Cascabel Exploration Update

RNS Number : 3324V

SolGold PLC

27 October 2014

 



27 October, 2014

SolGold plc

("SolGold" or the "Company")

Cascabel Exploration Update

Visible Copper Sulphides Intersected in Hole 8

IP Survey Generates Multiple Targets

The Board of SolGold (AIM code: SOLG) is pleased to provide the following exploration update for the Company's Cascabel copper-gold porphyry project in Ecuador.

HIGHLIGHTS:

Ø Drill hole 8 ("Hole 8") was completed at 1310.45m;

Ø Hole 8 intersected visible copper sulphides from 367.10m to 680.80m and from 902.78m to 1310.45m, a collective length of over 720m;

Ø Hole 9 expected to commence in November;

Ø Orion IP survey completed at both Alpala and Aguinaga;

Ø Final processing of Orion 3D "Deep Earth Imaging" IP geophysical data near completion;

Ø Geological model for porphyry copper-gold mineralisation further refined. Expert consultants maintain high prospectivity for both large open pit and underground targets at Alpala;

Ø Expert consultant to be engaged to manage metallurgical testwork;

Ø Rio Cachaco soil sampling program ongoing.

Commenting on today's update, SolGold CEO and Managing Director, Alan Martin said:

"We are encouraged by the visual results from Hole 8 which indicate the widespread nature of the mineralisation at Alpala.  Our refined geological model and the Orion IP results have reinforced our view that significant targets exist at Central Alpala, North West Alpala and South East Alpala.  Other targets have also been identified.  This work suggests that the mineralisation encountered in Holes 5, 7 and 8 is only a small part of the broader Alpala target complex.  In fact, the drilling to-date only covers approximately 10-20% of the area from North West Alpala to South East Alpala.  We also look forward to the results of the interpretation of the IP data at Aguinaga."

References to figures and /or tables relate to the version of this release on the Company's website (www.solgold.com.au) or visible in PDF format by clicking the link below:

http://www.rns-pdf.londonstockexchange.com/rns/3324V_3-2014-10-27.pdf 

FURTHER INFORMATION

Hole 8

Hole CSD-14-008 ("Hole 8") on the Cascabel concession was drilled at the Alpala porphyry copper-gold prospect (Figure 1).  The hole was sited from the same collar as CSD-13-005 ("Hole 5") and drilled towards grid north at a dip of 85 degrees.  Hole 8 was sited to test for northeast extension of the high-grade mineralisation that has been discovered extending along a northwest trend from Hole 5 to CSD-14-007 ("Hole 7").     

Hole 8 was terminated on 11 October at a depth of 1310.45m due to the drill hole deviating northeast, away from the prognosed target zone.  Extensive intersections of visual copper sulphide were observed from 367.10m to 680.80m and from 902.78m to 1310.45m at end of hole.  Significant lengths of copper sulphide mineralisation were observed in the deeper interval. 

These visual results reveal continuity of mineralisation extending northeastward off the Alpala Footwall Structure.  Plates 1-3 illustrate the style of mineralisation encountered in Hole 8.   

Hole 9

Hole CSD-14-009 ("Hole 9") is located 120m north of the Hole 5 drill pad and is planned to be drilled with an 85 degree inclination towards 210 degrees UTM (Universal Transverse Mercator).  Pad preparation is in progress.  The drill rig may incur some downtime due to regular service maintenance.  Drilling is expected to commence during November.

Hole 9 is sited primarily to test the depth extension of the high-grade copper and gold mineralisation encountered in Hole 5.  The target for Hole 9 is to extend the high-grade copper and gold mineralisation intersected in Hole 5 to at least 1700m depth.  This would deliver a high-grade interval at Central Alpala of over 1000 vertical metres. 

The geometry of high-grade mineralisation defined to date appears to be controlled by quartz diorite and tonalitic intrusions that have intruded up along a northwest-southeast trending fault zone (the Alpala Footwall Structure; Figures 1, 5 and 6).  The lateral width of mineralisation in the northeast direction was partially tested with Hole 8 and is expected to extend further northeast at depth.  Hole 9 is sited to better test the vertical extent of mineralisation that appears to be controlled by the Alpala Footwall Structure.  The zone of porphyry copper-gold mineralisation and its intrusive source is expected to widen gradually with depth, and high-grade mineralisation is believed to extend to substantially greater depth than encountered in Hole 5 which was terminated after drilling through the southwest side of the Alpala Footwall Structure.

At the depths that the Alpala prospect is being drill tested, an extensive vertical interval of mineralisation is one of several important factors needed to sustain a future block cave mining operation.  Hole 9 will assist in defining the vertical extent of mineralisation by testing several hundred metres below and north of the high-grade intersection in Hole 5, and east of the high-grade intersection in Hole 7.

Orion 3D IP Survey

The Orion 3D IP survey on the Alpala grid commenced on 3 August and the survey on the Aguinaga grid was completed during the first week of September 2014.  The survey over the Alpala grid generated data over an area of 3.45 km east-west by 2.85 km north-south (9.8 km²), centred on the Alpala porphyry system.

Detailed processing of the data is currently being conducted by Quantec technicians in Toronto, in consultation with SolGold's consultant geophysicist Chris Moore.  Final processing of chargeability and conductivity-resistivity datasets is in progress.  Relatively advanced models of the data are available for the Company to use.

Selected views of the preliminary inversion models are illustrated in Figures 2 to 6 below. Key aspects of the preliminary induced polarisation (IP) data are listed below:

·     The magnetotelluric (MT) conductivity data reveal a deep conductive body that extends from below 2 kilometres depth and merges up into the base of the magnetic vector inversion (MVI) modelled magnetic body at North West Alpala (Figures 2,3,4).  The MT conductor is interpreted to be a magnetic and sulphide-bearing intrusion which is more conductive than the surrounding sequence.

·     Drilling along the margins and through the MVI anomaly (Holes 5, 7 and 8) reveal it is associated with significant quantities of secondary magnetite in inner propylitic and transitional potassic alteration zones that is associated with porphyry style copper-gold mineralisation, being high-grade in places. 

·     The deep MT conductor (900-2000m depth) is imaged at higher resolution at shallower levels (0-900m depth) by the shallower DC conductivity dataset.  The conductive bodies in this shallower zone (e.g. C1 and C2; Figures 2 and 5) lie mostly within the clay-altered lithocap above the MVI anomaly which maps the magnetic porphyry system and its magnetic margins at Central and North West Alpala.  

·     The close spatial association of the deep MT conductor that envelopes the root of the MVI anomaly at North West Alpala, and the location of strong DC conductors in the lithocap directly above the MVI anomaly, suggest that the main locus of the Alpala porphyry system is closely associated with the MVI anomaly.

·     The IP data supports the high prospectivity of the MVI anomaly, particularly where it penetrates the MT conductivity anomaly at North West Alpala.  The prospectivity of North West Alpala is strongly supported also by surface spectral data that identifies acidic alteration assemblages within the clay-altered lithocap above the MT and MVI anomalies. 

·     The IP data is supporting and refining an additional high quality target at South East Alpala, where coincident clusters of chargeability and conductivity anomalies overlie a deep magnetic anomaly (Figures 5 and 6).  The prospectivity of the region was initially identified in surficial spectral datasets that mapped highly acidic clay assemblages within the lithocap over the South East Alpala target area.

·     The South East Alpala target is shallower than the Central and North West Alpala target, being at around 600m depth to the top of the magnetic body that underlies the chargeability and conductivity responses.  

·     The convergence of the magnetic data, the IP data and the geological model allows us to view Central Alpala and North West Alpala as parts of a larger coherent target area.  The South East Alpala target area covers a similar area as the Central and North West Alpala combined target areas (Figure 5).  

·     Both the Central/North West Alpala target and the South East Alpala target extend northeastward off the Alpala Footwall Structure in a 'tear-drop' geometry (Figures 5 and 6).  The similar relationship between the two principal targets and the Alpala Footwall Structure suggest that it is a key structural conduit for potentially more than one mineralised porphyry system at Alpala.

Geological Model and Understanding Well Advanced Post Independent Review

Following the independent review of geological data from the Alpala target region by Dr Steven Garwin and collaboration with SolGold's technical team, a robust geological model is being created for the area of drilling at Central Alpala.  This model is constantly updated as new geological information is generated by drilling.

With the completion of Holes 1 to 7 at Central Alpala, sufficient geological data from drill holes was available to plot surfaces (shells) on several geological features within the area of drilling at Central Alpala.  Surfaces were created within Surpac^TM (a sophisticated mining software package), and in FracSis^TM (a 3D software visualisation program) by Dr Steven Garwin.

The surfaces created for the area of drilling utilised all the drill hole data available at the time and data from the surface trenches.  The following surfaces were created:

·     Two phases of diorite intrusions.

·     The northwest-trending Alpala Footwall Structure.

·     A surface defining porphyry B-veins at densities > 0.5%.

·     A surface defining chalcopyrite/pyrite (Cp/Py) ratio of >1 and >0.5.

·     A surface defining copper (Cu) at >0.3%.

·     A surface defining molybdenum (Mo) at >10ppm.

·     A surface defined by the Al₂O₃/Na₂O ratio which approximately maps the base of the lithocap.

Porphyry copper-gold deposits typically exhibit increasing 'B-vein' abundances, Cp/Py ratios, plus increasing Cu and Mo contents as the deposit is approached from the external country rock to the internal intrusions that host much of the mineralisation.  The geometries of these shells aid in establishing vectors towards the higher grade parts of the deposit.  Dr Steven Garwin, who completed his PhD on the Batu Hijau deposit and its surrounds on Sumbawa Island in Indonesia, showed that many of these types of shells envelope the porphyry mineralising centre in a consistent pattern, from which vectors towards mineralisation can be established.

Figure 7 shows the geological model at Central Alpala.  In porphyry systems, the geometry of these shells broadly reflects the geometry of the causative mineralising intrusion - equidimensional dome-like intrusions have equidimensional dome-like carapaces of B-vein shells, whilst tabular and finger-like intrusions have tabular and finger-like enveloping shells of B-veins.  The B-vein generation of quartz veins host much of the copper and gold in most porphyry deposits.  The geometry that is taking shape at Alpala is of a tabular and elongate mineralised body, striking northwest-southeast, and dipping steeply towards the northeast.  Many of the shells shown in Figure 7 yield a tabular geometry that gradually widens with depth.  

This geometry suggests that the mineralising intrusions are tabular (dyke-like) and have penetrated up along a major northwest-southeast trending fault structure, either defined by or associated with the Alpala Footwall Structure.  

Dr Garwin has recently also been engaged to train the ENSA technical team on site in geological mapping techniques that facilitate the methodology of establishing vectors towards the centre of the mineralising system.  Geological mapping is presently underway within and around the edges of the lithocap at Alpala.  This work will provide further geological information to supplement the extensive geochemical, spectral, magnetic, electrical IP and geological datasets that exist at Alpala and across the Cascabel project.

Metallurgical Testwork

A contract to engage a highly qualified metallurgical consultant is near finalisation.  Once engaged, the consultant will manage ongoing metallurgical test work for the Cascabel Project.

Six samples of drill core from Hole 5 were sent to the University of Western Australia (UWA) for microprobe analysis to determine the mineralogical association and location of copper and gold to assist with the metallurgical study. 

Rio Cachaco Soil Sampling Program

Rio Cachaco is a northwest flowing drainage system in which early exploration work by Cornerstone had identified significant counts of native gold in pan concentrate samples collected in the region.  Geological inspection of the upper headwaters of the Rio Cachaco drainage by SolGold geologists in August identified northwest-trending, structurally-controlled zones of argillic alteration within propylitic-altered andesitic volcanic rocks. Float samples of gold and base-metal bearing quartz veins occur in the region, at values greater than 1 g/t gold in 3 catchment areas.  Other adjacent drainages remain to be inspected. 

The catchment area is presently being sampled on a 200m by 100m soil grid, with sampling approximately 50% completed (Figure 8).  The sampling commenced at the northern, lower elevations of Rio Cachaco, and is progressing southward.  The soil sampling program will cover the northwestern extension of strong magnetic anomalies that lie to the northwest of the Alpala region. 

About Cascabel

SolGold owns 21.1m shares (approximately 11%) in TSX-V-listed Cornerstone Capital Resources (Cornerstone), and 85% of Exploraciones Novomining S.A. ("ENSA").  ENSA is an Ecuadorean registered company, which holds 100% of the Cascabel concession in northern Ecuador.  Cornerstone holds the remaining 15% of ENSA.

The Cascabel project is located in northwestern Ecuador in an under-explored northern section of the richly endowed Andean Copper Belt.  World class deposits located within this belt include the 982 million tonnes at 0.89% Cu Junin copper project located some 60km to the southwest of Cascabel, the 3.3 billion tonnes at 0.36% Cu Cobre Panama deposit located to the north in Panama and the 905 million tonnes at 0.92 g/t Au La Colosa porphyry deposit located to the north in Colombia, containing 26 million ounces of gold.  The Alpala Prospect exhibits surface mineralisation and alteration patterns indicative of a porphyry copper gold system and has a similar footprint to large porphyry systems around the world.

Qualified Person:

Information in this report relating to the exploration results is based on data reviewed by Dr Bruce Rohrlach (BSc (Hons), PhD,), the GM Exploration of the Company. Dr Rohrlach is a Member of the Australasian Institute of Mining and Metallurgy who has in excess of 26 years' experience in mineral exploration and is a Qualified Person under the AIM Rules.  Dr Rohrlach consents to the inclusion of the information in the form and context in which it appears.

By order of the Board

Karl Schlobohm

Company Secretary

Contacts:

Mr Alan Martin

SolGold Plc (CEO and Managing Director)                                                    Tel: [phone]

[e-mail]

Mr Nicholas Mather                                                                                         Tel: [phone]

SolGold Plc (Executive Director)

[e-mail] 

Mr Karl Schlobohm                                                                                         Tel: [phone]

SolGold Plc (Company Secretary)

[e-mail]  

Mr Ewan Leggat/Ms Katy Birkin                                                                 Tel: [phone]

SP Angel Corporate Finance LLP (NOMAD and Broker)

[e-mail]  

Richard Greenfield / Alexandra Carse                                                    Tel: [phone]

GMP Securities Europe LLP (Joint Broker)

[e-mail]

Mr Dominic Barretto / Ms Anna Legge                                                     Tel: [phone]

Yellow Jersey PR Limited (Financial PR)

[e-mail]  

NOTES TO EDITORS

SolGold's exploration projects are located in northern Ecuador, Australia, and the Solomon Islands. In Ecuador, they consist of a joint venture with Cornerstone Capital Resources Inc. on the Cascabel copper-gold project.  In Australia, SolGold holds 100% of the Rannes, Mt Perry, Cracow West and Normanby Projects, all in southeast Queensland. In the Solomon Islands they comprise the Fauro Project (located on Fauro Island), and the Lower Koloula, Malukuna and Kuma licenses, which are located on Guadalcanal. 

The Cascabel copper-gold project is located approximately 180 km by sealed road north of Ecuador's capital, Quito, 20 km south of the Colombian border, and 75 km inland from the coastal city of San Lorenzo. At the Rannes project SolGold has announced indicated and inferred resources of 18.7 million tonnes at 0.9 g/t gold equivalent (gold + silver) for 550,146 ounces of gold equivalent (296,657 ounces of gold and 10,137,736 ounces of silver; see announcement dated 23 May 2012 for details of the resource statement and gold equivalent ratios).  The Rannes project is currently under review.

In the Solomon Islands, a soil geochemical survey and 3D modelling of magnetic data has been approved at Kuma.

SolGold's objective is to create substantial shareholder value by discovering and defining world-class copper-gold deposits.

SolGold's Board includes accomplished professionals with strong track records in the areas of exploration, mine development, investment, finance and law.  Board and Management have significantly vested interests in the Company, holding approximately 14% of its issued share capital.

SolGold is based in Brisbane, Queensland, Australia.  The Company listed on London's AIM Market in 2006, under the AIM code 'SOLG' and currently has a total of 652,153,202 fully paid ordinary shares, 12,820,000 options exercisable at 50p, 12,730,000 options exercisable at 28p and 9,730,000 options exercisable at 14p.

CAUTIONARY NOTICE

The news release may contain certain statements and expressions of belief, expectation or opinion which are forward looking statements, and which relate, inter alia, to the Company's proposed strategy, plans and objectives or to the expectations or intentions of the Company's directors. Such forward-looking 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 forward-looking statements. Accordingly, you should not rely on any forward-looking statements and save as required by the AIM Rules for Companies or by law, the Company does not accept any obligation to disseminate any updates or revisions to such forward-looking statements.

 

END

 

 

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