Cascabel Exploration Update

RNS Number : 0572Q

SolGold PLC

24 November 2016

 

24 November, 2016

SolGold plc

Cascabel Exploration Update

Hole 18 Intersecting Visibly Strong Copper Mineralisation

3 Rigs Drilling at Alpala

The Board of SolGold (SolGold, the Company; 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 CSD-16-018 ("Hole 18"), intersecting visible copper mineralisation from 903.9m depth to current depth 1,321.5m.  Intensity of veining and copper mineralisation is increasing with depth, as drilling continues towards a planned depth of 2,300m into the rich lower portions of the Alpala Central deposit.  Intense veining up to 48% of the total rock mass observed.

Ø Drill Hole CSD-16-019 ("Hole 19"), at a current depth of 153m, targeting extensions of the upper portions of the Alpala deposit above Hole 16.

Ø Drill Hole CSD-16-020R ("Hole 20R"), at a current depth of 321.4m, and will act as the parent hole of at least 7 directional drilling "daughter" holes, testing up to 650m below the thickest, richest part of the Alpala Deposit.

Ø Access road to Alpala completed with vehicle access to Alpala Base Camp now fully operational and three drilling rigs operational.

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 and 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.  The deposit at Alpala continues to grow with each new drill hole.  Drilling has focussed on defining the geometry of the Alpala deposit, which is open in all directions.  Over 25,000m of drilling completed to date (Figure 3).

Drill Hole CSD-16-018 ("Hole 18") is currently at a depth of 1,321.5m within intensely veined and mineralised quartz diorite porphyry. Intensity of veining and copper mineralization is increasing with depth with up to 48% veining observed recently at 1,250m.  Hole 18 continues towards a planned depth of 2,300m into the rich and untested lower projections of the Alpala Central deposit down plunge from drill holes 5, 8, 12 and 16.

Examples of drill core intersected to date in Hole 18 show intense porphyry style veining and associated visual copper mineralisation (Figures 4 and 5).  Traditionally copper mineralisation at Alpala has been accompanied by gold on an approximate 1g/t Au to 1% Cu ratio which increases to 2:1 at high copper grades.

Drill Hole CSD-16-019 ("Hole 19"), is a current depth of 153m, and is being drilled to extend the upper portions of the deposit above Hole 16.  Hole 19 is being drilled from the same site as Hole 17, and is targeting upper extensions of strong copper and gold mineralisation intersected in Hole 16, which returned an intersection of 1,145.6m grading 0.63 % copper and 0.78 g/t gold from 430m, including a high-grade core of 373.6m grading 1.00% copper and 1.34 g/t gold.

Drill Hole CSD-16-020R ("Hole 20R"), is a current depth of 321.4m, and will act as the parent hole of up to 7 directional drilling "daughter" holes, testing up to 650m below the thickest, richest part of the Alpala Deposit (Figure 6).  Both drill holes CSD-16-19 & CSD-16-20R are still above the expected top of the deposit in that position.

The original Hole 20 was replaced with Hole 20R at 160m and the completion of the Alpala to Carmen Road as far as the Alpala Camp now enables SolGold to operate efficiently having overcome operational difficulties in delay in regards to completion of the road.

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 / Mr Richard Morrison                                                         Tel: [phone]

SP Angel Corporate Finance LLP (NOMAD and Broker)

[e-mail] 

Mr Dominic Barretto / Ms Harriet Jackson                                                    Tel: [phone]

Yellow Jersey PR Limited (Financial PR)

[e-mail]

Follow us on twitter @SolGold_plc

Figures 1 to 7 can be viewed on the attached link:

 http://www.rns-pdf.londonstockexchange.com/rns/0572Q_-2016-11-24.pdf

NOTES TO EDITORS

SolGold is a Brisbane, Australia based, AIM‐listed (SOLG) copper gold exploration and 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 Newmont trained porphyry expert Dr Steve Garwin.

SolGold is a shortlisted 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 as at November 2016 USD46 million in available cash to continue the exploration and development of its flagship Cascabel Project. 

Coincident with these 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 recently recognised as CEO of the year for South-American resource companies.

Cascabel, the Company's 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.

The investment by Newcrest into 10% of SolGold and also by Guyana Goldfields, Maxit 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, and the gold endowment, location, infrastructure and logistics are all 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 completed over 25,000m² of drilling and expended over USD35 million on the program, corporate costs and investments into Cornerstone.  Intense diamond drilling is planned for the next 12 months with multiple drill rigs.

Cascabel is characterised by fourteen (14) identified targets, world class drilling intersections over in length, and high copper and gold grades, 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 zone at Alpala and Moran is closely modelled by magnetic signatures and currently encompasses over 10Bt of magnetic rock expected to be mineralised with copper and gold.

SolGold is focussing on extending the dimensions of Alpala before completing a resource statement and drill testing the other key targets within the Cascabel concession at Alpala Southeast, 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 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 a number of 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, 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.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

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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