Cascabel Exploration Update

RNS Number : 4981B
SolGold PLC
04 April 2017
 

4 April 2017

SolGold plc

("SolGold" or the "Company")

 

Cascabel Exploration Update: Alpala Continues to Grow

 

The Board of SolGold (AIM code: SOLG) is pleased to provide an update on Holes 19 to 25 at the Company's Cascabel copper-gold porphyry project in Ecuador.

 

HIGHLIGHTS:

 

Ø Hole 19 final results return:

·    1344m @ 0.44 % copper and 0.28 g/t gold from 268m (at 0.10% CuEq cut-off), including:

·    980m @ 0.55 % copper and 0.36 g/t gold from 514m (at 0.30% CuEq cut-off), and

·    552m @ 0.68 % copper and 0.45 g/t gold from 822m (at 0.5% CuEq cut-off).

 

Ø Hole 20R intersects strongly mineralised porphyry clasts within hydrothermal breccia returning open-ended intersection of:

·    498.4m @ 0.20% copper and 0.15 g/t gold from 844m (at 0.10% CuEq cut-off), including:

·    126.0m @ 0.27 % copper and 0.32 g/t gold from 1136m (at 0.30% CuEq cut-off), and

·    44.0m @ 0.27 % copper and 0.58 g/t gold from 1202m (at 0.50% CuEq cut-off).

 

Ø Hole 21 intersects significant copper sulphide mineralisation from around 685m to 1610m depth.  Based on visual logging estimates, this 925m interval shows an average of >1.5 volume-percent chalcopyrite, which includes a zone that averages >2.0 volume-percent chalcopyrite over a down-hole length of approximately 490m.  The abundance of bornite in the 925m interval is visually estimated to range from zero to 0.5 volume-percent.  Chalcopyrite and bornite are copper sulphide minerals that contain 34.6% and 63.3% copper, respectively.  Assay results for Hole 21 are expected in late April 2017.

 

 

Ø Hole 22 intersects visible copper sulphide mineralisation from 253m to approximately 1150m depth and includes very strong bornite mineralisation around 960m depth.  Multi-directional quartz -chalcopyrite ±bornite veining occupies up to a maximum of 23 volume-percent in parts of Hole 22.  Assay results for Hole 22 are expected in early April 2017.

 

Ø Hole 23R intersects hydrothermal breccia and strong phyllic alteration, with the presence of mineralised porphyry clasts in parts of the breccia.  Hole 23R, at a current depth of 356.6m, is planned to intersect deep untested mineralisation up to 1800m below surface and has a planned hole depth of at least 2000m.

Ø Hole 24 continues drilling at Alpala Southeast, at a current depth of 649.5m testing approximately 570m to the southeast of Hole 23R.  To date Hole 24 has intersected strong pyrite and trace chalcopyrite and trace bornite and molybdenite mineralisation.  Hole 24 is planned to extend the known mineralised corridor at Alpala to some 1150m from Hole 13 in the northwest.

 

Ø Hole 25 continues drilling at Hematite Hill, at a current depth of 560.5m testing some 250m to the southeast of Hole 23R.  To date Hole 25 has intersected hydrothermal breccia with strong phyllic alteration and trace chalcopyrite mineralisation, and has a planned hole depth of 2000m. 

 

Ø A fourth man-portable rig arrives at site early April 2017.  The arrival of Rigs 4, 5, 6 and 7 over the coming two quarters will also see drill testing expanding to Alpala East, Alpala West, Carmen, Trivinio and Aguinaga by mid-year.

 

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:

 

http://www.rns-pdf.londonstockexchange.com/rns/4981B_-2017-4-4.pdf

 

FURTHER INFORMATION:

 

The Cascabel Project is located on the gold-rich northern section of the prolific Andean Copper belt, renowned as the base for nearly half of the world's copper production, (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 three 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 100% of the Cascabel tenement.

 

Fifteen individual targets have been defined at Cascabel.  SolGold has successfully drill tested three of the fifteen targets, being Alpala Central, Alpala Northwest, and Hematite Hill.  Drill testing of a fourth target, at Alpala Southeast is currently under way (Hole 24) (Figure 3).  The deposit at Alpala continues to grow with each new drill hole.  Current drilling focusses on defining the geometry of the growing Alpala deposit, which is open in virtually all directions.  Over 33,000m of drilling has been completed to date, and the arrival of Rigs 4, 5, 6 and 7 over the coming two quarters will see drill testing expanding to Alpala East, Alpala West, Trivinio and Aguinaga by mid-year.  The drilling program ramps up towards eight drilling rigs by year end, which will also see drill testing of the Tandayama-America prospect in the northern part of the licence area.  (Figure 4).

 

Hole 19 results previously reported 14th February 2017 up to a depth of 1400m.  Final results received for the remainder of the hole from 1400m to end of hole at 1632.52m return final updated results of:

·     1344m @ 0.44 % copper and 0.28 g/t gold from 268m (at 0.10% CuEq cut-off grade), including:

·       980m @ 0.55 % copper and 0.36 g/t gold from 514m (at 0.30% CuEq cut-off grade), and

·       552m @ 0.68 % copper and 0.45 g/t gold from 822m (at 0.5% CuEq cut-off grade).

 

Very long broad halo intersections of well over a kilometre like this encountered in Hole 19 are very common at Alpala and hold exploration significance, as they confirm the very robust nature of the mineralising system being defined, and support the strong geochemical and alteration footprint (as determined by spectral data) of the growing Alpala deposit.  The position of Hole 19 is shown in cross-section B-B' in Figure 8.

 

Hole 20 (CSD-16-020) was abandoned at 157.0m depth after drilling contractors experienced technical difficulties downhole.  This hole was re-drilled as Hole 20R (CSD-16-020R) which reached a depth of 1342.4m before it was suspended on 28 February 2017 for reassessment of the deep directional diamond drilling strategy.  SolGold has since appointed an accomplished directional drilling contractor for this task and the upcoming program.  Directional core drilling allows controlled deviation of the borehole path and/or multiple branches from a parent hole, saving the cost, effort and directional uncertainty involved in multiple single holes.  Hole 20R has been preserved with casing remaining in the hole and re-entry is planned to test for the source of strongly mineralised porphyry clasts encountered within hydrothermal breccia.  Hole 20R to date has returned an open-ended intersection of:

·     498.4m @ 0.20% copper and 0.15 g/t gold from 844m (at 0.10% CuEq cut-off grade), including:

·     110.0m @ 0.28 % copper and 0.34 g/t gold from 1136m (at 0.30% CuEq cut-off grade), and

·       44.0m @ 0.27 % copper and 0.58 g/t gold from 1202m (at 0.50% CuEq cut-off grade). 

 

These results encountered in Hole 20R, occur approximately 200m outside of and to the northeast of the previously known limit of mineralisation, which bodes well for significant extensions of the deposit to towards the east and northeast.  The position of Hole 20R is shown in cross-section A-A' in Figure 5.  A selected example of mineralised porphyry clasts encountered are shown in Figure 6.

 

Hole 21 (CSD-17-021), situated approximately 250m along strike to the southeast of Holes 16 (856m @ 0.80% Cu, 1.04g/t Au) and 23R, and was completed to a depth of 1619.2m on 17 March 2017.  Hole 21 intersected significant copper sulphide mineralisation from around 685m to 1610m depth.  Based on visual logging estimates, this 925m interval shows an average of >1.5 volume-percent chalcopyrite, which includes a zone that averages >2.0 volume-percent chalcopyrite over a down-hole length of approximately 490m.  The abundance of bornite in the 925m interval is visually estimated to range from zero to 0.5 volume-percent.  Chalcopyrite and bornite are copper sulphide minerals that contain 34.6% and 63.3% copper respectively.  Assay results for Hole 21 are expected in late April 2017. Selected examples of mineralisation encountered in Hole 21 are shown in Figure 7.

 

Hole 22 (CSD-17-022) was completed to a depth of 1311.2m on 5th March 2017 testing approximately 130m above Hole 19 from the same drill site as Hole 19.  Hole 22 intersected visible copper sulphide mineralisation from 253m to approximately 1150m depth.  Multi-directional quartz -chalcopyrite ±bornite veining occupies up to a maximum of 23% of the total rock volume in parts of Hole 22.  Based on visual logging estimates, this 897m interval shows an average of >0.8 volume-percent chalcopyrite, which includes a zone that averages >1.5 volume-percent chalcopyrite over a down-hole length of approximately 120m.  Hole 22 intersected zones of strong bornite mineralisation from 958m to 962m and from 986m to 994m, estimated to range from 0.1 to 0.3 volume-percent.  Assay results for Hole 22 are expected in early April 2017.  The position of Hole 22 is shown in cross-section B-B' in Figure 8.  Selected examples of mineralisation encountered in Hole 22 are shown in Figure 9.

 

Hole 23 (CSD-17-023) at Alpala Northeast was abandoned at 159.0m depth after drilling contractors experienced technical difficulties downhole, and was redrilled as Hole 23R (CSD-16-023R) which continues drilling at a current depth of 356.6m testing approximately 125m below and in between Holes 12 and 16.  

 

To date Hole 23R has intersected hydrothermal breccia and strong phyllic alteration, with the presence of mineralised porphyry clasts in parts of the breccia.  Hole 23R is being drilled sub-vertically to intersect deep untested pockets of mineralisation upto 1800m below surface and has a planned hole depth of some 2000m.  Position of Hole 23R is shown in cross-section in Figure 8

 

Hole 24 (CSD-17-024) continues drilling at Alpala Southeast, at a current depth of 649.5m testing approximately 570m to southeast of Hole 23R.  To date Hole 24 has intersected strong pyrite and trace chalcopyrite and trace bornite and molybdenite mineralisation.  Hole 24 lies approximately 100m north of the Malte Creek system, where visible chalcopyrite and bornite mineralisation was noted in surface geological mapping.  The Alpala Southeast prospect area is characterised by coincident Molybdenum and Copper/Zinc soil geochemical highs, as well as intense and advanced argillic alteration identified from soil auger chip spectral analysis with high dickite and pyrophyllite clay content, marking high temperatures of formation typical of a porphyry.  Subject to encouraging results, Hole 24 could potentially extend the mineralised corridor at Alpala to some 1150m from Hole 13 in the northwest.  Hole 24 has to date intersected strong pyrite and trace chalcopyrite mineralisation and has a planned hole depth of at least 2000m. 

 

Hole 25 (CSD-17-025) continues drilling at Hematite Hill at a current depth of 560.5m, and is being drilled sub-vertical to test for mineralisation approximately 250m to the southeast of Hole 23R.  To date Hole 25 has intersected strong phyllic alteration with trace chalcopyrite mineralisation and has a planned hole depth of some 2000m. 

 

GEOPHYSICS

 

SolGold is currently nearing completion a ground magnetic survey, to be followed by a detailed Orion-Spartan 3D IP (Induced Polarisation) survey to conduct resistivity, conductivity and chargeability data, and a Lidar topographic control survey across most of the licence area (Figure 10).  Progress to date on the ground magnetics survey has reached 85%, ahead of commencement of the 3D IP survey planned for mid-April 2017.  This work will not only augment the existing geophysical targets at Alpala and Aguinaga, but further investigate the promising Tandayama-America anomaly and other satellite targets on the property.  The IP data sets will aid in 3D mapping of the sulphide distribution in the porphyry system and its margins.  Following analysis of these datasets, SolGold will further refine drill targets along the Alpala cluster, as well as those at Moran, Aguinaga, and Tandayama-America.

 

OUTLOOK

 

Upgrade and expansion of site facilities are well underway at Cascabel as the project activity continues to intensify.  The geology team have yet to define the extents of the Alpala porphyry system, and the deposit remains open in most directions, continuing to grow with each new drill hole.  An aggressive drill program, increasing to ten core-rigs producing approximately 90,000m of core per annum from early 2018, to delineate the system limits along the greater Alpala trend prior to a maiden resource statement.  An increased understanding of the deposit is now leading to much larger step-outs in drilling as SolGold vectors towards rich targeted copper and gold at the heart of the Alpala system.



 

 

 

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: +61 (0) 7 3303 0665

SolGold Plc (Executive Director)                                                                        +61 (0) 417 880 448

nmather@solgold.com.au

 

Mr Karl Schlobohm                                                                                         Tel: +61 (0) 7 3303 0661

SolGold Plc (Company Secretary)

kschlobohm@solgold.com.au

 

Mr Ewan Leggat / Mr Richard Morrison                                                Tel: +44 (0) 20 3470 0470

SP Angel Corporate Finance LLP (NOMAD and Broker)

ewan.leggat@spangel.co.uk

 

Follow us on twitter @SolGold_plc

 

NOTES TO EDITORS

 

SolGold is a Brisbane, Australia based, AIM‐listed (SOLG) copper gold exploration and prospective 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 the 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 porphyry copper and gold 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 the market at the time, and SolGold has (at March 2017) USD35 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

 

Mr Craig Jones also joined the SolGold Board on 3 March 2017, nominated to the Board of SolGold by Newcrest Mining, a 10% shareholder in SolGold.  Mr Jones is a Mechanical Engineer and is currently the Executive General Manager Wafi-Golpu (Newcrest-Harmony MMJV).  He has held various senior management and executive roles within the Newcrest Group, including General Manager Projects, General Manager Cadia Valley Operations, Executive General Manager Projects and Asset Management, Executive General Manager Australian and Indonesian Operations, Executive General Manager Australian Operations and Projects, and Executive General Manager Cadia and Morobe Mining Joint Venture. Prior to joining Newcrest, Mr Jones worked for Rio Tinto.

 

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 ("Cornerstone"), 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 an exploration and mining destination, the management team at SolGold, the dimension, size and scale of the growing Alpala deposit, the 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, soil sampling, rock saw channel sampling, geochemical and spectral alteration mapping over 25km2, along with an additional 9km2 of Induced Polarisation and 14km2 Magnetotelluric "Orion" surveys over the Alpala cluster and Aguinaga targets. 

 

SolGold has completed over 33,000m of drilling and expended over USD 42M on the program, corporate costs and investments into Cornerstone.  This has been accomplished without lost time injury or environmental incident, employing a workforce of up to 176 Ecuadoreans workers and geoscientists and 6 expatriate Australian geoscientists.  The results of 26 holes drilled (including re-drilled holes) and assayed to date have produced some of the greatest drill hole intercepts in porphyry copper-gold exploration history including Hole 12 (CSD-16-012) returning 1002m grading 0.76 % copper and 0.77 g/t gold.  The average grade of all metres drilled to date on the project boasts 0.32 % copper and 0.27 g/t gold.  Intensive diamond drilling is planned for the next 12 months with 8 drill rigs expected to be operational by years' end, targeting over 90,000m of drilling per annum.

 

Cascabel is characterised by fifteen (15) 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 3 of the 15 targets, being Alpala Central, Alpala Northwest, and Hematite Hill.  Currently drill testing of the Alpala Southeast target is underway.

 

The Alpala deposit is open in multiple directions and the mineralised corridor marked for drill testing of the greater Alpala cluster occurs over a 2.2km strike length from Trivinio in the northwest to Cristal in the southeast.  The mineralised corridor is known to be prospective over some 700m width.  High priority targets within the Alpala cluster, at Moran approximately 700m to the north of Alpala Central, and at Aguinaga approximately 2.3km north east, are closely modelled by 3D MVI magnetic signatures that currently encompass over 15Bt of magnetic rock.  Based on a strong spatial and genetic relationship between copper sulphides and magnetite, this body of magnetic rock is considered to be highly prospective for significant copper and gold mineralisation, and requires drill testing.

 

SolGold is focussing on extending the dimensions of the Alpala deposit including Hematite Hill, Alpala South East, Cristal, Alpala Northwest, and Trivinio before completing a resource statement and drill testing of the other key targets within the Cascabel concession at Alpala West, Carmen, Alpala East, Moran, Aguinaga, Tandayama-America, Cristal, Parambas, and Chinambicito. 

 

The Company is currently planning further metallurgical testing and completion of an independent Pre-Feasibility Study at Cascabel.   SolGold is investigating both high tonnage open cut and underground block caving operations, as well as a high grade / low tonnage initial underground development towards the economic development of the copper gold deposit/s at Cascabel.

 

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 0.63, determined using an updated copper price of USD3.00/pound and an updated gold price of USD1300/ounce.  True width of down hole intersections are estimated to be approximately 25-50%.

 

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 promising porphyry copper gold targets throughout the Country. SolGold is negotiating external funding options which will provide the Company with the ability to have some of 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, with drill testing of the Normanby project planned for the coming quarter.  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 Guadalcanal exhibits surface lithocap 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 on issue a total of 1,432,306,605 fully-paid ordinary shares, 33,975,884 options exercisable at 28p and 11,975,884 options exercisable at 14p.

 

CAUTIONARY NOTICE

 

This 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.


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
DRLUGUWCCUPMUMC

Companies

Solgold (SOLG)
UK 100

Latest directors dealings