Exploration Update Migori

RNS Number : 0861M

Red Rock Resources plc

17 May 2010

 

RED ROCK RESOURCES PLC

Exploration Update: Sampling at Migori

Date: 18^th May 2010

Red Rock Resources plc ('Red Rock' or the 'Company') the mining exploration and mineral investment company with interests in steel feed, uranium, and gold, announces new sample results from its Migori gold project in Kenya.

Results have been received for: hand-grab samples collected from across the entire strike length of the Migori greenstone belt; samples from the December 2009/January 2010 reverse circulation ('RC') drilling programme; and the samples drilled at the tailings dam. Target commodities were precious and base metals.

The company aimed to test the hypothesis that gold and sulphides had become hydrothermally emplaced in BIFs (Banded Iron Formations), and subsequently leached from surface and concentrated at depth. Thus surface samples of the BIFs were taken and an RC rig employed to drill beneath them. Unfortunately the drilling was hindered by excess water due to the elevated water table; however samples obtained show the presence of abundant sulphides (pyrite and arsenopyrite) and suggest the effects of a supergene leaching process at play.

Targets and results are summarised as follows:

• Surface sampling of BIFs along the entire length of the Migori Belt. The porous nature of the BIFs, and low-moderate Au grades, demonstrate that they have been leached of gold and sulphides.
• Surface sampling of hydrothermal lode deposits, some currently worked by artisanal miners. Samples from these quartz lodes are highly auriferous with grades exceeding 50 g/t in one area.
• RC drilling directly under the leached BIFS. The presence of hydrothermal quartz at depth, and the abundance of sulphides, suggest emplacement following supergene leaching.
• Percussion drilling of the tailings dam. New gold grades are greater than 1 g/t in both the sulphides and the calcines. Silver grades exceed 16 g/t.

Hydrothermal lode, and BIF-hosted, gold mineralisation

A great number of the hydrothermal, lode deposits (quartz, 'reef' material), some of which are worked by the local artisanals, were sampled during the prospecting exercise. Samples of these hydrothermal lodes show some highly auriferous results: expanding the repertoire of valid, exploration targets; and confirming the extent of the gold endowment across the belt.

Much of the prospecting, however, has been focussed on evaluating the potential for BIF-hosted, gold mineralisation within the belt. BIF units occur along the entire strike of the belt; however they have never been investigated until now.

Surface BIF samples were collected from numerous targets across the belt. Results show low-moderate Au grades, confirming the hypothesis (detailed below) that gold has been leached from surface and potentially concentrated at depth. BIF-hosted gold is a well known exploration target in Archaean Greenstone Terranes (eg. Geita, Tanzania 14 Moz), and the company plan to advance their exploration strategy to fully explore the mineralisation processes at work.

In order to understand the significance of these results, they must first be contextualised in terms of: (1) the processes that have resulted in high-grade mineralisation in the Migori belt; and (2) the geological setting from which the samples were obtained.

Leaching

http://www.rns-pdf.londonstockexchange.com/rns/0861M_1-2010-5-17.pdf

There appear to be two important controls on the gold content of the samples: hydrothermal (the through-flow of heated fluid in rock units); and supergene (downward fluid flow resulting in leaching of surface rocks). The gold has originally been emplaced by hydrothermal processes, at all depths, but in many instances, later supergene leaching under the tropical weathering regime appears to have removed the bulk of the gold from the surface.

This supergene leach process appears particularly efficient in BIFs, leaching the gold to >50 metres depth, below the water table; whereas in hydrothermal lode quartz units, the gold may only be leached down to a few metres below surface. This proximity to the surface has resulted in easier access for artisanal activity to the high grade, quartz-hosted material; however the artisanals are restricted to working at depths above the water table only. This is evidenced by the limited artisanal activity in the eastern licence (where the water table is higher), and the lack of artisanal mining beneath the BIFs.

This is further endorsed by geochemical sampling programmes carried out in the area by AuVista during the mid 90's where it was found that to get any meaningful results they had to explore deeper than the lateritic hard-pan layer.

Hydrothermal Lodes

The analytical results from the hand-grab sampling show that material from the gold lodes from the artisanal workings (i.e. the hydrothermal, quartz, 'reef' material) can be relied on to give significant gold grade; up to >50 g/t Au in places (see section 'Carlos East'). The materials were sampled from: outcrops of hydrothermal quartz veins (no artisanal activity); within artisanal workings; or materials found on waste dumps beside the workings.

Significant quartz vein bodies have been identified at Mirema and Nyarongi; and quartz impregnated with Fe-Oxide has been found at Kaminitsa (all in the western licence SPL122). A highly auriferous, quartz vein has also been tested at Carlos East in the eastern licence (SPL202).

Banded Iron Formations (BIFs)

The target model being applied involves: the invasion of BIF units by the same hydrothermal fluids that formed the hydrothermal lodes; and supergene leaching of the gold, and associated sulphides (mainly pyrite), from the BIFs. The primary, unleached hydrothermal component of the mineralisation is preserved below the water table.

Across the full extent of the licenses the deformed BIFs sit 500 m to 1 km north of the lode gold mineralisation worked by the local artisanals. One sample from an artisanal working at Makuru west gave results of >22 g/t Au and was obtained from a structure whose trend heads directly underneath the Makuru Hill BIF, 750 metres to the north. This spatial proximity makes it almost inconceivable that the hydrothermal fluids that formed these lodes have not invaded the BIFs.

Folded, contorted, surface BIFs, cut by shearing, and with signs of a hydrothermal overprint, are the core focus of the regional prospecting activities. Fractured rock facilitates fluid flow; therefore, it is more likely that a hydrothermal fluid would percolate through a sheared BIF more easily than an undisturbed one. BIFs also tend to be chemical traps, creating a reducing (acidic) environment in which sulphides and gold are more likely to precipitate out of solution.

In the exploration of the BIFs across the licences, the only materials that are available for sampling are surface rocks, either in float or outcrop. All of the BIF samples are visibly leached, showing abundant porosity after pyrite. The porosity takes the form of cubic-shaped cavities leftover from the removal of pyrite crystals. Hydrothermal fluids would have first precipitated the pyrite (and other sulphides) and later supergene leaching would have then forced the pyrite into dissolution, carrying it away and leaving behind the cavities. This remnant porosity is in many cases indicative of a hydrothermal overprint.

The porous BIFs are being found with sub-g/t Au grades across large extents of the Migori greenstone belt. Prospects showing leached sulphides in surface BIF, with low grade gold have been identified at: Nyatworo in the far west of the licences; between the Mikei Camp and River Migori; Makuru hill; and Nyabisawa hill; all to the west of Migori town. To the east of the town, similar materials and grades have been identified at the Karutiange, Francis and Lake Bush BIFs.

Given what has been argued above about the downgrading effects of supergene leaching on surface samples, the presence of low grade gold in leached BIF is highly significant. In the current exploration phase, low-grade Au results may be a positive indication of gold endowment at depth, warranting advanced exploration. There is a strong case for following up these low gold grades in the Migori BIFs. Through using this mineralisation model, and seeing through the supergene leaching, it can be expected that economically significant, BIF-hosted, gold mineralisation is awaiting discovery on the Migori belt.

Hand-Grab Sample Results

Regional prospecting over the 60 km length of the Migori greenstone belt has confirmed the presence of artisanal gold workings on lode gold shows over the full length of the belt, with grades of over 50 g/t showing up in samples from these workings. These results serve to indicate the tenor of gold endowment on the belt, and it can be fairly confidently predicted that the established resources previously reported from some of the better explored lodes can be significantly supplemented by further drilling of additional lode targets.

The regional work also indicates significant potential for BIF-hosted gold; a target type that has gone virtually unrecognised to-date on the Kansai licenses, and has received no exploration attention. The prize in exploring for this type of mineralisation is exemplified by Geita (14M oz) in similar Archean geology in Tanzania. Approximately 200 surface rock samples have been collected across the extent of the Migori greenstone belt over the previous six months, as part of a rigorous, prospecting programme to assess and determine prime exploration targets.

http://www.rns-pdf.londonstockexchange.com/rns/0861M_-2010-5-17.pdf

Western Licence (SPL122)

Samples were collected from six principal localities across SPL122:

                                                           Makuru (BIF)
                                                           Nyatworo (BIF)
                                                           Along the track between Mikei and the River Migori (BIF)
                                                           Mirema (H. Qtz - replaced BIF)
                                                           Nyarongi (H. Qtz)
                                                           Kaminitsa (Fe-Oxide Qtz)

Makuru

The BIFs on Makuru and Nyabisawa Hills (the latter located in the eastern licence - results below, under the section 'Nyabisawa') are intensely sheared. The porosity observed in these BIFs is due to supergene leaching of formational, and hydrothermal, pyrite. That some of the pyrite is hydrothermal in origin was proven correct by drill-hole NYA01 at Nyabisawa, where both formational and hydrothermal quartz material was observed in the RC drill chips: the former at 65-76 m depth; the latter at 77-78 m depth.

Samples were collected from the following two areas at Makuru:

Makuru West: the BIF material here is completely leached, and is positioned above the water table. Results support this with low gold grades (below 0.20 g/t). This locality is most likely to be sitting in the zone of gold depletion between the hard-pan lateritic layer and the water-table. The hydrothermal quartz body in the artisanal working 750 m south of the BIF on Makuru Hill extends towards the hill and projects beneath the BIF. It is therefore highly likely that the BIF has undergone hydrothermal invasion. One sample taken from this working gave a peak measured grade of 22.50 g/t Au.

Makuru North: Pyrite crystals leached leaving behind cavities and iron hydroxides. Lateritic hard-pan developed at surface, but eroded from the specific areas sampled. BIF is situated well above the water-table and within the zone of gold depletion above the water-table. Again, results show low gold grades due to the supergene leaching effect.

Nyatworo

Exposure is extremely poor over this area, therefore exploration drilling is recommended to test for evidence of unleached, hydrothermal minerals in this BIF. Only one BIF sample was tested from this locality and showed low Au grades suggesting the leached nature of the locality.

River Migori - Mikei Traverse

This traverse is ideal for observing the various hydrothermal features found across the extent of the Migori greenstone belt. The traverse exposed many of the features observed from prospecting across the extent of the Migori greenstone belt in microcosm: 'artisanal-type' quartz; undisturbed (layered) BIF; structurally and hydrothermally reworked BIF; and the highly porous Nyabisawa-/Makuru-type BIFs.

Twenty-seven samples were collected along a N-S traverse where a track leading from the River Migori to near Mikei village cuts across multiple BIF occurrences. All the samples were of surface outcrops or loose blocks, except one which was from a shallow artisanal working showing a peak measured grade of 11.90 g/t Au. The rest of the samples are barren showing that that even the reef material is leached in surface outcrops and reports no gold. The same material sampled from slightly deeper (in the working) is auriferous. Results from surface sampling are therefore underestimating the potential. Any gold seen in a surface sample is worth further exploration by trenching/shallow drilling; recommended for this prospect.

Mirema

Trenching and explosives have exposed the main zone of the mineralised structure at Mirema; currently in the process of being sampled. Initial grab samples from the first trench completed returned >3 g/t Au. The trenching program has uncovered >10 m width of probable hydrothermally replaced BIF adjacent to a row of shafts of unknown heritage.

Early prospecting at this locality was motivated by the success the local artisanals were having exploiting alluvial gold in the main stream-course cutting the prospect. A detailed search was mounted for the bedrock source of this alluvial gold. Fragments of highly leached vein quartz, and leached BIF material showing hydrothermal textures, were traced back to a prominent boulder-field. Gold grades in some of the float materials were low but 8 samples presented values between 0.74-4.30 g/t Au.

Nyarongi

During the mid-90s, Auvista identified significant soil anomalism at Nyarongi. Prospecting was conducted over the extent of the area in order to investigate the source of the gold and arsenic causing the anomaly.

The most intense part of the anomaly is located directly downhill of the main artisanal workings immediately to the north of the main Macalder-Migori road. The anomaly weakens in a downhill, broadly southerly direction and encompasses the smaller artisanal workings to the south. This anomaly is derived from down-topographic dispersion from the main workings beside the road. Samples were taken from these workings and assayed for Au.

Further artisanal workings indicate potential for the presence of multiple, parallel, relatively closely spaced, narrow reefs. A shallow drill-hole underneath the main artisanal workings is merited.

Outcropping vein material was sampled from a road-side ditch beside the artisanal workings. Four out of seven samples gave highly auriferous gold grades between 0.58-10 g/t. These exposed veins and the artisanal workings indicate an auriferous vein cluster meriting trenching and shallow drilling to test the potential for bulk, mineable mineralisation.

Kaminitsa

On the far eastern periphery of the Nyarongi soil anomaly, prospecting located white quartz fragments and boulders: strongly impregnated with Fe-oxide, and ranging between 5 cm and 40 cm across.

The quartz was determined to be hydrothermal in origin due to the presence of drusy and vuggy textures (both indicative of hydrothermal activity). Cubic pseudomorphs after very fine pyrite were also observed. In outcrop, the quartz is a discontinuous pod hosted in phyllite rock; 40 cm long by 25 cm wide; and parallel to the 60 degree trend of the foliation in the phyllites.

As previously announced, good mineralisation was uncovered at this prospect. Eleven samples were taken, five of which contained measured grades of >1 g/t gold, to a maximum of 15.6 g/t.  These surface samples comprise what appears to be primary hydrothermal iron oxide and quartz. This mineral assemblage would be far less prone to supergene leaching than the more typical sulphidic materials, and would therefore explain why these surface samples have retained their gold content, despite the tropical weathering they have endured.

Eastern Licence (SPL202)

Samples were collected from seven principal localities across SPL202:

                                                           Francis (BIF)
                                                           Karutiange (BIF)
                                                           Lake Bush (BIF)
                                                           Nyabisawa (BIF)
                                                           Kihancha (Graphitic Schists)
                                                           Mwiro (Graphitic Schists)
                                                           Carlos East (H. Qtz)

Francis, Karutiange, Lake Bush

The sample results from these three, BIF-related prospects have been announced previously.  Samples from Karutiange and Lake Bush gave maximum measured grades of 0.76 g/t Au and 0.48 g/t Au respectively. Placed in context of the BIF-hosted mineralisation model, these low grades, and the pyrite pseudomorphs present on outcrop, support the idea that the BIFs have been leached of sulphides and gold. Up to 0.76 g/t was measured showing that if this level of grade is present at surface, then great concentrations can be predicted to exist at depth.

From the Francis prospect, 2 out of 3 hand-grab samples show mineralisation at measured grades of 5.57 g/t Au in one sample and 44-46.3 g/t Au in the other. These samples contained milky white quartz associated with abundant fresh, and partially oxidised, pyrite and were obtained from a waste dump from colonial era mining of a lode structure.

Nyabisawa 

The type of BIF observed at Nyabisawa is the same style as the BIF at Makuru (see section 'Makuru' - above). The BIF here forms a hill just north of Nyabisawa village and is situated well above the water-table. The lateritic hard-pan is developed on the lowest slopes, but is eroded from much of the hill.

Samples were taken from where it has been eroded at Nyabisawa West, and at higher elevations at Nyabisawa North. These samples were totally leached, evidenced by the abundant porosity only with no preserved iron oxides. Traces (to 0.90 g/t Au) of gold in these totally leached materials, and samples showing >2 g/t Au from artisanal workings within or adjacent to the BIF, indicate potential which needs to be explored by drilling beneath the leached zone.

One of the prominent leached outcrops was drilled using RC (results discussed below). Beneath the water-table, in the unleached zone, large quantities of pyrite were seen proving that the porous outcrops seen across the license indicate leaching of highly pyritic rock. Visual indications of vuggy hydrothermal quartz textures were also seen, indicating hydrothermal interaction with the BIF.

Kihancha

The Kihancha 5 structure is situated in the far east of the licences. The mineralisation here has been identified in graphitic schists rather than in BIFs. Graphitic host rocks are similar to BIF host rocks as they provide a chemical trap; a reducing environment encouraging the generation of more sulphidic mineralisation and gold precipitation from hydrothermal fluids. It may not be amenable to exploitation by the artisanals (gold being in sulphides rather than free, so not extractable by gravity processing) but may be amenable to more modern mining/processing methods.

The artisanal workings are of small scale, and only a further 100 m of currently inaccessible (flooded) underground development is indicated by the locals. It may well be that they could not work this sulphidic material effectively and that the bulk of it has been left in the ground. The mineralisation could be of significant, as yet unseen, scale; the graphitic host rock is a very effective hydrothermal gold precipitation medium and may form mineralization of significant scale as opposed to the normal narrow, discontinuous artisanal reef scenario.

There may be a number of lessons in this prospect, applicable license-wide:

(1) Graphitic host rocks could produce more sulphidic ores which the locals can't exploit, and could therefore add some scale to the mineralization;

(2) The presence of abundant reef blocks lying around may be indicative of the problems that artisanals have faced in extracting the gold and so they tend to throw the reef to the side;

(3) The shallow water-table in the eastern parts of the licenses has prevented the deep supergene leaching seen in the western areas, resulting in more sulphidic materials being visible at surface.

The samples are nearly all richly auriferous and some of the most sulphidic material found on the Migori belt. The interpretation here is that graphitic host rocks have encouraged the precipitation of sulphides from hydrothermal fluids, and that a permanently near-surface water-table has prevented the formation of an upper zone of gold depletion.

Kihancha is highly worthy of renewed additional attention. Shallow reconnaissance drilling (to 50 m depth) is merited to test the width of the structure, the sulphide content, and the degree to which the artisanals have left the mineralization in-place. It may be worth exposing the structure better in trenches and understanding its geometry via a good structural study, prior to drilling.

Mwiro (previously Carlos Far West)

The Mwiro samples were taken from outcrops and float in an old overgrown working. The main host to the quartz veins is a highly weathered, ferruginous, intensely sheared phyllitic rock from which gold can easily be panned. Auriferous samples showed moderate grades between 0.55-1.26 g/t Au suggesting some degree of leaching. These grades were examined at depth using RC drilling earlier in this year (see next section).

Carlos East

Samples are from a strike-persistent lode; the continuation of the Mwiro structure described above. Samples were taken from artisanal workings, indicative of a well-mineralised lode structure, worthy of drilling. Of six samples, four were highly auriferous grading between 9.80-54.75 g/t Au. Potential exists here to supplement the established gold resources on the western license.

RC drilling - sample results

A total of 507 metres of core were drilled using the RC method. Eleven holes were drilled over four targets across both licence areas: SPL122 and SPL202. In the western licence (SPL122) four holes were drilled at the Macalder gossan and two at Gori Maria; and in the eastern licence (SPL202), four holes were drilled at Carlos Far West (Mwiro) and one at Nyabisawa. The Eastern licence, to date, has been relatively underexplored compared to the western licence, where previous companies have rigorously drilled and sampled, and even mined in some areas.

Macalder Gossan

Only one of the four holes drilled at the gossan intersected a mineralised interval: 7 metres at 0.95 g/t Au (at 16-23 metres depth with peak measured grade of 2.33 g/t Au). However, at this depth, it is more likely that this mineralised interval is in the sulphide zone rather than the gossan itself.

The RC drilling of all of the holes at the gossan only reached a maximum of 20 to 25 metres (at 60 degrees angle). Progress was hindered largely due to drill penetration issues from the influx of groundwater, and the presence of cavities where the gossan had already been mined out. Previous diamond drilling by Kansai, in 2007, reached depths of greater than 100 metres in many cases, enabling the gossan to be sampled deeper below surface. Those results were extremely encouraging, indicating the presence of significantly high grade mineralisation (peak measured grade of 42.00 g/t Au at 66-67 metres depth).

Over the last month, 35 samples have been taken over the full strike of the Macalder gossan. Due to the issues of drill penetration, as already outlined, this was deemed to be the most practical and direct method of obtaining samples underground. The body was accessed through the established, artisanal workings. The samples give reasonable strike coverage of the body and are expected to offer further indication of the grade of the gossan. There may be significant grade variation in the vertical direction, which will not be covered by these samples; however, without actually drilling the body, direct sampling is the only viable alternative. Ten additional samples have been taken for mineralogical analysis and will be assessed in London to determine adequate processing techniques.

Gori Maria

Sample results from the Gori Maria holes come as further indication of the long columns of mineralisation at this target. Mineralisation in one hole extended over 24 metres at 1.29 g/t Au (between 10-34 metres depth with peak measured grade of 5.14 g/t Au at 21-22 metres); and 9 metres at 1.38 g/t Au in the second hole (24-33 metres depth with peak measured grade of 7.29 g/t Au at 31-32 metres). The results from this hole will be combined with those from Kansai's diamond drilling programme, in order to supplement the NI 43-101 indicated resource estimate at this prospect.

Nyabisawa and Mwiro (Carlos Far West)

Drilling at the Nyabisawa prospect did not intersect the mineralised interval; however a rigorous trenching programme and further drilling are anticipated in order to delineate the exact nature and distribution of the mineralised structure. Vuggy quartz was observed during the logging of the RC chips from the Nyabisawa hole, indicating the former passage of hydrothermal fluids below the leached BIFs at Nyabisawa. Influx of groundwater at this prospect inhibited drilling to greater depths, due to the raised level of the water table (this also being the reason for the lack of previous exploration and artisanal activity in the eastern licence).

Results from one hole drilled at Mwiro showed one mineralised section: 6 metres at 0.90 g/t Au (12-18 metres depth with 1m at 3.90 g/t Au at 14-15 metres) however as for Nyabisawa, further exploration is planned in order to intersect the high-grade, mineralised interval at depth.

Tailings - Au and Ag assay results 

The results in the below table are from the samples drilled during the December 2009/January 2010 percussion drilling programme. The tailings dam is divided into two main zones (sulphides and calcines) due to the different processes used to process the ore during the colonial era mining at the Macalder Mine.

During the recent drilling programme, 38 holes (including 6 infill holes) were drilled across the entire tailings dam on a 50 m by 50 m grid*. Drilling totalled approximately 458 m with 191 m drilled in the sulphides and 156 m in the calcines. The results were analysed by fire assay for gold and silver grades at the laboratory in Mwanza.

	Au (g/t)	Ag (g/t)
Sulphide 191 samples	1.56	>16.78
Calcine 156 samples	1.85	>20

Results from Au fire assay analysis of the tailings dam (weighted averages)

For the silver results, only the lower boundaries can be stated. This is because the Ag grade exceeded the detection limit and so the exact averages cannot be calculated. To determine the exact grade, a second analysis will be required with a higher detection limit.

Determination of the tailings resource is currently underway. Over the last month, a survey of the surfaces of the tailings dam has been conducted in order to define its volume and tonnage. Coupled with the new Au and base metal results, a resource calculation for will soon be available.

Sixty-three new samples have been taken of the tailings walls as this material was not covered in the sampling achieved by the drilling. These samples have been despatched to Mwanza for analysis. A bulk sample has been composited of this material, to be added to the metallurgical samples to be sent to Perth.

Acid drainage test-work on the tailings material is continuing in the background. Twenty-five samples have been sent for ABA test-work in ALS Vancouver. On-site leach-pad test-work has been initiated to understand the weathering characteristics of the different materials with a view to minimising environmental impact during reprocessing and to design environmentally sound, long-term, re-disposal methodologies.

The export permit for the bulk composites has just been received and the samples will be shipped within the next few days.

*Previous announcements incorrectly stated as 25 m by 25 m grid.

The technical information in this announcement has been prepared by Kamini Manick, MESci, and approved for release by Helen Salmon, BSc, FGS, who is a qualified person as defined in the Note for Mining and Oil & Gas Companies, June 2009, of the London Stock Exchange.

For further information contact:

Andrew Bell	0207 402 4580    or 07766 474849	Red Rock Resources plc	Chairman
Peter Trevelyan-Clark/Ben Jeynes	020 7444 0800	Religare Capital Markets	Nominated Adviser
Nick Emerson	01483 413500	Simple Investments Ltd	Broker
Ron Marshman	020 7011 9411	City of London PR	Public Relations

Updates on the Company's activities are regularly posted on its website www.rrrplc.com.

 

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