Cascabel Exploration Update

RNS Number : 2388T

SolGold PLC

04 January 2017

 

04 January, 2017

SolGold plc

("SolGold" or the "Company")

Cascabel Exploration Update

Hole 19 intersects copper mineralisation over 800m.

Copper rich bornite presence in Hole 19 endorses

southeastern targets at Alpala.

Hole 20R hits copper early and high.

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 Hole 19 intersects over 800m of significant copper mineralisation from 325.6m to current depth 1161.5m, including a more intensely mineralised section from 545.9m.

Ø Bornite (or 'peacock ore', a copper rich sulphide mineral containing 63% copper, prized in commercial copper concentrates) and molybdenite are present in the mineralised section of hole 19.  Up to 2.0% bornite and 4.3% chalcopyrite (35% copper) has been visually logged over selected short intervals.

Ø Bornite mineralisation mapped at surface, and in hole 19 to date, endorse Hematite Hill, Alpala Southeast, and Cristal as high priority targets over 750m of strike extension southeast of Alpala Central.

Ø Preparations for drill rigs 4 and 5 continue ahead of drill testing the zone southeast of Alpala.

Ø Hole 18 encountered significant and intense veining and mineralisation from 903.9m to 1568.9m, a distance of some 665 metres and continues at 2144.8m depth, testing the lower levels and south western side of the Alpala system.

Ø Hole 20R enters significant brecciated (fragmented) porphyry style copper mineralisation at 905.4m, approximately 200m high to prognosis, indicating widening and shallowing of the mineralised zone on the east and north east side of Alpala Central.  Mineralisation continues to current depth of 1050.0m. 

Ø Preparations for Toronto Stock Exchange and Standard Main Market listing of the London Stock Exchange continue.

FURTHER INFORMATION:

The Cascabel Project is located on the gold-rich northern section of the prolific Andean Copper belt renowned as the production base for nearly half of the world's copper, (Figure 1).  The project area hosts mineralisation of Eocene age, the same age as numerous Tier 1 deposits along the Andean Copper Belt in Chile and Peru to the south.  The project base is located at Rocafuerte, in northern Ecuador, approximately 3 hours drive north of Quito, close to water, power supply and Pacific Ports (Figure 2).   SolGold holds an 85% interest in ENSA (Exploraciones Novomining S.A.) which holds the Cascabel tenement.  

Fourteen different targets have been defined at Cascabel and only one of these, the Alpala Deposit has been drilled to date (Figure 3).  The deposit at Alpala continues to grow with each new drill hole.  Drilling continues to focus on defining the geometry of the Alpala deposit, which is open in multiple directions.   Over 27,000m of drilling has been completed to date (Figure 4).

Drill Hole CSD-16-019 ("Hole 19"), at a current depth of 1161.5m has intersected over 800m of significant copper mineralisation to date from 325.6m, including an intensely mineralised section from 545.9m, where intense visible copper sulphide mineralisation occurs with visual chalcopyrite up to 4.3% and bornite up to 2.0% of the rock volume over selected short intervals.

The mineralisation encountered in Hole 19 further endorses high priority targets Hematite Hill, Alpala South East and Cristal (which all show Bornite mineralisation at surface) along the 750 m long southeast strike extension from Alpala Central.  Bornite, the main component of 'Peacock Ore,' is a copper rich sulphide mineral containing 63% copper that adds important economic benefits in a development, by enriching mill concentrate grades. Drilling in hole 19 continues towards a planned depth of at least 1600m.

Hole 19 visual results to date lift the deposit limits upwards above hole 12 and 16 and further towards the southeast and south.

Drill Hole CSD-16-018 ("Hole 18"), is at a depth of 2144.8m, having so far intersected visible copper mineralisation from 903.9m to 1568.9m, including a richer section from 1171.8m to 1519.1m.  Drilling continues towards a planned depth of 2300m, testing the lower and south western portion of the Alpala Central system. 

Drill hole CSD-16-020R ("Hole 20R"), at a current depth of 1050.0m, is being drilled to test the lower trend of the grade and direction of mineralisation between 1200m depth on the northeast side of the porphyry system and 2800m depth on the southwest.  The hole will test for mineralisation up to 1000m below the lowest known intersections in holes 5, 9, 12 and 16.  Drill hole 20R will also provide a parent hole for directional holes into the orebody at a low angle from the northeast side.

20R has intersected mineralised breccia, (a fragmented rock type), composed of broken mineralised porphyry from 905.4m depth, approximately 200m higher than expected and approximately 200m north east of the expected position, establishing potential for significant extensions to Alpala on the eastern and north eastern sides of the porphyry system.

Examples of selected mineralisation in drill core intersected recently in Holes 18, 19 and 20R show visual copper mineralisation being encountered (Figures 5, 6, 7).

Planned Drill Rig Deployment

Solgold is continuing to implement its stated objective of deploying multiple drilling rigs at Cascabel. Currently there are three operational rigs at the project and upgraded infrastructure and services will enable the deployment of two additional rigs in the next two months.

·   Rig 1 (current) will continue testing the upward extensions of the Alpala Central deposit.

·   Rig 2 (current) will relocate southeast of Alpala Central to the Hematite Hill area.

·   Rig 3 (current) will continue testing the deepest richest portion of the Alpala Central deposit, below known mineralisation. 

·   Rig 4 (proposed) is scheduled to commence an extensive multi-hole directional drilling program on the Alpala Deposit in February 2017.

·   Rig 5 (proposed) is scheduled to commence testing of the exciting Alpala South area, approximately 1km southeast of the current drilling area at Alpala, in March 2017.

Solgold plans to have 7 drilling rigs active on the project by the end of October 2017.

Planned drilling over the coming quarter is shown in Figure 8, and priority target areas along the Alpala southwesterly trend are shown in long-section view in Figure 9.

An Independent Technical report on the Cascabel Project under National Instrument 43-101 and accompanying documents by SRK Exploration Pty Ltd are being prepared to support listing of Solgold securities on the Toronto Stock Exchange (TSX) in early 2017.

Qualified Person:

Information in this report relating to the exploration results is based on data reviewed by Mr Nicholas Mather (B.Sc. Hons Geol.), the Chief Executive Officer of the Company.  Mr Mather is a Fellow of the Australasian Institute of Mining and Metallurgy who has in excess of 25 years' experience in mineral exploration and is a Qualified Person under the AIM Rules.  Mr Mather 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 Nicholas Mather                                                                                       Tel: [phone]

SolGold Plc (Executive Director)                                                                        [phone]

[e-mail]

Mr Karl Schlobohm                                                                                         Tel: [phone]

SolGold Plc (Company Secretary)

[e-mail]

Mr Ewan Leggat                                                                                                Tel: [phone]

SP Angel Corporate Finance LLP (NOMAD and Broker)

[e-mail]

Follow us on twitter @SolGold_plc

NOTES TO EDITORS

SolGold is a Brisbane, Australia based, AIM‐listed (SOLG) copper gold exploration and future development company with assets in Ecuador, Solomon Islands and Australia.  SolGold's primary objective is to discover and define world‐class copper‐gold deposits.  The Board and Management Team have substantial vested interests in the success of Company, as shareholders as well as strong track records in the areas of exploration, mine appraisal and development, investment, finance and law.  SolGold's experience is augmented by state of the art geophysical and modelling techniques and the guidance of Newmont trained porphyry expert Dr Steve Garwin.

SolGold was shortlisted as a nominee for the Mining Journal Explorer Achievement Award for 2016. The Company announced USD54m in capital raisings in September 2016 involving Maxit Capital LP, Newcrest International Ltd and DGR Global Ltd, all undertaken at substantial premiums to previous raisings and SolGold has at January 2017 USD46 million in available cash to continue the exploration and development of its flagship Cascabel Project. 

Coincident with those capital raisings, Mr Scott Caldwell (CEO of TSX-listed Guyana Goldfields Inc) joined the SolGold Board on 9 September 2016.  Mr Caldwell is a mining engineer with over 30 years of experience building and operating gold and base metal mines worldwide, including USA, Canada, Russia, Zimbabwe, Chile and Indonesia and was in 2016 recognised as CEO of the year for South-American resource companies.

Cascabel, Solgold's 85% owned world class flagship copper‐gold porphyry project, is located in northern Ecuador on the under‐explored northern section of the richly endowed Andean Copper Belt.  SolGold owns 85% of Exploraciones Novomining S.A. ("ENSA") and approximately 11% of TSX‐V‐listed Cornerstone Capital Resources, which holds the remaining 15% of ENSA, the Ecuadorian registered company which holds 100% of the Cascabel concession.

The investment by Newcrest into 10% of SolGold and investment into Solgold by Guyana Goldfields, Maxit Capital and its clients, endorses Ecuador as a mining destination, the management team at SolGold, the dimension, size and scale of Alpala, the general prospectivity of Cascabel and its multiple targets. The gold endowment, location, infrastructure, logistics are important competitive advantages offered by the project.

To date SolGold has completed geological mapping and soil sampling over 25 km², along with and an additional 9km² of Induced Polarisation and 14km² Magnetotelluric "Orion" surveys over the Alpala cluster and Aguinaga targets.  SolGold has at January 2017, completed over 28,000m of drilling and expended over USD 39M on the program, corporate costs and investments into Cornerstone.  Intensive diamond drilling is planned for the next 12 months with multiple drill rigs. This has been completed without lost time injury or environmental incident, employing a workforce of up to 150 Ecuadoreans workers and geoscientists.

Cascabel is characterised by fourteen (14) identified targets, world class drilling intersections over 1km in length at potentially economic grades, and high copper and gold grades in richer sections, as well as logistic advantages in location, elevation, water supply, proximity to roads, port and power services; and a progressive legislative approach to resource development in Ecuador.  To date, SolGold has drill tested only one of the 14 targets, being Alpala.

The Alpala deposit is open at depth and in the upper extensions, as well as to the north, north-east, south-east and south-west.  The mineralised zones at Alpala, and Moran some 700m to the north, and Aguinaga some 2km north east, are closely modelled by magnetic signatures and currently encompass over 10Bt of magnetic rock, anticipated on the basis of a strong relationship between copper sulphides and magnetite, to be mineralised with copper and gold.

SolGold is focussing on extending the dimensions of Alpala before completing a resource statement and drill testing of the other key targets within the Cascabel concession at Alpala South East, Aguinaga, Trivino, Moran, Alpala Northwest, Hematite Hill, Cristal, Parambas, Carmen, Tandayama-America and Chinambicito.  The Company is planning further metallurgical testing and completion of a conceptual early stage mine and plant design and a scoping study for an economic development at Cascabel.   SolGold is investigating both high tonnage / low-medium grade open cut and underground block caving operations, and a high grade / low tonnage initial underground development.

Drill hole intercepts are calculated using a data aggregation method, defined by copper equivalent cut-off grades and reported with up to 10m internal dilution, excluding bridging to a single sample.  Copper equivalent grades are calculated using a gold conversion factor of 0.89, determined using copper price of USD2.20/pound and gold price of USD1350/ounce.

Following a comprehensive review of the geology and prospectivity of Ecuador, SolGold and its subsidiaries have also applied for additional exploration licences in Ecuador over a number of additional promising porphyry copper gold targets elsewhere in the Country. SolGold is negotiating external funding options which could provide the Company with the ability to have these projects fully funded by a third party while focussing on Cascabel.

In Queensland, Australia the Company is evaluating the future exploration plans for the Mt Perry, Rannes and Normanby projects.  Joint venture agreements are being investigated for a joint venture partner to commit funds and carry out exploration to earn an interest in the tenements.

SolGold retains interests in its original theatre of operations, Solomon Islands in the South West Pacific, where the 100% owned, but as yet undrilled, Kuma prospect on the island of Kuma exhibits surface geological characteristics which are traditionally indicative of a large metal rich copper gold intrusive porphyry system.  SolGold intends in the future to apply intellectual property and experience developed in Ecuador to target additional world class copper gold porphyries at Kuma and other targets in Ecuador and Argentina.

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 1,428,966,605 ordinary shares issued, together with 33,975,884 options exercisable at 28p and 14,975,884 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.

Please click on or insert the following link into your browser to view Figures 1 to 9:

http://www.rns-pdf.londonstockexchange.com/rns/2388T_-2017-1-3.pdf

 

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