Resource Update

RNS Number : 9233J

Ovoca Gold PLC

07 July 2011

 



Ovoca Gold PLC

7 July 2011

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

Olcha resource model update

Highlights

§ Significant increase of Olcha resources

§ Total resource of 650,000 ounces gold and 3.59mn ounces silver

Ovoca today announces an updated mineral resource estimation prepared in accordance with the JORC Code for the Olcha Project, which includes exploration drilling data completed in 2010 and in Q1 2011 and is primarily focused on Zone 2 and the SE extension of Zone 1.

At a gold cut-off-grade of 1.0 g/t Olcha contains 9.2 Mt of Inferred Mineral Resources at an average gold grade of 2.20 g/t for a gold content of 650,000 ounces gold. Additionally the Inferred Mineral Resource includes an average silver grade of 12.12 g/t for a silver content of 3.59mn ounces silver. The updated mineral resource capped gold assays at 20 g/t Au and 80 g/t Ag.

This resource update includes 26,727 meters of diamond drilling (10,272 meters more than what was included in last year's maiden resource) as well as 12.3 kilometers of trenching.

The table below summarizes the inferred gold and silver 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:

Latest resource table

Inferred resource, gold, Olcha
Cut-off grade, Au	Tons, Mt	Au grade, g/t	Au oz	Ag grade, g/t	Ag oz
0.5 g/t	20.1	1.39	900,000	9.32	6,050,000
1.0 g/t	9.2	2.20	653,000	12.12	3,590,000
1.5 g/t	5.2	2.97	496,000	14.64	2,440,000
2.0 g/t	3.3	3.64	395,000	16.82	1,820,000

Geology

Olcha is a low sulphidation epithermal gold/silver deposit. It is these types of 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 15.02.2013.  Management believes it will be able to secure a conversion of the license status on Olcha from exploration to exploitation (in fact a new license, typically for a 25 year period) while also being able to extend the remaining part of the Rassoshinskaya exploration license (typically three years).  Note that on 7 December 2010 the company announced the successful petition to extend the term of the current license.

Location

Rassoshinskaya is situated in the northeastern part of the Magadan Region and covers an area of 2460 square kilometers. 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.

Tim McCutcheon, CEO, comments: "I am extremely pleased to announce the updated inferred resource report for Olcha, as it shows that our team is working hard to advance our projects, having significantly increased the inferred resource inventory at the site. Olcha is a complex deposit, with multiple fractures and faults within the ore body, which make exploration difficult.  However, given the current gold and silver price environment, the grade at Olcha points to high value per ton ore, and so a patient approach to exploration is required to flush out the geological resource. For 2011 Ovoca intends to complete the permitting process for an exploitation license, which requires us to file a Russian-standard resource statement and various other data (such as environmental, economic and metallurgical studies) with the appropriate state authorities. We hope to have this process completed by the end of the year. While we do this, Ovoca plans to conduct some geological work on Olcha to extend our knowledge of the target and prepare it for future exploration and development aimed initially at expanding the resource base. Our main work load in 2011 on Olcha will be geophysical data collection to the northeast and the east of known mineralization zones."

Appendix

Previous resource table (announced 21 June 2010)

Inferred resource, gold, Olcha
Cut-off grade, Au	Tons, 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

Drill result highlights (all previously announced)

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
C-168	Centralny, Zone 2	95.9	110.0	14.1	11.3	30.1
	including
		105.2	110.0	4.8	30.9	70.6
C-168	Centralny, Zone 2	168.6	171.6	4.0	5.4	37.0
	including
		169.6	170.6	1.0	15.2	110.4
C-169	Centralny, Zone 2	197.5	207.5	10.0	14.6	13.0
	including
		197.5	199.3	1.8	14.1	10.3
		204.8	206.5	1.7	44.5	40.8
C-190	Centralny, Zone 2	195.1	202.6	6.5	6.5	28.1
	including
		199.1	200.9	1.8	19.2	68.8
C-194	Centralny, Zone 2	144.7	146.7	2.0	10.4	29.5
C-195	Centralny, Zone 2	259.9	273.6	13.7	4.0	16.5
	including
		266.4	268.0	1.6	9.7	49.9
		270.8	271.6	0.8	13.6	20.8
C-201	Centralny, Zone 2	145.7	146.2	0.5	14.2	16.9
C-201	Centralny, Zone 2	177.9	178.9	1.0	4.5	11.9
C-202	Centralny, Zone 2	86.0	90.0	4.0	18.4	58.1
C-202A	Centralny, Zone 2	25.5	28.5	3.0	19.3	37.0
C-202A	Centralny, Zone 2	156.5	157.3	0.8	7.0	29.6
C-203	Centralny, Zone 2	85.8	86.5	0.7	8.0	25.6

The above information has been reviewed and verified by Mr. Andrew W. Aitchison for the purposes of the Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in March 2006. Mr. Aitchison, MAusIMM, FGS from the University of Newcastle, Australia, is Ovoca Gold's Consulting Geologist and he 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.

Ovoca has not completed a feasibility study in regards to the mineral resources presented herein and there is no certainty the project will be economically viable.

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 ESM 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. Stakhanovsky's initial independently established resource was announced in an RNS on 2 February 2011 and is available on the Company's website. 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 Seimchan. 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. Olcha's initial independently established resource was announced in an RNS on 22 June 2010 and is available on the Company's website.

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 - NOMAD and joint broker

John Frain [phone]

Fairfax I.S. PLC - joint broker

Ewan Leggat/Laura Littley [phone]

 

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