Guadalcanal Joint Venture Update

RNS Number : 9618L

SolGold PLC

11 September 2012

 



11 September 2012

SolGold Plc

("SolGold" or the "Company")

GUADALCANAL JOINT VENTURE UPDATE

Pursuant to the announcement made by the Company on 2 August 2012, the Board of SolGold plc (AIM code: SOLG) is pleased to advise that, together with NVL Solomon Islands Limited("NVL"), a subsidiary of Newmont Mining Corporation (NYSE:NEM), it is seeking expressions of interest for the divestment of the Guadalcanal Joint Venture ("GJV") project in the Solomon Islands.

NVL is managing a marketing exercise and SolGold is being kept up to date on developments.

Offers will be reviewed and decisions as to next steps will be taken at that time.

The GJV comprises 5 Prospecting Licences on the island of Guadalcanal, Solomon Islands.  Expenditures to date has been reviewed and NVL has earned a 74% interest in the GJV under the terms of the JV agreement having expended some US$19 million to date since the GJV commenced in April 2009.

The Board would like to reaffirm to shareholders that the consideration of the sale of its minority 26% interest in the GJV is aligned with the Board's previously stated strategy of identifying and securing, at competitive commercial rates, potential Tier 1 gold-copper assets in gold-copper belts of the world.  SolGold is strengthening its gold-copper portfolio and consideration of a sale of the GJV, or a review if it is not sold, is aligned with that position.

Malcolm Norris, CEO of SolGold commented: "Our position with respect to our interest in the GJV is such that we can consider options as they are presented to us.  The Board believes that the Solomon Islands is an area that has the potential to host large mineral deposits and continues to look at opportunities in the region that would complement the SolGold portfolio.  We will continue to update the market on developments with the GJV marketing process." 

Exploration is ongoing at the exciting Cascabel gold-copper-silver property in Ecuador, and at the 100% owned Rannes gold-silver project in southeast Queensland, Australia.

By order of the Board

Karl Schlobohm

Company Secretary

Contacts:

Mr Karl Schlobohm                                                                                                        Tel: [phone]

SolGold Plc (Company Secretary)

[e-mail] 

Mr Ewan Leggat                                                                                                                Tel: [phone]

Fairfax I.S. PLC (Broker)

[e-mail]  

Mr Stephen Weir                                                                                                            Tel: [phone]

RFC Ambrian Limited (Nominated Advisor)

[e-mail]  

Mr Dominic Barretto                                                                                                      Tel: [phone]

Yellow Jersey PR (PR & IR)

[e-mail]  

NOTES TO EDITORS

SolGold's exploration projects are located in northern Ecuador, Australia, and the Solomon Islands. In Australia, they comprise the Rannes, Mt Perry, Cracow West and Normanby Projects, all in southeast Queensland.  In the Solomon Islands they comprise the Fauro Project (located on Fauro Island), and the Guadalcanal Joint Venture with Newmont Mining Corporation, and in Ecuador a JV with Cornerstone Capital Resources on the Cascabel gold-copper project.

In July 2012, SolGold and Cornerstone Capital Resources Inc. announced that they had signed a Definitive Option Agreement whereby SolGold may acquire up to 85% of Cornerstone's 100% owned 5,000 hectare Cascabel gold-copper-silver property in northern Ecuador.

The Cascabel project is located approximately 120 km north of Ecuador's capital, Quito, 20 km south of the Colombian border, and 75 km inland from the coastal city of San Lorenzo.  The gold-copper porphyry project is located within the Andean western cordillera, host to numerous Tier 1 world class copper-gold deposits through Chile, Peru, Ecuador and Colombia.

At the Rannes project SolGold has announced Indicated and Inferred resources of 18.7 million tonnes at 0.9 g/t gold equivalent (gold + silver) for 550,146 ounces of gold equivalent (296,657 ounces of gold and 10,137,736 ounces of silver; see announcement dated 23 May 2012 for details of the resource statement and gold equivalent ratios).  The 2012 exploration program, including planned drilling to define new ore positions and grow the resource, is underway.

Exploration continues at Mt. Perry, Normanby and Cracow West.

In the Solomon Islands, the 2012 exploration program on the Fauro project has been delayed while a JV partner is sought to pursue drilling of gold-copper targets defined in the 2011 exploration program.  The 2012 Guadalcanal Joint Venture with NVL Solomon Islands Limited (a subsidiary of NYSE-listed Newmont Mining Corporation) is now seeking expressions of interest for possible divestment.

SolGold's strategy is to be an integrated gold and copper discoverer, developer and miner.

SolGold's Board includes accomplished professionals with strong track records in the areas of exploration, mine development in Australasia and Melanesia, investment, finance and law.  Board and Management have significantly vested interests in the Company, holding approximately 16.3% of its issued share capital.

SolGold 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 a total of 346,715,267 fully-paid ordinary shares, 1,070 Convertible Redeemable Preference Shares, 9,472,000 options exercisable at 50p, 1,250,000 options exercisable at 28p and 1,250,000 options exercisable at 14p on issue.  Further details concerning the Company's key projects and personnel can be found at www.solgold.com.au.

Qualified Person

Information in this report relating to the exploration results, gold:silver ratios and cut-off grades is based on data reviewed by Mr Malcolm Norris (B.Sc. Hons, MSc), the Chief Executive Officer of the Company.  Mr Norris 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 Norris consents to the inclusion of the information in the form and context in which it appears.

 

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