estimate for
Alpala, and the finalisation of further IP surveying and modelling
work currently underway.
The Alpala deposit is open in multiple directions and the
mineralised corridor marked for drill testing of the greater Alpala
cluster occurs over a 2.2km strike length from Trivinio in the
northwest to Cristal in the southeast. The mineralised corridor is
known to be prospective over approximately 700m width.
High priority targets within the Alpala cluster, at Moran
approximately 700m to the north, and at Aguinaga approximately
2.3km north east, are closely modelled by 3D MVI magnetic
signatures that currently encompass over 10Bt of magnetic rock.
Based on a strong spatial and genetic relationship between copper
sulphides and magnetite, this body of magnetic rock is considered
to be highly prospective for significant copper and gold
mineralisation, and requires drill testing.
SolGold is focussing on extending the dimensions of the Alpala
deposit including Alpala Northwest, Hematite Hill, Alpala South
East, Cristal, Trivinio, Alpala West, Carmen and Alpala South
before completing a resource estimate and then drill testing the
other key targets within the Cascabel concession at Aguinaga,
Tandayama-America, Alpala West, Carmen, Alpala East, Moran,
Parambas, and Chinambicito.
The Company is currently planning further metallurgical testing
and completion of an independent Pre-Feasibility Study at Cascabel.
SolGold is investigating both high tonnage open cut and underground
block caving operations, as well as a high grade / low tonnage
initial underground development towards the economic development of
the copper gold deposit/s at Cascabel.
Drill hole intercepts have been updated to reflect current
commodity prices, using a data aggregation method, defined by
copper equivalent cut-off grades and reported with up to 10m
internal dilution, excluding bridging to a single sample. Copper
equivalent grades are calculated using a gold conversion factor of
0.63, determined using an updated copper price of USD3.00/pound and
an updated gold price of USD1300/ounce. True widths of down hole
intersections are estimated to be approximately 25-50%.
Following a comprehensive review of the geology and
prospectivity of Ecuador, SolGold and its subsidiaries have also
applied for additional exploration licences in Ecuador over a
number of promising porphyry copper gold targets throughout the
Country. Over 50 such concessions have been granted and announced
to date. SolGold is negotiating external funding options which will
provide the Company with the ability to have some of these projects
fully funded by a third party while focussing on Cascabel.
In Queensland, Australia the Company is evaluating the future
exploration plans for the Mt Perry, Rannes and Normanby projects,
with drill testing of the Normanby project planned for the coming
quarter. Joint venture agreements are being investigated for a
joint venture partner to commit funds and carry out exploration to
earn an interest in the tenements.
SolGold retains interests in its original theatre of operations,
Solomon Islands in the South West Pacific, where the 100% owned,
but as yet undrilled, Kuma prospect on the island of Guadalcanal
exhibits surface lithocap characteristics which are traditionally
indicative of a large metal rich copper gold intrusive porphyry
system. SolGold intends in the future to apply intellectual
property and experience developed in Ecuador to target additional
"World Class" copper gold porphyries at Kuma and other targets in
Ecuador and Argentina.
SolGold is based in Brisbane, Queensland, Australia. The Company
listed on London's AIM Market in 2006, and dual-listed onto the TSX
in July 2017 (both exchanges using the ticker code: SOLG) and
currently has on issue a total of 1,516,245,686 fully-paid ordinary
shares, 31,795,884 share options exercisable at 28p; 9,795,884
share options exercisable at 14p and 46,762,000 share options
exercisable at 60p.
CAUTIONARY NOTICE
News releases, presentations and public commentary made by
SolGold plc (the "Company") and its Officers may contain certain
statements and expressions of belief, expectation or opinion which
are forward looking statements, and which relate, inter alia, to
interpretations of exploration results to date and the Company's
proposed strategy, plans and objectives or to the expectations or
intentions of the Company's Directors. Such forward-looking and
interpretative statements involve known and unknown risks,
uncertainties and other important factors beyond the control of the
Company that could cause the actual performance or achievements of
the Company to be materially different from such interpretations
and forward-looking statements. Accordingly, the reader should not
rely on any interpretations or forward-looking statements; and save
as required by the exchange rules of TSX and LSE-AIM and LSE for
companies or by applicable laws, the Company does not accept any
obligation to disseminate any updates or revisions to such
interpretations or forward-looking statements. The Company may
reinterpret results to date as the status of its assets and
projects changes with time expenditure, metals prices and other
affecting circumstances.
The Company and its officers do not endorse, or reject or
otherwise comment on the conclusions, interpretations or views
expressed in press articles or third-party analysis, and where
possible aims to circulate all available material on its
website.
The Company recognises that the term "World Class" is subjective
and for the purpose of the Company's projects the Company considers
the drilling results at the growing Alpala Porphyry Copper Gold
Deposit at its Cascabel Project to represent intersections of a
"World Class" deposit on the basis of comparisons with other
drilling intersections from "World Class" deposits tabulated in
Table 1, some of which have become, or are becoming, producing
mines and on the basis of available independent opinions which may
be referenced to define the term "World Class" (or "Tier 1").
The Company considers that "World Class" deposits are rare, very
large, long life, low cost, and are responsible for approximately
half of total global metals production. "World Class" deposits are
generally accepted as deposits of a size and quality that create
multiple expansion opportunities, and have or are likely to
demonstrate robust economics that ensure development irrespective
of position within the global commodity cycles, or whether or not
the deposit has been fully drilled out, or a feasibility study
completed.
Standards drawn from industry experts (Singer and Menzie, 2010;
Schodde, 2006; Schodde and Hronsky, 2006; Singer, 1995; Laznicka,
2010) have characterised "World Class" deposits at prevailing
commodity prices. The relevant criteria for "World Class" deposits,
adjusted to current long run commodity prices, are considered to be
those holding or likely to hold more than 5 million tonnes of
copper and/or more than 6 million ounces of gold with a modelled
net present value of greater than USD 1 Billion.
The Company cautions that the Cascabel Project remains an early
exploration stage project at this time. Despite the relatively high
copper and gold grades over long intersections and broad areas, and
widespread surface mineralization discovered at the Cascabel
Project to date, much of which has still not yet been drill tested,
the Company has yet to prepare an initial mineral resource estimate
at the Cascabel Project and any development or mining potential for
the project remains speculative. There is inherent uncertainty
relating to any project at an exploration stage, prior to the
determination of a mineral resource estimate, preliminary economic
assessment, pre-feasibility study and/or feasibility study. There
is no certainty that future results will yield the results seen to
date or that the project will continue to be considered to contain
a "World Class" deposit. Accordingly, past exploration results may
not be predictive of future exploration results.
From the drilling results at the growing Alpala Porphyry Copper
Gold Deposit (only) within the Cascabel Project, the Company
considers the deposit to have significant resource potential and
the data gathered has provided the basis for the estimation of an
exploration target over the area drilled to date. Initial 3D
modelling and grade shell interpolants have outlined an approximate
exploration target at Alpala that ranges from 729Mt at 1.06% copper
equivalent, using a cut-off grade of 0.4% copper equivalent, to
969Mt at 0.92% copper equivalent, using a cut-off grade of 0.3%
copper equivalent. These estimates equate to an endowment of
between 7.7-8.9Mt of contained copper equivalent (Figure A).
Copper equivalent grades used are calculated using a gold
conversion factor of 0.63, determined using a copper price of USD
3.00/pound and a gold price of USD 1300/ounce. Drill hole
intercepts are calculated using a data aggregation method, defined
by copper equivalent cut-off grades and reported with up to 10m
internal dilution, excluding bridging to a single sample. True
widths of down hole intersections are estimated to be approximately
25-50%.
The Company cautions that the potential quantity and grade
ranges (exploration target) disclosed above for the Alpala Porphyry
Copper Gold Deposit within the Cascabel Project is conceptual in
nature, and there has been insufficient exploration to define a
mineral resource, and the Company is uncertain if further
exploration will result in the exploration target being delineated
within a mineral resource estimate.
On this basis, the reference to the Cascabel Project as "World
Class" (or "Tier 1") is considered to be appropriate. Examples of
global copper and gold discoveries since 2006 that are generally
considered to be "World Class" are summarised in Table 2.
References cited in the text:
1. Singer, D.A. and Menzie, W.D., 2010. Quantitative Mineral
Resource Assessments: An Integrated Approach. Oxford University
Press Inc.
2. Schodde, R., 2006. What do we mean by a world class deposit?
And why are they special. Presentation. AMEC Conference, Perth.
3. Schodde, R and Hronsky, J.M.A, 2006. The Role of World-Class
Mines in Wealth Creation. Special Publications of the Society of
Economic Geologists Volume 12.
4. Singer, D.A., 1995, World-class base and precious metal
deposits-a quantitative analysis: Economic Geology, v. 90, no.1, p.
88-104.
5. Laznicka, P., 2010. Giant Metallic Deposits: Future Sources
of Industrial Metal, Second Edition. Springer-Verlag
Heidelberg.
This information is provided by RNS
The company news service from the London Stock Exchange
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