EXPLORATION UPDATE- AUCH PROJ

RNS Number : 7927Z

Scotgold Resources Ltd

20 January 2011

 



Scotgold Resources Limited ("Scotgold" or the "Company")

EXPLORATION UPDATE- AUCH PROJECT AREA

High grade vein systems at Auch

·     Creag Sheileach

o Outcrop 13.2g/t Au, 36.6g/t Ag

o AQ drill hole 25.5g/t Au 14.3g/t Ag over 1.0m

·     Coire Ghabhalach

o Outcrop 23.4g/t Au, 29.6g/t Ag

o AQ drill hole 15.2g/t Au, 36.2g/t Ag over 2.1m

·     Clach Bhadach

o Outcrop 62.4g/t Au, >200g/t Ag

o Outcrop 20.7g/t Au, 164.7g/t Ag

·     Beinn Odhar

o Outcrop 9.8g/t Au 80.4g/t Ag

o Outcrop 8.9g/t Au, >200g/t Ag, 47.1g/t Te

·     Leitir Tharsuinn

o Vein traced for 640m, awaiting assays

Breccia Pipe identified

·     Breccia pipe identified - highly anomalous gold value recorded - 1.7g/t Au

·     Ground based magnetic anomaly over pipe area

Scotgold Resources Limited ("Scotgold" or the "Company") (ASX: SGZ) is pleased to provide an update of exploration results over the Auch Project area.

Small diameter (AQ) holes drilled into two vein structures at Auch have returned encouraging gold and silver values, including:

·     Coire Ghabhalach - 2.1 metres averaging 15.2g/t gold, 36.1g/t silver

·     Creag Sheileach - 1.0 metres averaging 25.5g/t gold and 14.3g/t silver

Recent follow up outcrop rockchip sampling from vein systems located by fieldwork continue to return high grade gold and silver over significant strike lengths including:

·     Coire Ghabhalach - 23.4g/t gold, 29.6g/t silver

·     Creag Sheileach - 13.2g/t gold, 36.6g/t silver (previously reported)

·     Clach Bhadach - 62.4g/t gold, >200g/t silver

·     Beinn Odhar - Beinn Odhar vein - 2.5g/t gold, 8.5 g/t silver (4% Arsenic)

·     Beinn Odhar - Coire Thon vein - 9.8g/t gold, 80.4g/t silver

·     Beinn Odhar - Coire Thon vein - 8.9g/t gold, >200g/t silver, 47 g/t tellurium

Recent fieldwork has also identified a breccia pipe in the Auch project area which returned a single highly anomalous gold value. A ground based magnetic survey over the mapped pipe structure was conducted by Aurum Exploration Services. The survey identified two significant magnetic anomalies coincident or close to mapped pipe structures which warrant further follow up.

Scotgold's Chief Executive Officer, Chris Sangster said, "The results continue to highlight the high prospectivity of Scotgold's extensive land position outside the Loch Lomond and Trossachs National Park. The styles of mineralisation encountered at Auch closely resemble those found at Cononish"

Further detailed field mapping, rock chip sampling, ground based geophysics and an expanded AQ drill program is planned for the Auch project area in 2011.

Background

The Auch Project Area is situated 10km north east of the Cononish Gold and Silver Project and lies outside the boundaries of the Loch Lomond and Trossachs National Park (refer to Figure 1 available at www.scotgoldresources.com under ASX releases).

Previous explorers had identified a number of high grade boulders and outcrops at four locations  (Coire Ghabhalach, Creag Sheileach, Beinn Odhar and Crom Allt) within the project area (see ASX release 20^th July 2009 : Exceptionally high gold grades found in Scotland) which warranted further follow up, though at the time, no further work was conducted.

After an initial follow up verification sampling program conducted in 2009, Scotgold has conducted further field reconnaissance mapping and follow-up outcrop sampling on these prospects.

During this program, three new prospects have been identified at Clach Bhadach, Leitir Tharsuinn and the Auch Breccia pipe.

A number of short AQ diamond drill holes were completed into two of the prospects and a ground based magnetic survey was conducted over the Auch Breccia pipe.

Selected values from the program for the various prospects are shown in Figure 2 (available at www.scotgoldresources.com under ASX releases) and in Appendix A.

Creag Sheileach

Initial confirmatory rockchip sampling in 2009 on this vein system returned grades of up to 13.2g/t Au and 38.6g/t Ag. The prospect comprises a number of inter-related quartz vein structures and have been traced for 750 metres on surface though outcrop is somewhat limited.

Two diamond saw channel samples have been taken across the vein with best intervals returning 1.6g/t Au, 1.7g/t Ag and 6.39g/t Au, 6.4g/t Ag, both over 1 metre.

Three AQ diamond drill holes were drilled into the structure with results below:

Hole Number	From	To	Length (m)	Au g/t	Ag g/t
AAQ02	0.0	1.0	1.0	25.5	14.3
AAQ01	0	0.5	0.5	2.1	2.47
AAQ03	0.5 3.5	1.0 4.3	0.5 0.53	2.5 2.6	1.2 6.4

Drill statistics are included in Appendix 2.

Two hand dug trenches were completed on the western end of the structure with the best interval returning 4.2g/t Au and 9.8g/t Ag over 1 metre.

Six further AQ holes have been planned to continue evaluation of the structures.

Coire Ghabhalach

Follow up rockchip sampling in 2010 on this fractured vein system included grades of 23.4g/t Au and 29.6g/t Ag and 18.3g/t Au and 39.2g/t Ag

Seven AQ diamond drill holes were drilled into the structure with the best results as follows:

Hole No.	From	To	Length (m)	Au g/t	Ag g/t	Comment
CGAQ04	5.50	7.60	2.10	15.2	36.1	Quartz vein
CGAQ01	0.30 1.50 6.65	0.45 1.65 7.50	0.15 0.15 0.85	4.28 3.40 2.80	1.17 7.38 3.74	Quartz vein Pelite with quartz vein Pelite with quartz vein

Drill statistics are included in Appendix 2

The vein system is traced on surface for 150 metres before disappearing under glacial till. Further follow up work is planned for 2011.

Clach Bhadach

Boulders located by previous exploration returned a peak value of 136g/t Au and 26.2g/t Ag though no further work was conducted to locate the source of the boulder field. Recent prospecting has traced the source of the boulders to a sulphide rich quartz vein exposed high up the hill. Rockchip sampling of the outcrop has returned values including 62.4g/t Au and >200g/t Ag, 20.7g/t Au and 164g/t Ag and 16.4g/t Au and >200g/t Ag.

Further prospecting, trenching and AQ drilling is planned for 2011.

Beinn Odhar

Coire Thon Vein System. Following up an outcrop identified by previous explorers returning 13.8g/t Au and 89.3g/t Ag, initial reconnaissance sampling (2009) returned values of 3.4g/t Au and 18.2g/t Ag. Further detailed mapping and sampling has identified a series of veins with peak values of 9.8g/t Au and 80.4g/t Ag and 8.9g/t Au, >200g/t Ag and 47g/t Te.

The vein system has been traced for 600m on surface and will be followed up in 2011 with further prospecting, trenching and AQ drilling.

Beinn Odhar Vein. Follow up of outcrop identified by previous explorers of 13.8g/t Au and 89.3g/t Ag. Initial reconnaissance sampling returned values of 2.1g/t Au, 13.4g/t Ag (and 0.5% As).

Further prospecting to determine the extent of the vein is planned for 2011.

Leitir Tharsuinn

Alluvial gold grain characterization in Allt Coralan identified different gold populations above and below the Tyndrum fault which transects this area. Prospecting to locate the source of the upper population has resulted in the discovery of a brecciated dark grey quartz vein which has been traced for 650m along strike. Initial samples have been submitted for assay.

Auch Breccia Pipe

Scotgold recently accessed a PhD thesis, completed in 1970, on the structural geology of the Auch Estate which noted three 'breccia' type occurrences. Reconnaissance of two of the reported breccias indicated the occurrences to be porphyritic microgranites, possibly associated with the gold mineralizing event.

On investigation, the third represents a large explosion breccia, possibly similar to the mineralized pipes encountered at Beinn Udlaidh. This occurrence appears to consist of two rounded pipe like breccias approximately 10,000m² in extent, and occur in close association with lamprophyre.

Thirty two rockchip samples were taken across the exposed extremities of the breccia and a single sample returned a highly anomalous gold value of 1.7g/t Au.

Aurum Exploration Services conducted a ground based magnetic and EM survey over the breccia and towards a large regional silicified fault zone to the east. Results from the survey are shown in figure 3.

The results clearly indicate two strong magnetic anomalies coincident with the shape of the mapped breccia pipes.

A series of AQ drill holes are planned in 2011 to further test possible mineralization in the pipe structure.

Chris Sangster

Managing Director

For further information please contact:

United Kingdom:

Scotgold Resources Limited	Westhouse Securities Limited	Bankside Consultants
John Bentley (Chairman) Chris Sangster (CEO)	Richard Baty / Petre Norton	Simon Rothschild /Louise Mason
Tel: [phone]	Tel: [phone]	Tel [phone]

Australia:

Scotgold Resources Limited	Professional Public Relations
Shane Sadleir (Non-Executive Director)	Karen Oswald
Tel:        [phone] Mobile: [phone]	Tel:        [phone] Mobile: [phone]

Competent Person's Statement:

The information in this report that relates to Exploration Results is based on information compiled by Mr David Catterall. Pr Sci Nat, who is a member of the South African Council for Natural Scientific Professions. Mr Catterall is employed as a consultant to Scotgold Resources Ltd. Mr Catterall has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Catterall consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Forward Looking Statements:

This release includes certain "forward looking statements." All statements, other than statements of historical fact, are forward looking statements that involve various risks and uncertainties.

There can be no assurances that such statements will prove accurate and actual results and future events could differ materially from those anticipated in such statements.

Appendix A: Selected recent rock chip results from Auch Project Area

Location	Type	Sample	Easting	Northing	Au g/t	Ag ppm	As ppm	Pb ppm	Zn ppm
Coire Ghabhalach	Outcrop	CG01	232921	739786	23.4	29.6	21708	12219	62327
Coire Ghabhalach	Outcrop	CG13	232756	739771	18.3	39.2	1339	>20000	40943
Coire Ghabhalach	Outcrop	CG05	232839	739794	15.9	34.7	9501	2159	7195
Coire Ghabhalach	Outcrop	CG04	232889	739789	4.4	4.0	395	1213	2571
Coire Ghabhalach	Outcrop	CG02	232921	739786	3.9	29.6	6592	>20000	268
Coire Ghabhalach	Outcrop	CG12	232750	739796	3.1	14.1	2338	4162	18185
Coire Ghabhalach	Outcrop	CG03	232904	739785	1.4	15.4	1706	9437	5288
Clach Bhadach	Outcrop	CB04-02	234510	736955	62.4	>200	1303	1581	705
Clach Bhadach	Outcrop	AK04	234524	736965	20.7	164.7	907	675	161
Clach Bhadach	Outcrop	CB04-03	234510	736955	16.4	>200	453	325	693
Beinn Odhar	Outcrop	BO10	234005	733407	3.4	18.2	610	124	66
Beinn Odhar	Outcrop	BO4	233724	733889	2.1	13.4	5117	246	19
Breccia Pipe	Outcrop	ABP24	233940	735096	1.7	1.1	284	94	560
Coire Thon	Outcrop	CA16	233991	733367	9.8	80.4	375	>20000	65885
Coire Thon	Outcrop	CA05	234007	733400	8.9	>200	314	13485	2478
Coire Thon	Outcrop	CA04	234007	733400	2.0	10.4	567	359	133
Coire Thon	Outcrop	CA03	234007	733400	1.1	8.2	395	165	67

Appendix B: Drill statistics

Hole ID	Area	Easting	Northing	Depth(m)	Elevation(m)	Azimuth	Inclination
AAQ01	Creag Sheileach	234747	738765	13.5	408	325	-45°
AAQ02	Creag Sheileach	234784	738791	11.9	391	316	-45°
AAQ03	Creag Sheileach	234781	738789	7.7	391	330	-45°
CGAQ01	Coire Ghabhalach	232922	739786	7.5	657	004	-40°
CGAQ02	Coire Ghabhalach	232890	739788	9.8	666	320	-40°
CGAQ03	Coire Ghabhalach	232843	739795	2.5	669	330	-40°
CGAQ04	Coire Ghabhalach	232843	739795	10.5	671	330	-50°
CGAQ05	Coire Ghabhalach	232843	739795	7	671	304	-45°
CGAQ06	Coire Ghabhalach	232850	739790	2.4	684	335	-46°
CGAQ07	Coire Ghabhalach	232843	739795	9	671	304	-45°

 

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