Drilling Update

RNS Number : 9105N

Ovoca Gold PLC

21 June 2010

 

Ovoca Gold PLC

21 June 2010

Ovoca Gold plc ("Ovoca" or the "Company")

Olcha maiden gold resource of 344,000 ounces

Ovoca is pleased to announce its maiden JORC gold resource at the Olcha gold project of 344,000 ounces, located on the Rassoshinskaya license. The Rassoshinskaya license is in the North Eastern part of the Magadan Region, Russia.

This maiden resource has been generated from historic drilling and trenching data, which includes 16,455 meters of diamond drilling (144 holes ranging in depth from 14.3 metres to 336.8 metres, average 124m) and 12.3 kilometres of trenching. Not all of the historic data was used in generating the resource model mainly due to the lack of data points between various results. The 2010 drill program at Olcha is designed to in-fill these gaps in data points to potentially expand the resource.

Significant historical drilling and trenching results include:

Drilling

No.	Bore hole ID number	Target	Interval, m			Gold grade g/ton	Silver grade g/ton
			from	to	length
	C-47	Centralny, Zone 1	29.6	30.4	4.4	7.1	20.9
	C-63	Centralny, Zone 1	10.4	18.4	8.0	15.9	49.6
	C-85	Centralny, Zone 1	16.3	24.5	8.2	6.1	18.9
	C-88	Centralny, Zone 1	65.2	70.5	5.2	9.4	15.7
	C-121	Centralny, Zone 1	93.4	121.3	27.9	4.7	21.4
		including
			105.1	107.1	2.0	25.1	77.8
			114.6	118.6	4.0	6.9	43.5
	C-33	Centralny, Zone 2	152.0	157.5	5.5	8.4	20.0
	C-40	Centralny, Zone 2	38.8	40.3	1.5	35.2	103.1
	C-42	Centralny, Zone 2	51.5	53.0	1.5	24.6	54.5
	C-42	Centralny, Zone 2	151.2	153.8	2.6	8.0	14.6
	C-59	Centralny, Zone 2	106.6	108.0	1.4	7.9	10.0
	C-136	Centralny, Zone 2	180.1	181.0	0.9	15.4	97.8
	C-136	Centralny, Zone 2	203.6	204.6	1.0	14.0	TR

Trenching

No.	Trench ID number	Target	Width	Gold grade g/ton	Silver grade g/ton
	K-22	Centralny Zone 1	2.6	8.1	33.9
	K-67	Centralny Zone 1	7.5	17.3	38.5
	K-68	Centralny Zone 1	3.4	10.2	40.8
	K-105	Centralny Zone 1	10.5	6.5	16.0
	K-172	Centralny Zone 1	2.8	12.3	43.5
	K-102	Centralny Zone 2	1.3	42.0	75.2
	K-353	Centralny Zone 2	1.5	18.5	30.5
	K-355	Centralny Zone 2	3.5	14.3	16.8
	K-354	Centralny Zone 2	9.4	10.7	89.7
	K-370	Zond	9.2	45.6	102.5

The table below summarizes the inferred resource available at various cut off grades. The resources estimate was carried out by Mir Resources Ltd. an independent geological and resource consultancy based in UK, according to JORC guidelines:

	Inferred resource, gold, Olcha
Cut-off grade, Au	Ore, Mt	Au grade, g/t	Au oz
0.2 g/t	13.9	0.8	344,000
0.5 g/t	6.1	1.4	266,000
1.0 g/t	3.3	1.9	203,000
2.0 g/t	1.0	3.0	99,000

Geology

Olcha is a low sulphidation epithermal gold deposit. It is these types of gold deposits that have been the most successful in the Russian Far east in recent years. Kupol, Kubaka, Julietta are all examples of Russian low sulphidation epithermal gold/silver deposits.

The Olcha ore field, which includes the targets: Zond, Trigopunkt, Zone 1, Zone 2, occupies approximately 20 square kilometers. The ore bearing rock is mainly andesite and andesite-basalt breccias, which cover about a quarter of the total Olcha area. There are three extrusions at the Olcha ore field. Two of them which host Zone 1, Zone 2 and Trigopunkt are located in the central part of the ore field, while the third extrusion occupies the western flank of the area. Olcha is an extrusion-explosion geological formation saturated with major veins, which are linked erratically with vein-veinlets (stockworks) sub-zones controlled by fault structures. The central part of the Olcha ore field extends for more than 2500m in length, with width of up to 1000m.

Ownership

The Rassoshinskaya license is owned by ZAO Bulun, a wholly-owned subsidiary of Ovoca Gold. The license is an exploration license which can be extended upon successful petition to the appropriate Russian authorities. The license terms ends 13.02.2011.  Management believes it will be able to secure a license extension (typically three years).  Additionally, all or part of the license area can be converted into exploitation status (typical 25 term period) upon commercial discovery and petition.

Location

Rassoshinskaya is situated in the Northeastern part of the Magadan Region. The Olcha project is on the Southern part of the Rassoshinskaya license area. The site is approximately 700km from Magadan, the region's largest city, and 350km from Seimchan, the nearest airport and town.

Metallurgy

The metallurgical characteristics of the ore are amenable to conventional gravitation, flotation and direct cyanidation processing techniques, as previously mentioned in the circular dated 22 December 2009. Metal recoveries from initial test work reached over 97% for gold and 74% for silver.

Future Exploration

The deposit remains open along strike (existing strike length of approximately 3km) and at depth. Follow-up drilling is currently underway, with a program that envisions approximately 8,000m diamond drilling and 3.6km of trenching on Olcha in 2010. For the 2010 exploration season, to date 4,000m has already been drilled on site.

Tim McCutcheon, CEO, comments: "The JORC maiden resource for Olcha is a significant milestone for Ovoca as it advances the property. The initial field work at the site was started with the intention to find a bulk-tonnage open-pittable resource. As the geological data was analyzed during and after acquisition, our geologists have re-designed the goal behind the exploration effort to focus on a higher grade, underground resource. The historical data shows there are numerous high grade intervals in both trenches and drill holes. However, Ovoca needs to link and expand these results to demonstrate ore-body continuity plunging at depth. Our 2010 drill program is designed to do exactly that, and we hope to announce in short order the results of our work for this field season."

Notes to Editors

Ovoca Gold PLC ("Ovoca" or "the Company") is a mineral exploration and mine development company listed on the AIM market of the London Stock Exchange (Ticker: OVG) and on the IEX market of the Irish Stock Exchange (Ticker: OVX). The Company's principal activity is gold exploration in the Magadan Region of the Russian Federation. Previously Ovoca acquired, developed and sold to JSC Polymetal the Goltsovoye silver project located in the Magadan Region.  Currently, Ovoca is aggressively exploring and developing its 100 per cent owned Stakhanovsky, Rassoshinskaya and Nevsko-Pestrinskoye licenses.

Stakhanovsky is located approximately 40 kilometres north of Susuman, the second largest city in the Magadan region.  It is accessible by year-round road and there is power infrastructure on site. Internal preliminary estimates suggest a gold resource (non JORC code of Russian standard compliant) of over 700,000 ounces.  The Company intends to put Stakhanovsky into production by 2013.

Rassoshinskaya is in the North Eastern part of the Magadan Region about 200 kilometres from the town of Simchan. There is no nearby infrastructure. Rassoshinskaya hosts an epithermal gold deposit named Olcha, which is the focus of Ovoca's exploration program. Olcha and nearby satellite deposits have the potential to host a high grade multi-million ounce gold resource.

Nevsko-Pestrinskoye is located in the central part of the Magadan region near the town of Omsukchan. A year-round road and powerline are near the site. The license completely surrounds the Goltsovoye silver deposit, which was owned by the Company from 2006 - 2009 and sold to JSC Polymetal for US$47.7 million at the time of closing. Ovoca intends to investigate and explore known mineral occurrences that extend beyond the Goltsovoye license area onto Nevsko-Pestrinskoye.

Ovoca Gold Plc

Timothy McCutcheon [phone] [e-mail]

Davy

John Frain [phone]

Mr. Andrew W. Aitchison, MAusIMM, FGS, Ovoca Gold's Consulting Geologist, is acting as the Qualified Person in compliance with JORC reporting requirements with respect to this announcement. He has prepared and / or supervised the preparation of the scientific or technical information in this announcement and confirms compliance with JORC requirements. Mr Aitchison has over 20 years experience of gold and base metal mining and exploration in Australia, Turkey, Ghana, Russia and Kazakhstan. Experience includes operational and management roles at the Pajingo and Ovacik gold mines, as well as Manager Mineral Resources and Mine Planning for Goldfields in Ghana. Further details about the Olcha gold project are found in the following technical reports (i) SRK Consulting Technical Report, June 2009, (ii) SRK Consulting Field Review, September 2009 which can be found in the Ovoca circular to shareholders dated 22 December 2009 on our website www.ovocagold.com.

 

END

 

 

DRLEAKKPFFPEEFF