Exploration Update

RNS Number : 5393U

Solomon Gold PLC

18 October 2010

 



                18 October 2010

Solomon Gold Plc

("Solomon Gold" or the "Company")

Exploration Update:

Wide, near surface gold intersections from the Homestead and Kauffmans Prospects, part of the Rannes Gold and Silver Project, Queensland

Solomon Gold (AIM Code: SOLG), exploring for gold and copper in Solomon Islands and Australia, is pleased to announce the assay results from the gold and silver Prospects, Homestead and Kauffmans, part of its 100% owned Rannes Project in Queensland, Australia. 

KEY POINTS

Rannes:

·    Wide, near surface gold intersections.

·    Drill hole results KAU13, 86m at 1.50g/t gold and 15.1g/t silver (1.74g/t gold equivalent) and KAU6, 40m at 1.69g/t gold and 25g/t silver (2.02g/t gold equivalent).

·    Drill hole KAU8, 4m at 7.04g/t gold and 10.8g/t silver (7.21g/t gold equivalent).

·    Drill hole HOM43, 30m at 2.4g/t gold and 33g/t silver (2.83g/t gold equivalent), including 14m at 4.5g/t gold and 54g/t silver (5.17g/t gold equivalent).

·    The current program is designed to increase the resources of gold and silver by close spaced drilling around areas of previous good drilling results.

·    Extended 25km long prospective zone from Police Camp Creek to Kockatunga.

·    Target of approximately 1.0Moz gold equivalent.

Fauro:

·    Fauro surface sampling continues and further results expected over the next few weeks

Commenting on the recent results from the Homestead and Kauffmans Prospect, Nicholas Mather, Solomon Gold Chief Executive, said: "The Company is pleased to report that following the recent stoppage of drilling associated with unseasonal rain, drilling has recommenced on the Rannes Project.  The current program is designed to increase the resources of gold and silver by close spaced drilling around areas of previous good drilling results and is targeting to increase open-pit resources to about half a million ounces of gold equivalent within three-months.

All the results from Homestead and Kauffmans have been received and the best results from Homestead were from drill hole HOM43, 30m at 2.83g/t gold equivalent, including 14m at 5.17g/t gold equivalent, from a depth of 32m.  The Kauffmans results are particularly encouraging in that there are several shoots that could potentially be incorporated into a single open-pit mine design; KAU13, 86m at 1.50g/t gold and 15.1g/t silver, from a depth of 2m and KAU6, 40m at 1.69g/t gold and 25g/t silver, from a depth of 26m.  The highest grade result was from drill hole KAU8, 4m at 7.21g/t gold equivalent (7.04g/t gold and 10.8g/t silver), from a depth of 26m.  The deposit is unclosed by drilling in almost all directions and presents substantial upside to contribute significantly to the 1.0Moz target at Rannes.

The results from the adjacent prospect, Cracklin are expected before the end of the month.  Importantly, gold grades and gold:silver ratios are substantially higher at Homestead and Kauffmans; and Solomon Gold management believe that there is significant potential for extensive gold rich mineralisation at all the Rannes Prospects.

The Company and its resource and reserves consultants are currently assessing revised resources for Crunchie, with additional resources at Homestead and Kauffmans.

The Homestead and Kauffmans Prospects are part of a cluster of gold-silver prospects, that are within 5km of Crunchie, and offer the opportunity to consolidate the group of prospects into an economic project with a central processing plant." he added.

The Rannes Project currently comprises three areas of interest; Central Rannes, Police Camp Creek/Brother and Cooper (see Figure 1 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).   The current drilling program is designed to increase the resources of gold and silver by close spaced drilling around areas of previous good drilling results.  The strategy is to increase the total open-pit resources to about one million ounces of gold equivalent (The gold equivalent is based on a gold to silver ratio of 1 to 64, utilising the average gold and silver price for 2010 year to date.) in the next three-months.

The more accessible prospects, following unseasonal rain, at Homestead, Kauffmans, and Cracklin, part of Rannes Central, have recently been drilled and the assay results from the drilling at Homestead and Kauffmans have been received.  The results from adjacent prospect, Cracklin are expected before the end of the month.  The drill rig is currently at Crunchie engaged in extending the 200,000oz gold equivalent Inferred Resource.  Drilling at the Brother prospect is scheduled to start by month-end, with assay results due mid to late November.  A further drilling campaign will then commence at Homestead and Kauffmans following a review of the assay results received.

Figure 1 and 2 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com shows a plan and section of the results of the Homestead drilling.  Table 1 in the Appendix shows the assay results from the Homestead drilling.  The best results were from drill hole HOM43, 30m at 2.83g/t gold equivalent (2.4g/t gold and 33g/t silver), including 14m at 5.17g/t gold equivalent (4.5g/t gold and 54g/t silver).

Figure 3 and 4 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com shows a plan and section of the results of the Kauffmans drilling.  Table 2 in the Appendix shows the assay results from the Kauffmans drilling.  Excellent results have come from the Kauffmans zone with intersections to 86m at 1.50g/t gold and 15.1g/t silver in KAU13, and 40m at 1.69g/t gold and 25g/t silver in KAU6.  The best results were from drill hole KAU8, 4m at 7.21g/t gold equivalent (7.04g/t gold and 10.8g/t silver).  The Kauffmans results are particularly encouraging in that there are several shoots that can be incorporated into a single open pit.  At this time the deposit is unclosed by drilling in all directions.  Additionally the results at Homestead and Kauffmans signify significant depth potential for higher gold grades and gold:silver ratios.

The presence of anomalous molybdenum in several intersections suggests a deeper porphyry style source for the gold mineralisation.

The Homestead and Kauffmans drilling pattern for this campaign was varied from the previous north south pattern to north-westerly.  This change was designed to prove the south-easterly dip to the main body of mineralisation, and has confirmed that the majority of intersections are close to true widths. Hole HOM11 (see Table 1 in the Appendix) passed underneath the base of the deposit.

The Homestead and adjacent Kauffmans Prospects are part of a cluster of gold-silver prospects that are within 5km of Crunchie, and offer the opportunity to consolidate the group of prospects into an economic project with a proposed central processing plant.  They also offer the opportunity to augment the resources at Rannes with mineralogically similar and shallow depth ore.  The prospects lie along similarly oriented structures dipping through dirty limestones, shales and tuffs at approximately 45 degrees to the southeast.   The Shilo prospect lies about 800m southeast of Kauffmans and appears to be very similar, but has yet to be tested by first pass drilling.  Shilo is a priority target in the current program.

Solomon Gold independent consultants are currently modelling results to determine resource calculations for Crunchie, Homestead and Kauffmans.  Cracklin results will be assessed when received. Additional resources are to be outlined at Cracklin, Brother, and the deeper extensions of Crunchie.

The Company has recently defined the Kockatunga silver prospect, 8km north-north-east of Crunchie.  Kockatunga is interpreted to represent a surface silver rich expression of an extension to the Rannes Central Group of prospects, extending the prospective zone from Police Camp Creek, 25km along the eastern margin of the Bowen Basin in a Carlin style mineral environment.

Fauro Update

At the Company's Fauro Project in the Solomon Islands, work continues with rock chip sampling and mapping ongoing.  The next set of results is expected to be available in the next few weeks.  Sampling and mapping will also commence shortly on the Northern Fauro prospects, previously identified from high bulk stream sediment samples taken in the area.  Analysis of the results from the Ballyorlo Prospect have identified an area 600m by 300m of plus 0.1g/t gold soil samples between two magnetic highs, one 400m by 500m and the other 700m by 300m.  The magnetic anomalies are interpreted to represent porphyry systems from which surface molybdenum anomalies have been sourced.  The zone of gold anomalism is interpreted as lying in the upper levels of a mineralised system above the porphyries.

The Company is currently sourcing a drilling contractor to complete a 9,900m diamond drilling campaign, commencing before the end of the year.  As well as further modelling of the magnetic data to establish the dimensions, and particularly depth of the anomalies with three-dimensional modelling, an IP survey (Induced polarisation: a geophysical technique capable of directly detecting scattered primary sulphide mineralisation) is also planned over selected targets on the Fauro Island.

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 Karl Schlobohm                                                                           Tel: [phone]

Solomon Gold Plc (Company Secretary)

[e-mail]

Mr Ewan Leggat                                                                                Tel: [phone]

Fairfax I.S. PLC (Broker)

[e-mail]

Mr Stephen Weir                                                                               Tel: [phone]

RFC Corporate Finance (Nominated Advisor)

[e-mail]

Mr Dominic Barretto                                                                         Tel: [phone]

Yellow Jersey PR (PR & IR)

[e-mail]

NOTES TO EDITORS

Solomon Gold Plc's original and core gold exploration projects are located on the Solomon Islands and remain a major focus of the Company. However, the Company has extended its strategy to include becoming an integrated gold explorer, developer and miner with projects in lower risk theatres as well as the Solomon Islands.

Solomon Gold carries a diverse portfolio of higher risk high reward exploration projects in the Solomon Islands and lower risk projects which are more advanced towards resource definition in Queensland, where exploration costs are approximately one third of that in Melanesia. Solomon Gold's projects include: Guadalcanal and Fauro (Solomon Islands) and Rannes, Mt Perry and Normanby (Queensland, Australia).

Solomon Gold's Guadalcanal project comprises five prospecting licences covering 300km² and is part of the Guadalcanal Joint Venture ("GJV") with Newmont Ventures Inc ("Newmont").  Newmont took management control of the GJV on 1 April 2010.  Newmont, one of the world's largest gold and copper miners, can earn a 51% interest in Solomon Gold's five exploration licences on Guadalcanal by expending US$6million by 5 March 2012, and may then proceed to 70% by expending a further US$6million by 5 March 2014.

Solomon Gold's Board includes accomplished professionals with strong track records in the areas of exploration, mine development, investment, finance and law. Board and Management have significantly vested interests in the Company holding approximately 19.3% of its issued share capital.

Solomon Gold is based in Brisbane, Queensland, Australia. The Company was admitted to London's Alternative Investment Market in 2006. Further details concerning the Company's key projects and personnel can be found at www.solomongold.com.

APPENDIX: Tables

Table 1: Drilling results from the Homestead Gold and Silver prospect

Drill hole	Easting	Northing	Bearing Degrees mag	Dip Degrees	Depth (metres)	From (metres)	To (metres)	Length (metres)	Intersection Assay Au (g/T)	Intersection Assay Ag (g/T)	Intersection Assay Au+Ag (g/T)
HOM11	205529	7322225	170	60	108	18	72	54	0.41	8	0.51
HOM11A	205535	7322219	350	60	67	0	12	12	0.96	13	1.13
						40	50	10	1.09	13	1.26
HOM41	205525	7321948	050	60	120	72	80	8	1.32	39	1.83
HOM43	205537	7322171	350	60	100	32	62	30	2.4	33	2.83
Incl.						32	46	14	4.46	54	5.17
HOM44	205538	7322128	350	60	120	70	86	16	1.18	12.5	1.34
HOM47	205540	7322100	80	60	85	62	64	2	3.5	21	3.78
HOM50	205606	7322005	260	60	91	44	48	4	1.24	3	1.28
HOM54	205646	7321948	305	60	157	4	10	6	0.66	1.8	0.67
HOM55	205515	7322154	350	60	154	44	56	12	0.75	19.9	1.06
HOM57	205517	7322174	350	60	109	2	38	36	0.62	16.7	0.88
Incl.						20	34	14	1.00	28.3	1.44
						88	92	4	1.65	9	1.79
HOM 59	205545	7322195	305	60	100	12	28	16	0.91	12.4	1.1
						42	48	6	0.90	9.33	1.05
						58	66	8	0.65	22.06	0.99
						70	76	6	1.56	35.7	2.12
HOM 60	205520	7322246	035	60	98	14	30	16	0.38	8.5	0.51
HOM61	205562	7322182	305	60	90	12	42	30	0.86	17.28	1.13

Table 2: Drilling results from the Kauffmans Gold and Silver prospect

Drillhole	Easting	Northing	Bearing Degrees mag	Dip Degrees	Depth (metres)	From (metres)	To (metres)	Length (metres)	Intersection Assay Au (g/T)	Intersection Assay Ag (g/T)	Intersection Assay Au+Ag (g/T)*
KAU4A	20619	7321758	350	60	90	42	60	18	0.47	4	0.47
						74	86	12	0.56	6	0.57
KAU6	205985	73218775	350	60	84	26	66	40	1.69	25	2.02
Incl.						50	54	4	6.35	36	6.82
KAU7	205947	7321926	170	60	90	46	52	6	1.15	3	1.15
KAU8	205961	7321873	305	60	66	26	30	4	7.04	10.8	7.21
KAU9	205927	7321853	305	60	79	60	72	12	1.11	9.7	1.26
KAU10	206003	7321865	305	60	84	56	78	22	1.85	14.5	2.08
KAU11	205974	7321890	305	60	67	0	40	40	1.30	29.6	1.76
KAU12	206017	7321847	030	60	131	76	82	6	0.54	19.5	0.84
KAU13	206003	7321892	305	60	88	2	88 eoh	86	1.50	15.1	1.74
KAU14	206004	7321868	035	60	79	4	12	8	5.26	15.3	5.5
KAU15	206025	7321868	028	60	96	64	68	4	0.23	21.8	0.57
KAU16	206019	7321772	035	60	85	32	34	2	1.38	4.5	1.45
						48	60	12	0.56	10.7	0.73
						64	70	6	3.73	10.7	3.9
KAU17					79	32	38	6	0.32	14.2	0.54
						50	58	8	1.85	16.9	2.11
KAU36	205985	7321829	350	60	120	10	28	18	1.69	7	1.8
						82	96	14	3.7	29	4.08
Incl.						82	90	8	4.73	39	5.24
KAU38	205906	7321817	350	60	120	58	64	6	0.81	5	0.88
KAU39	205940	7321832	350	60	120	74	90	16	0.58	8	0.69

 

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