High Grade Copper Results at Timbara

RNS Number : 7586C

SolGold PLC

24 January 2018

 

24 January 2018

SolGold plc

("SolGold" or the "Company")

High Grade Copper Results Returned from Newly Discovered Mineralised Prospects in the Timbara Project.

The Board of SolGold (AIM code: SOLG) is pleased to provide an update on exploration at its 100% owned Timbara Project, in Southern Ecuador. The prospect is held in the 100% owned subsidiary Green Rock Resources ("Green Rock").

HIGHLIGHTS:

Ø Two new outcrops of porphyry style copper mineralisation discovered at the Timbara Project.

Ø The Timbara Project is of Jurassic age similar to the nearby Fruta del Norte, Mirador and Santa Barbara deposits.

Ø Results from rock chip samples collected during stream reconnaissance at the Timbara Project include:

o 28.89% Cu, >100g/t Ag*  in sample R03000252 (Timbara 4)

o 4.00% Cu,   >100g/t Ag*  in sample R03000260 (Timbara 4)

o 2.94% Cu                           in sample R03000219 (Timbara 1)

o 2.32% Cu                           in sample R03000236 (Timbara 1)

Ø The location and orientation of mineralised veins may represent a continuation of the highly prospective porphyry corridor identified on SolGold's La Hueca Project.

* Overlimit assay result

References to figures and tables relate to the version of this release on the Company's website (www.solgold.com.au) or visible in PDF format by clicking the link below:

http://www.rns-pdf.londonstockexchange.com/rns/7586C_-2018-1-24.pdf

Introduction:

SolGold continues aggressive exploration of its extensive tenement portfolio in Ecuador with the goal of becoming a tier 1 copper producing company through organic growth.  SolGold now has multiple field teams in operation, utilising a specialised method of rapid prospect recognition in each of its four regional subsidiary companies.  Led by highly experienced senior geologists, teams have successfully located copper occurrences in six projects indicative of large mineralised porphyry systems. 

The Timbara Project is located in southern Ecuador on the prolific Andean Copper belt which is renowned as the production base for nearly half of the world's copper, (Figure 1).  SolGold holds a 100% interest in the projects through its Ecuadorean subsidiary company, Green Rock Resources S.A.  Timbara lies on Ecuador's eastern Jurassic Belt, which contains the Fruta del Norte epithermal gold deposit (14 million ounces Au), the Mirador copper porphyry deposit (3 million tonnes Cu) and the Santa Barbara gold-(copper) porphyry deposit (8 million ounces Au).

Exploration Activities & Results

Following the Company's announcement of 29 November 2017 in relation to the discovery of porphyry style mineralized outcrops in the Timbara 2 concession, two Green Rock field teams have completed rapid first pass exploration on the other three Timbara concessions.  Exploration activities include stream sediment, panned heavy concentrate and rock chip sampling along with detailed mapping.  SolGold's method of rapid evaluation of project areas is again producing exciting early results, establishing new porphyry copper camps for follow-up exploration.

Timbara 4 Concession

A narrow bornite-chalcopyrite vein trending northeast - southwest, outcrops in a 25 metre wide zone in chlorite altered diorite with densely fractured, quartz-hematite veins (Figure 3).  The sample taken of the vein returned an outstanding result of 28.89% Cu.  The vein extends into surrounding creeks and streams.  This area will undergo further detailed follow-up prospection by technical field teams. 

Timbara 1 Concession

A new porphyry style mineralised outcrop has been recently discovered in Timbara 1.  The outcrop has been identified as an intrusive granodiorite comprising narrow quartz veins rich in Pyrite, Chalcopyrite, Covellite and Bornite.  These veins also trend northeast - southwest, the same as the high-grade bornite vein in Timbara 4 (which returned 28.89% Cu). 

Future Work Program

Whilst Green Rock field teams have moved on to other projects in keeping with SolGold's priorities of rapid first pass prospection of all granted concessions, planning is underway to return technical teams to these two outcrops and revisit other mineralised outcrops identified in the Timbara 2 concession.  SolGold's exploration focus will transition to targeted systematic mapping and rock chip sampling of anomalous streams and outcrops to gain a better understanding of the geological controls, hydrothermal alteration and style of copper mineralisation at Timbara.  An aeromagnetic survey will also be carried out over the Timbara Project.

Timbara Rock Chip Samples - Significant Results
Sample	easting	northing	elevation	Cu_ppm	Ag_ppm
R03000252	730513	9529782	1835	288900	>100
R03000260	730513	9529782	1835	40000	>100
R03000219	739804	9546256	1875	29350	3.73
R03000236	739792	9546275	1883	23200	1.92
R03000254	731008	9529960	1953	17830	7.91
R03000256	730587	9529755	1867	15990	2.57
R03000253	731023	9529980	1936	13330	100
R03000192	730976	9532522	1741	5790	0.54
R03000190	730971	9532523	1741	5460	0.7
R03000263	730514	9529780	1835	5230	0.66
R03000255	731373	9530396	2118	3500	0.95

Table 1: Timbara Rock Chip Samples - Significant Results.

Market Abuse Regulation (MAR) Disclosure

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

Qualified Person:

Information in this report relating to the exploration results is based on data reviewed by Mr Jason Ward (B.Sc. Hons Geol.), the Chief Geologist of the Company.  Mr Ward is a Member of the Australasian Institute of Mining and Metallurgy, holds the designation MAusIMM (CP), and has in excess of 20 years' experience in mineral exploration and is a Qualified Person for the purposes of the relevant AIM and TSX Rules.  Mr Ward 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 (Chief Executive Officer)                                                             [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 (Broker)

[e-mail] 

Follow us on twitter @SolGold_plc

NOTES TO EDITORS

SolGold is a Brisbane, Australia based, dual LSE and TSX‐listed (SOLG on both exchanges) copper gold exploration and future 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 porphyry copper and gold expert Dr Steve Garwin.

In October 2017, at the Mines and Money Americas Conference in Toronto, SolGold's Nicholas Mather won the award for the CEO of the Year - Exploration, Latin America.  SolGold won the Exploration Award for Latin America, and Ecuador won the Country Award for Latin America.  Each party then duly won the 2017 award for each respective category on a global basis at London Mines and Money on 30 November 2017.

The Company announced USD54m in capital raisings in September 2016 involving Maxit Capital LP, Newcrest International Ltd and DGR Global Ltd, and a USD41.2m raising in June of 2017 largely from Newcrest International with USD1.2m raised from Ecuadorean investors.  All of these raisings were undertaken at substantial premiums to previous raisings.  In November 2017 SolGold raised a further £45m at 25p per share, placed with institutions and Newcrest pursuant to their anti-dilution rights.  SolGold currently has circa USD110m in available cash to continue the exploration and appraisal of its flagship Cascabel Project, and with which to conduct regional exploration programs on its 77 other 100%-owned projects in its wholly owned subsidiary companies.

Mr Craig Jones joined the SolGold Board on 3 March 2017, nominated to the Board of SolGold by Newcrest Mining, now a 14.54% shareholder in SolGold.  Mr Jones is a Mechanical Engineer and is currently the Executive General Manager Wafi-Golpu (Newcrest-Harmony MMJV).  He has held various senior management and executive roles within the Newcrest Group, including General Manager Projects, General Manager Cadia Valley Operations, Executive General Manager Projects and Asset Management, Executive General Manager Australian and Indonesian Operations, Executive General Manager Australian Operations and Projects, and Executive General Manager Cadia and Morobe Mining Joint Venture.  Prior to joining Newcrest, Mr Jones worked for Rio Tinto.

Cascabel, SolGold's 85% owned "World Class" (Refer www.solgold.com.au/cautionary-notice/) flagship copper‐gold porphyry project, is located in northern 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 5% of TSX‐V‐listed Cornerstone Capital Resources ("Cornerstone"), which holds the remaining 15% of ENSA, the Ecuadorian registered company which holds 100% of the Cascabel concession.  Subject to the terms of existing agreements, Cornerstone is debt financed by SolGold for its share of costs to completion of a Feasibility Study ("Financing Option").

In terms of repayment, SolGold shall receive 90% of Cornerstone's share of earnings or dividends from ENSA or the Tenement to which Cornerstone would otherwise be entitled until such time as the amounts so received equal the aggregate amount of expenditures incurred by SolGold that would have otherwise been payable by Cornerstone, plus interest thereon from the dates such expenditures were incurred at a rate per annum equal to LIBOR plus 2 per cent until such time as SolGold is fully reimbursed.

The investments by Newcrest for 14.54% of SolGold endorses Ecuador as an exploration and mining destination, the management team at SolGold, the dimension, size and scale of the growing Alpala deposit, and the prospectivity of Cascabel and its multiple targets.  The gold endowment, location, infrastructure, and logistics are important competitive advantages offered by the project.  Cascabel is characterised by fifteen (15) identified targets, "World Class" drilling intersections over 1km in length at potentially economic grades, and high copper and gold grades in richer sections, 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 completed geological mapping, soil sampling, rock saw channel sampling, geochemical and spectral alteration mapping over 25km², along with an additional 9km² of Induced Polarisation and 14km² Magnetotelluric "Orion" surveys over the Alpala cluster and other targets at Aguinaga, Parambas, Tandayama-America, Moran and Chinambicito.

SolGold has completed over 70,000m of drilling and expended over USD73M in Ecuador, which includes Cascabel exploration, regional exploration, corporate costs and investments into Cornerstone.  This has been accomplished with a workforce of up to 260 Ecuadorean workers and geoscientists, and 6 expatriate Australian geoscientists.  The results of 60 holes drilled (including re-drilled holes, daughter holes and current holes) and assayed to date have produced some of the greatest drill hole intercepts in porphyry copper-gold exploration history, as indicated by Hole 12 (CSD-16-012) returning 1560m grading 0.59% copper and 0.54 g/t gold including, 1044m grading 0.74% copper and 0.54 g/t gold.

The average grade of all metres drilled to date on the project, including non-mineralised intersections, currently stands at 0.30% copper and 0.24 g/t gold.  Intensive diamond drilling is planned for the next 12 months with 12 drill rigs operational, targeting over 120,000m of drilling in 2018.

SolGold has drill tested 5 of 15 copper-gold targets delineated in the 50km² tenement with a focus on Alpala. 

 

Further drill testing at Alpala will focus on:

·     Extending and infilling the Alpala Central area with Rigs, 1, 6 and 5.

·     Expanding the system at Alpala Northwest and Trivinio with Rigs 8, 9, 10, 11, and 12.

·     Testing extensions of the system at Alpala Southeast with Rigs 2, 3, and 4.

·     Testing geochemical and magnetic targets at Alpala West and Carmen with Rig 7.

There are currently 12 drilling rigs active at Alpala. 

The Alpala deposit is open in multiple directions and the mineralised corridor marked for drill testing of the greater Alpala cluster occurs over a 2.2km strike length from Trivinio in the northwest to Cristal in the southeast.  The mineralised corridor is known to be prospective over up to 800m width.

The remainder of the targets are scheduled for testing during 2018, subject to ongoing technical assessment, and completion of ground magnetic modelling and Spartan Orion deep IP surveys.

The Company is currently planning further metallurgical testing and completion of an independent Preliminary Economic Assessment and Pre-Feasibility Studies at Cascabel.  SolGold is investigating both high tonnage open cut and underground block caving operations, as well as a high grade / low tonnage initial underground development towards the economic development of the copper gold deposit/s at Cascabel.

Drill hole intercepts have been updated to reflect current commodity prices, 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 0.63, determined using an updated copper price of USD3.00/pound and an updated gold price of USD1300/ounce.  True widths of down hole intersections are estimated to be approximately 25-50%.

Following a comprehensive review of the geology and prospectivity of Ecuador, SolGold and its subsidiaries have several applications for additional exploration licences in Ecuador over a number of promising porphyry copper gold targets throughout the Country.

SolGold, through its 4 subsidiary companies, has 100% ownership of 77 granted concessions throughout Ecuador.  Each subsidiary company has technical teams, led by experienced senior geologists, on the ground prospecting granted tenements and collecting baseline data, whilst regional geophysics surveys are being planned.  Significant copper occurrences have been identified at numerous projects to date, including La Hueca, Machos, Rio Armarillo, Sharug, Porvenir and Timbara.

In Queensland, Australia the Company is evaluating the future exploration plans for the Mt Perry, Rannes and Normanby projects, with drill testing of the Normanby project planned for the coming quarter.  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, but as yet undrilled, Kuma prospect on the island of Guadalcanal exhibits surface lithocap 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 the Solomon Islands.

SolGold is based in Brisbane, Queensland, Australia.  The Company is listed on the LSE and TSX, with both exchanges using the ticker code: SOLG, and currently has on issue a total of 1,696,245,686 fully-paid ordinary shares, 31,795,884 share options exercisable at 28p; 9,795,884 share options exercisable at 14p and 46,762,000 share options exercisable at 60p.

CAUTIONARY NOTICE

News releases, presentations and public commentary made by SolGold plc (the "Company") and its Officers may contain certain statements and expressions of belief, expectation or opinion which are forward looking statements, and which relate, inter alia, to interpretations of exploration results to date and the Company's proposed strategy, plans and objectives or to the expectations or intentions of the Company's Directors.  Such forward-looking and interpretative 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 interpretations and forward-looking statements.  

Accordingly, the reader should not rely on any interpretations or forward-looking statements; and save as required by the exchange rules of the TSX and LSE or by applicable laws, the Company does not accept any obligation to disseminate any updates or revisions to such interpretations or forward-looking statements.  The Company may reinterpret results to date as the status of its assets and projects changes with time expenditure, metals prices and other affecting circumstances.

This release may contain "forward‑looking information" within the meaning of applicable Canadian securities legislation.  Forward‑looking information includes, but is not limited to, statements regarding the Company's plans for developing its properties.  Generally, forward‑looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".  Forward‑looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward‑looking information, including but not limited to: transaction risks; general business, economic, competitive, political and social uncertainties; future prices of mineral prices; accidents, labour disputes and shortages and other risks of the mining industry.  Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended.  There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.  Accordingly, readers should not place undue reliance on forward‑looking information.  The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

The Company and its officers do not endorse, or reject or otherwise comment on the conclusions, interpretations or views expressed in press articles or third-party analysis, and where possible aims to circulate all available material on its website.

The Company recognises that the term "World Class" is subjective and for the purpose of the Company's projects the Company considers the drilling results at the growing Alpala Porphyry Copper Gold Deposit at its Cascabel Project to represent intersections of a "World Class" deposit.  The Company considers that "World Class" deposits are rare, very large, long life, low cost, and are responsible for approximately half of total global metals production. "World Class" deposits are generally accepted as deposits of a size and quality that create multiple expansion opportunities, and have or are likely to demonstrate robust economics that ensure development irrespective of position within the global commodity cycles, or whether or not the deposit has been fully drilled out, or a feasibility study completed.

Standards drawn from industry experts (1) Singer and Menzie, 2010; (2) Schodde, 2006; (3) Schodde and Hronsky, 2006; (4) Singer, 1995; (5) Laznicka, 2010) have characterised "World Class" deposits at prevailing commodity prices. The relevant criteria for "World Class" deposits, adjusted to current long run commodity prices, are considered to be those holding or likely to hold more than 5 million tonnes of copper and/or more than 6 million ounces of gold with a modelled net present value of greater than USD 1 Billion.

The Company and its external consultants prepared an initial mineral resource estimate at the Cascabel Project in December 2017. Results are summarised in Table B.

The Mineral Resource Estimate was completed from 53,616m of drilling, approximately 84% of 63,500m metres drilled as of mid-December 2017, the cut-off date for the maiden resource calculation.  There remains strong potential for further growth from more recent drilling results, and continue rapid growth of the deposit.

Any development or mining potential for the project remains speculative.

On the basis of the drilling results to date and the results of the Alpala Maiden Mineral Resource Estimate, the reference to the Cascabel Project as "World Class" (or "Tier 1") is considered to be appropriate. Examples of global copper and gold discoveries since 2006 that are generally considered to be "World Class" are summarised in Table A.

References cited in the text:

1.      Singer, D.A. and Menzie, W.D., 2010. Quantitative Mineral Resource Assessments: An Integrated Approach. Oxford University Press Inc.

2.      Schodde, R., 2006. What do we mean by a world class deposit? And why are they special. Presentation. AMEC Conference, Perth.

3.      Schodde, R and Hronsky, J.M.A, 2006. The Role of World-Class Mines in Wealth Creation. Special Publications of the Society of Economic Geologists Volume 12.

4.      Singer, D.A., 1995, World-class base and precious metal deposits-a quantitative analysis: Economic Geology, v. 90, no.1, p. 88-104.

5.      Laznicka, P., 2010. Giant Metallic Deposits: Future Sources of Industrial Metal, Second Edition. Springer-Verlag Heidelberg.

Table A:  Tier 1 global copper and gold discoveries since 2006. This table does not purport to be exhaustive exclusive or definitive.

	Resource Category	Tonnage (Mt)	Grade			Contained Metal
			Cu (%)	Au (g/t)	CuEq (%)	Cu (Mt)	Au (Mt)	CuEq (Mt)
>1.1% CuEq	Indicated	70	1.1	1.3	1.8	0.7	2.8	1.2
	Inferred	50	1.1	1.3	1.8	0.5	1.9	0.8
0.9 - 1.1% CuEq	Indicated	50	0.7	0.5	1.0	0.3	0.9	0.5
	Inferred	50	0.7	0.5	1.0	0.4	0.9	0.5
0.3 - 0.9% CuEq	Indicated	310	0.4	0.2	0.5	1.2	2.3	1.6
	Inferred	550	0.4	0.2	0.5	2.0	3.5	2.6
Total >0.3% CuEq	Indicated	430	0.5	0.4	0.8	2.3	6.0	3.4
	Inferred	650	0.4	0.3	0.6	2.9	6.3	4.0

 Table B: Alpala Mineral Resource statement as of 18 December 2017

Notes:

·          Mr. Martin Pittuck, MSc, CEng, MIMMM, is responsible for this Mineral Resource estimate and is an "independent qualified person" as such term is defined in NI 43-101

·          The Mineral Resource is reported using a cut-off grade of 0.3% copper equivalent calculated using [copper grade (%)] + [gold grade (g/t) x 0.6] based on a copper price of US$2.8/lb and gold price of US$1,160/oz

·          The Mineral Resource is considered to have reasonable potential for eventual economic extraction by underground mass mining such as block caving

·          Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability

·          The statement uses the terminology, definitions and guidelines given in the CIM Standards on Mineral Resources and Mineral Reserves (May 2014).

·          The MRE is reported on 100 percent basis

·          Values given in the table have been rounded, apparent calculation errors resulting from this are not considered to be material

·          The effective date for the Mineral Resource statement is 18th December 2017

 

END

 

 

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