Fauro Exploration Update

RNS Number : 4167R

Solomon Gold PLC

03 November 2011

 



            3 November 2011

Solomon Gold Plc

("Solomon Gold" or the "Company")

Mineralised Intersections at the Fauro Island Project, Solomon Islands

Solomon Gold (AIM Code: SOLG), active in four drill programs for gold, silver and copper in Solomon Islands and Australia, is pleased to announce progress of drilling and reinterpretation work at the Company's 100% owned Fauro Project, Solomon Islands.

HIGHLIGHTS

·    Diamond drilling continues at the Company's Prospects on Fauro Island.

·    Diamond drill hole FDDH003 at the Meriguna Prospect, intersected 16m @ 1.11g/t gold from 3m and 2m @ 1.57g/t gold from 50m.

·    Diamond drill hole FDDH005 at the Ballyorlo Prospect intersected 266m @ 0.16g/t gold and 0.03% copper from 20m (incl. 21m @ 0.50g/t gold and 0.05% copper from 63m, and also 7m @ 0.50g/t gold and 0.05% copper from 163m).

·    Diamond drill hole FDDH006 at Ballyorlo East intersected 157m @ 0.42g/t gold from 38m (incl. 45m @1.07g/t gold and 11m @4.03g/t gold from 38m, and 5m @ 0.70g/t gold from 136m).

·    Diamond drill hole FDDH007 at Ballyorlo West terminated at a depth of 544m, assay results are pending.  Numerous zones of visible disseminated copper mineralisation were encountered.

·    Diamond drill hole FDDH008 at Ballyorlo West terminated at a depth of 335m, assay results are pending.

·    Ballyorlo Prospect Trench BLBATR1; 16m @ 1.6g/t gold, 5.9g/t silver and 0.03% copper, including 2m @ 6.18g/t gold, 19.2g/t silver and 0.03% copper.

·    Shallow drillhole program for Ballyorlo, Kiovakase and Meriguna to test for surface oxide gold resource.

·    A review and reinterpretation with an independent porphyry / epithermal consultant, of the data associated with geophysics, soil, rock chip, trenching and drilling progress has been completed for the Ballyorlo, Kiovakase and Meriguna Prospects, in-order to generate on-going drill targets and determine the direction of the on-going exploration program.

The Fauro Project covers seven currently identified prospects (Ballyorlo, Kiovakase, Meriguna, Bataha, Ballteara and two at Northern Fauro) of mineralised volcanic rim on the western side and a further two prospects the eastern side, over Piru and Masamasa Islands (see Figure 1, in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).

The results from holes FDDH001 and FDDH002, drilled at the Meriguna Prospect have been previously announced on 18 February 2011 and 18 March 2011 respectively (See 'Latest News' section on the website, www.solomongold.com).  Hole FDDH003, also at the Meriguna Prospect, intersected 16m @ 1.11g/t gold from 3m and 2m @ 1.57g/t gold from 50m.  The final hole length was 350m.

Diamond drill hole FDDH005 intersected 266m @ 0.16g/t gold and 0.03% copper from 20m (incl. 21m @ 0.50g/t gold and 0.05% copper from 63m, and also 7m @ 0.50g/t gold and 0.05% copper from 163m).  FDDH005 was sited to intersect Induced Polarisation ("IP") anomalies outlined at the Fauro Project.  The hole intersected copper mineralisation with minor chalcopyrite in veins, breccia matrix and disseminations within volcanic host rocks.  Rock types in the hole were very encouraging and confirm that Ballyorlo is a gold-copper-molybdenum mineralised hydrothermal system hosted within a cluster of steeply inclined porphyritic intrusives and complex intrusive breccias.  Several mineralised porphyry clasts have been identified within polymictic breccias in drill holes FDDH006, FDDH007 and FDDH008 which indicates presence of mineralised porphyry's at depth in both locations Ballyorlo East, as well as Ballyorlo West.

FDDH006 at Ballyorlo East was sited to test a north-south structural corridor, the Baura structural corridor, within the magnetic high where it is coincident with the eastern edge of a strong IP Chargeability High.  The Baura Structural corridor is defined by soil gold anomalism at the 100ppb Au level, as well as the presence of an elongate polymictic breccia body.  The hole tested shallow levels of this regional structure and returned broad gold anomalism (157m @ 0.42g/t gold, incl. 45m @ 1.07g/t gold, and 11m @ 4.03 g/t gold).  The "Baura" Structural Corridor is believed to be a regional conduit for gold mineralisation and strong magnetic and chargeability response at depth indicates potential for deep porphyry gold mineralisation.

Two holes have been drilled in the western part of Ballyorlo, (see Figures 2, 3 and 4, in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com) FDDH007 and FDDH008.  FDDH007 has tested the porphyry target in southwest Ballyorlo, and assay results are awaited.  The target is characterised by a prospective magnetic high, >500ppm copper in soil, up to 0.6% copper in rock and chip results.  The second hole, FDDH008 has tested a gold-rich quartz-silica-pyrite vein breccia zone in northwest Ballyorlo, which is characterised by a prospective magnetic high, >200ppm copper in soil, up to 20.8g/t gold in rock and a small dacitic intrusion within andesitic volcanic rocks. The hole was drilled to a depth of 334.5m and assay results are pending (see Figures 2, 3 and 4, in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).

Drilling of diamond drill hole FDDH007 was terminated at a depth of 544m within host volcanic rock.  The assay results are pending, but visible mineralisation in the hole was extensive albeit minor with trace chalcopyrite and molybdenite noted to occur in veins and disseminations within host rock throughout the hole from as shallow as 80m to a depth of 540m.  Rare traces of bornite, a copper rich sulphide, were noted at 180m and 200m.

Trench BLBATR1 on the Ballyorlo Prospect returned 16m @ 1.6g/t gold, 5.9g/t silver and 0.03% copper, including 2m @ 6.18g/t gold, 19.2g/t silver and 0.03% copper.  A series of east-west and north-west / south-east trending quartz veins of between 5mm and 8mm thickness were also sampled and returned gold grades between 0.1g/t and 4.2g/t, as well as silver up to 19.7g/t and copper up to 0.3%.  More trenching results are pending from the recent trenching campaign over the Prospect.

A recent review and reinterpretation with an independent porphyry / epithermal consultant, of the data associated with geophysics, soil, rock chip, trenching and drilling has been completed for the Ballyorlo, Kiovakase and Meriguna Prospects, in-order to generate on-going drill targets and determine the direction of the on-going exploration program.

Solomon Gold is encouraged with the recent results, and with the independent review and the exploration team on Fauro is optimistic of further success.

Ballyorlo and Kiovakase Prospects

The Ballyorlo and Kiovakase Prospects are now viewed to form part of the same intrusion-related mineral system.  The area is underlain by a variably porphyritic intrusive complex and marginal intrusion breccias.  The major mineralised structural features consist of west-north-westerly and northerly trends; secondary sets consist of westerly and north-north-easterly and north-westerly trends.  The intersections of west-north-westerly and northerly trending lineaments localise gold-copper-molybdenum mineralisation (see Figure 5, in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).

At the Ballyorlo and Kiovakase Prospects, mineralised quartz veins discovered are typically less than 10cm thick, with the exception of the quartz-molybdenite-pyrite veins up to 1.2m thick at Moly Ridge (within the Ballyorlo Prospect) and quartz-silica-pyrite+sphalerite vein breccia zones up to 30cm wide in the north-western part of the Ballyorlo prospect (see Figure 6, in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).

The scale of copper, gold and zinc geochemical zoning suggests that west Ballyorlo is the centre of the hydrothermal system and is underlain by a potential porphyry copper-gold intrusion.

This porphyry target model is supported by alteration zonation at Ballyorlo and three-dimensional models of the airborne magnetic data, IP chargeability and resistivity results and simplified geology.

Assays returned from diamond drill hole FDDH004 returned no significant mineralisation.  The hole was drilled at Moly Ridge in Central Ballyorlo to a depth of 500m.

In summary:

·    Dacitic intrusions, intrusion breccias and adjacent volcanics host copper-gold mineralisation.

·    High-grade gold results from rock-float and narrow zones of quartz veins and silica-breccias.  Up to 169g/t gold (float) and 15g/t gold (outcrop) at Kiovakase and 20.9g/t gold (float) at NW Ballyorlo (outcrop results pending) indicate surface oxide gold potential.

·    Hydrothermal alteration and metal zoning indicate a potential porphyry system centred in west Ballyorlo.  This is supported by increasing copper/zinc, silver/gold, silver/gold ratios and molybdenum in rock towards southwest Ballyorlo from peripheral gold bearing zones at Kiovakase and east Ballyorlo.  Copper in soil >500ppm covers approximately 370m (N-S) by 300m (E-W) zone in southwest Ballyorlo with copper in rock-float up to 0.6%.

Meriguna Prospect

At the Meriguna Prospect, the major rock type consists of porphyritic intrusions, breccia and other volcanic rocks.  Zones of quartz veins and silica-quartz-clay-pyrite altered and brecciated rock, including dacite dikes, have been mapped to be up to 3m thick.  Most of these mineralised zones strike westerly to west-north-westerly and dip ~60^o towards the north.  The zones of quartz veins and gold mineralisation discovered to date lie in a zone of intersection between northerly, westerly and north-easterly trending topographic and magnetic lineaments (see Figure 8, in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).

Geochemical soil gold results >100ppb form a mostly coherent zone that extends approximately 1,000m (north-south) by 500m (east-west) and is open towards the southwest (see Figure 9, 10 and 11, in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).  The southern portion of this soil anomaly contains soil values of >500ppb gold near zones of quartz veins and silica-pyrite breccias lodes.  Gold trench samples were up to 2m at 97.6g/t gold from zones of quartz veins and silica-pyrite breccia lodes near the existing drill hole collars FDDH001 to FDDH003; outcrop gold was up to 13.8g/t gold from a zone of silica-clay-pyrite altered breccia that lies about 800m to the north.

An analysis of copper results in soils, drill holes, and rock chip samples and the relationship to potassium anomalism indicates that the porphyry system is centred on Ballyorlo west (see Figure 12, in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).

A comparison of the airborne magnetic results and IP chargeability results (see Figure 13, in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com) show that the three drill holes (FDDH001 to FDDH003) tested a northerly-trending magnetic high and a moderately chargeable zone.  A magnetic target with flanking IP chargeability zones at Meriguna presents a copper gold porphyry target which is yet to be drill tested.

It is proposed to test the porphyry copper-gold target by a drill hole inclined -60^o towards the south-southwest to a depth of ~600m.  The steeply north-dipping, gold rich silicified breccia outcrops located about 130m north of the collars for FDDH002 and FDDH003 were not intersected in either of these two drill holes.

In summary:

·    Dacitic intrusions, intrusion breccias and volcanic rocks host gold-copper mineralisation.  Northerly-, north-westerly- and westerly-trending faults- and fractures at Meriguna have introduced mineralisation.

·    High-grade gold results from rock float and zones (<3m wide) of silica-breccias and veins.  Gold >100ppb in soil exceeds 1,000m (N-S) by 500m (E-W), open to the southwest.  Up to 173g/t gold (float), 48.6g/t gold (outcrop) and 2m at 96.7g/t gold (trench) with silver/gold ratio values <5.

·    Major northerly-trending magnetic high and IP chargeability high partially tested in holes FDDH001 to FDDH003.  A western magnetic high is flanked by zones of elevated chargeability and has yet to be drill tested.

Current and Future work

At the Ballyorlo Prospect, drill hole FDDH008 has commenced testing a gold-rich quartz-silica-pyrite vein breccia target at NW Ballyorlo.  The hole is being drilled at -55^o towards 160^o for a depth of ~300m at NW Ballyorlo.

At the Meriguna Prospect, several holes are proposed to test near surface gold targets in the south.  Gold targets to be tested by holes drilled at -55^o towards the south to depths <200m from a collar site(s) located ~50m north of the WNW-striking, steeply NE-dipping silica-pyrite breccia outcrop near FDDH002 and FDDH003.

Further detailed mapping and sampling is planned for Meriguna.

The Company is currently sourcing a suitable man-portable rig capable of drilling to depths of 150m as a means of testing the near-surface geometry and depth-extent of gold bearing outcropping quartz veins and silica-breccia lodes in existing prospects and new areas to be explored elsewhere in the Fauro Island Project.

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 Executive Director 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 Guadalcanal Island, Solomon Islands and are the major focus of the Company.  The Company holds a comprehensive and extensive tenement position on the main island of Guadalcanal where its JV partner, NVL Solomon Islands Limited (a subsidiary of NYSE-listed Newmont Mining Corporation) can earn a 51% interest in the project by expending US$6million by 4 March 2012, and may elect to expend a further US$6million (total US$12million) to earn a further 19% to a total 70% by 4 March 2014.  The GJV has outlined high priority gold-copper porphyry targets at Chikora, Mbetilonga, and Kuma.

The discovery in September 2010 of extensive and rich gold mineralisation on Fauro Island, just south east of Bougainville Island in neighbouring Papua New Guinea, presents Solomon Gold with further potential for a world class gold and copper-gold-molybdenum discovery on the south west Pacific Rim of Fire.  The region is one of the world's most strongly endowed gold and copper provinces hosting, amongst others; Grasberg, Lihir, Panguna and Ok Tedi, each with in excess of 40Moz gold equivalent metal endowment.

Solomon Gold has extended its strategy to aim at becoming an integrated gold explorer, developer and miner with projects in lower risk theatres as well as the Solomon Islands.

Solomon Gold's projects in Queensland include Rannes, Mt Perry and Normanby.  At Rannes, the Company has outlined a 30km long prospective zone in a 200km long trend on the eastern edge of Queensland's Bowen Basin in the same geological setting as Newcrest's 100,000 ounce per year Cracow Gold Mine.  This extensive exploration licence position hosts three mineralised projects at Cooper, Central Rannes and Police Camp.  The exploration area is believed to host mineral systems which are geologically similar to the Carlin trend in Nevada USA.  At Central Rannes, the Company has encountered potentially economic mineralisation in five different prospects targeted to yield at least 2 Moz.  The total Solomon Gold Inferred Mineral Resource estimate following the continued work at its Rannes Projects, Crunchie, Kauffmans-Homestead, Brother and Cracklin Rosie Prospect is 21.7Mt at 1.0g/t gold equivalent for 675,779oz of contained gold equivalent (379,739oz gold and 11.97Moz silver), based on a gold to silver ratio of 1 : 40 and a 0.30g/t gold equivalent cut‐off grade.

At Mt Perry, the Company is investigating an area of approximately 1,500km² hosting over 50 historic mines and workings near Newcrest's Mt Rawdon Gold Mine.  Mt Perry has yielded potentially economic drill intersections on nine of the ten prospects tested to date.

Solomon Gold's Board includes accomplished professionals with strong track records in the areas of exploration, mine development in Australia and Melanesia, investment, finance and law.  Board and Management have significantly vested interests in the Company holding approximately 17.5% of its issued share capital.

Solomon Gold is based in Brisbane, Queensland, Australia.  The Company listed on London's Alternative Investment Market in 2006, under the AIM Code 'SOLG' and currently has 284,623,489 shares on issue and 11,264,000 options exercisable at 50p on issue.  Further details concerning the Company's key projects and personnel can be found at www.solomongold.com.

 

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