Cascabel Exploration Update

RNS Number : 6037S

SolGold PLC

22 December 2016

 

22 December, 2016

SolGold plc

("SolGold" or the "Company")

Cascabel Exploration Update

Holes 18 and 19 Intersecting Visible Copper Mineralisation

Rigs 4 and 5 being mobilised

43-101 Technical Report in Preparation

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 CSD-16-018 ("Hole 18"), is at a depth of 1829.7m, extending the rich lower portions of the Alpala deposit, and confirming the deepest mineralised intrusive body discovered at the project to date.  Drilling continues towards a planned depth of 2300m.  Hole 18 has intersected visible copper mineralisation from 903.9m depth to current depth, including a 330m intersection of exceptionally intense quartz - copper sulphide veining, up to 45% of the rock mass, from 1179.7m to 1509.3m.  

Ø Drill Hole CSD-16-019 ("Hole 19"), at a current depth of 727.9m.  Drilling intersected strong visible copper mineralisation from 473.1m depth, which continues at current depth.  Bornite, a 64% copper sulphide mineral, occurs from 668m depth in hole 19.  Bornite is an important metal that raises mill concentrate grades significantly. Hole 19 confirms the shallowest mineralised intrusive body discovered at the project to date, and extends the upper portions of the Alpala deposit above holes 12 and 16.  Drilling continues to the planned depth of 1600m.

Ø Drill Hole CSD-16-020R ("Hole 20R"), is at a current depth of 676.7m, as drilling passes through hydrothermal breccias and volcanic rocks towards the deepest richest portion of the Alpala Deposit, some 600m below known mineralisation.

Ø Mobilization of additional, large, track mounted, deep hole directional Sandvik DE880 top drive drilling rig ("Rig 4") has been initiated.  Engineering and building of a third, custom, deep hole directional man-portable Hydracore drilling rig ("Rig 5") with depth capabilities up to 2600m is underway.

Ø Independent Technical report on the Cascabel Project is in preparation under National Instrument 43-101 and accompanying Documents 43-101F1 and 43-101CP by SRK Exploration in preparation for listing on the Toronto Stock Exchange (TSX) in early 2017.

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 26,850m of drilling has been completed to date (Figure 3).

Drill Hole CSD-16-018 ("Hole 18"), is at a depth of 1829.7m, extending the rich lower portions of the Alpala deposit, and confirming the deepest mineralised intrusive body discovered at the project to date.  Drilling continues towards a planned depth of 2300m.. 

Hole 18 has so far intersected visible copper mineralisation from 903.9m depth to current depth, including a 330m intersection of exceptionally intense quartz-copper sulphide veining, upto 45% of the rock mass, from 1179.7m to 1509.3m, down plunge from drill holes 5, 8, 12 and 16.

Drill Hole CSD-16-019 ("Hole 19"), at a current depth of 727.9m.   Drilling at Rig 2 continues to intersect strong visible copper mineralisation from 473.1m depth. Bornite, a 64% copper sulphide mineral, occurs from 668m depth in hole 19.  Bornite is an important metal that raises mill concentrate grades significantly.

Hole 19 confirms the shallowest mineralised intrusive body discovered at the project to date, as drilling at Rig 1 continues to extend the upper portions of the Alpala deposit above holes 12 and 16.  Drilling continues to the planned depth of 1600m.

Drill Hole CSD-16-020R ("Hole 20R"), is at a current depth of 676.7m, as drilling on Rig 3 progresses towards testing the deepest richest portion of the Alpala Deposit, some 600m below known mineralisation.

Mobilization of additional, large, track mounted, deep hole directional Sandvik DE880 top drive drilling rig ("Rig 4") has been initiated, with an extensive multi-hole directional drilling program planned to commence in February 2017, at the Alpala Deposit.

Engineering and building of a third, custom, deep hole directional man-portable Hydracore drilling rig ("Rig 5") with depth capabilities up to 2600m is underway at the Hubbard Drilling workshops in Cuenca, Ecuador.  Rig 5 is planned to commence testing of the exciting Alpala South area, around 1km southeast of the current drilling area at Alpala.

Planned drilling for the coming quarter focusses on expansion of the Alpala deposit as well as testing of the south easterly extensions of the greater Alpala system, at Hematite Hill and Alpala Southeast. (Figure 4).

An Independent Technical report on the Cascabel Project is nearing completion under National Instrument 43-101 and accompanying Documents 43-101F1 and 43-101CP by SRK Exploration in preparation for listing on the Toronto Stock Exchange (TSX) in early 2017.

Examples of selected mineralisation in drill core intersected to date in Holes 18 and 19 show intense porphyry style veining and associated visual copper mineralisation (Figures 5 and 6).

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

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 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 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 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.

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 27,000m of drilling and expended over USD 35M 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 test 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.

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.

 http://www.rns-pdf.londonstockexchange.com/rns/6037S_-2016-12-22.pdf

Figure 1:  Regional Setting of the Cascabel Project, in the under-explored Ecuadorian portion of the Andean Copper Belt.

http://www.rns-pdf.londonstockexchange.com/rns/6037S_1-2016-12-22.pdf 

Figure 2: Location of Cascabel project in northern Ecuador, highlighting the significant capital advantages held by the project, with proximity to ports, road infrastructure, hydro-electric power stations and the trans-continental power grid.

http://www.rns-pdf.londonstockexchange.com/rns/6037S_2-2016-12-22.pdf

Figure 3: Drill hole location plan, showing existing drill holes (with colour coded copper equivalent grades), as well as current holes 18, 19, and 20R (with current depths in black and remaining planned hole path in red). Also shown are surface structural traces (in thin black), topography, access and drainage at Alpala.

http://www.rns-pdf.londonstockexchange.com/rns/6037S_3-2016-12-22.pdf

Figure 4: Drill hole location plan, showing existing drill holes (with colour coded copper equivalent grades), as well as current holes 18, 19, and 20R (with current depths in black and remaining planned hole path in red).  Planned drill holes for the coming quarter at Alpala are also shown in red.

http://www.rns-pdf.londonstockexchange.com/rns/6037S_4-2016-12-22.pdf

Figure 5: Examples of selected mineralisation encountered in Hole 18 to date.

http://www.rns-pdf.londonstockexchange.com/rns/6037S_5-2016-12-22.pdf

Figure 6: Examples of selected mineralisation encountered in Hole 19 to date.

 

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