Cascabel Exploration Update

RNS Number : 9467B

SolGold PLC

22 June 2016

 

22 June 2016

SolGold plc

("SolGold" or the "Company")

Cascabel Exploration Update

The Board of Directors of SolGold (AIM: SOLG) wish to provide shareholders with the following update from its Cascabel Copper-Gold Porphyry Project in Ecuador.

References to figures and 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:

[RNS to insert link]

Holes 15R2 and 17

Samples for drill holes CSD-16-015R2 and CSD-16-017 (Holes 15R2 and 17) are currently at the assay laboratory and upon receipt the results will be compiled and announced.

Drill holes 18 and 19 will be sited after consideration of the results of the updated magnetic modelling and the preliminary evaluation of the Moran Prospect (both addressed below).  Maintenance and re-tooling of the drill rigs is currently taking place on site.

Field Mapping and Sampling

Activities are continuing in the field with a focus on extensions around the Alpala South prospect, Trevinio, and the Aguinaga prospect where an infill deep auguring program is underway across the copper gold and molybdenum anomalous areas.  Results will be released on completion of the program.

Moran Prospect

Ongoing mapping and sampling activities have identified an additional classically zoned outcropping and visually copper mineralised porphyry system at the Moran Prospect approximately 1.2 km north of the Alpala North West centre of the Alpala trend at Cascabel (Figures 3, 4, 5).  The prospect is characterised by an outcropping 300x300 m (open) zone of variably fractured and mineralised intrusive and volcanic rocks exhibiting >2% multidirectional vein intensity characteristic of strong copper gold mineralisation at Alpala.  The mineralisation at Moran exhibits visible chalcopyrite (copper sulphide) in quartz and magnetite veins in fractured magnetic diorite intrusive host rock and surrounding host volcanic rocks (Figure 6).

Importantly the peripheral areas host numerous chalcopyrite, sphalerite (zinc sulphide) and galena (lead sulphide ) and quartz / carbonate veins classically emplaced in the peripheral zones around the copper gold rich cores of many South American copper gold porphyry systems.

The Moran Prospect at surface is dislocated to the north by 300 metres and over the top of a strong MVI (Magnetic Vector Image) anomaly at a depth of 350 metres (shallowing to the north towards the outcropping mineralisation) which has been defined by the latest 3D magnetic model of the Cascabel Project area.  This most up to date iteration of the predictive 3D magnetic model has been recently completed by SolGold's independent geophysical consultants after several months of detailed and sophisticated data treatment and modelling.  The magnetic anomaly at a cut-off of 0.06 SI units (a scale measure of magnetic character) which is characteristic of the mineralised zone at the Alpala deposit to the south is 1000m wide x 500m north south (open and shallowing to the north under the mineralisation) with a vertical extent of 800m.  The conductivity model (Figure 5) demonstrates a classic drape over the top of marginal to magnetic cores in the porphyry systems.

SolGold is targeting the magnetic anomaly, extensions northwards and surface mineralisation at Moran as prospective for the definition of in excess of 1,000Mt of mineral resource in addition to the Alpala Deposit which has to date hosted significant mineralisation in 17 of the 18 holes drilled, returning world class tier 1 copper gold intersections.

SolGold is continuing a program of very detailed soil auguring, mapping, rock chip and rock saw channel sampling and assaying to mature the prospect for drill testing, expected in late 2016.

The discovery of the Moran system brings to 11 the inventory of orebody targets defined to date at Cascabel:

Alpala - 18 holes drilled for 22,000m - interim maiden resource expected in Q3 2016.

Alpala West - mapping

Alpala South - mapping

Alpala South East - Hematite Hill - mapping

Alpala North East - mapping

Crystal - mapping

Trevinio - mapping

Aguinaga - geophysical models and auguring in preparation for drilling

Moran - auguring mapping sampling in prep for drilling

Tandayama America - mapping

Chinambicito - mapping

These targets are all defined by coincident copper gold molybdenum and magnetic anomalies.

New Magnetic Model for Alpala - Moran

A new constrained magnetic model has been completed by the Company's geophysical consultants and has assisted with the identification of the Moran Prospect referred to above.  A further unconstrained magnetic model is being revised by the independent consultant and results are expected in July.  The conductivity model (Figure 5) demonstrates a classic drape over the top of marginal to magnetic cores in the porphyry systems.

Carmen Alpala Road

The Carmen Alpala access road is now within 700 metres of the Alpala Camp and expected to be finished within 6 weeks.  The road is expected to provide access for a new drilling contractor with heavier rigs capable of deeper and faster drill holes capable of completing a 2.5km drill hole in 35 days, subject to ground conditions.

New Application Area

Exploraciones Novomining SA (ENSA; an 85% owned SolGold subsidiary) has applied for a new exploration area which will be primarily to address the requirements for future plant site waste rock and tailings dams for Cascabel.

By order of the Board

Karl Schlobohm

Company Secretary

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 30 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.

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 / Mr Richard Morrison                                                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 development company with assets in Ecuador, the Solomon Islands and Australia.  The Company's objective is to create substantial shareholder value by discovering and defining world‐class copper‐gold deposits.  SolGold's Board and Management Team have high vested interests in the success of Company, holding approximately 14% of its issued share capital, as well as strong track records in the areas of exploration mine development, investment, finance and law.  SolGold's experience is augmented by state of the art geophysical techniques and the guidance of Newmont trained porphyry expert Dr Steve Garwin.

Cascabel, the Company's world class flagship copper‐gold porphyry project, is located in North West 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. 

To date the Company has completed geological mapping, soil sampling, 14km² and 9km² Induced Polarisation and Magnetotelluric "Orion" surveys at the Alpala and Aguinaga targets respectively.  By December 2015, the Company had completed approximately 25km² of soil sampling, 14km² of electrical surveys, 20,100m of drilling and expended approximately US$30m (including the investment in Cornerstone). 

Cascabel is characterised by multiple targets, world class drilling intersections over 1km in length, and high copper and gold grades, as well as logistic advantages in location, elevation, water supply, proximity to road, port and power services and a progressive legislative approach to resource development.

SolGold is planning a resource statement at Alpala the most advanced target at Cascabel during 2016, in addition to drill testing several other key targets in the Cascabel concession at Aguinaga, Trivinio, Alpala Northwest, Hematite Hill, Alpala Southeast, Cristal, Tandayama-America, Moran and Chinambicito.  By the end of 2016 the Company is planning further metallurgical testing, and completion of early stage mine and plant design and a scoping study for an economic development at Cascabel.  SolGold is investigating both high tonnage / low grade open cut and high grade / low tonnage underground developments as a block caving operation.

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 0.6, determined using copper price of US$3/pound and gold price of US$40/gram.

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

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 953,897,601 ordinary shares issued, 4,820,000 options exercisable at 50p, 7,280,000 options exercisable at 28p and 9,280,000 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.

 

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