Kauffmans Exploration Update

RNS Number : 7613M

Solomon Gold PLC

22 August 2011

 



            22 August 2011

Solomon Gold Plc

("Solomon Gold" or the "Company")

Further drilling confirms significant gold and silver intersections in percussion and diamond core holes at the 100% owned Kauffmans-Homestead Prospect, Central Rannes, Queensland.

Targeting 2 million ounces of gold at Central Rannes.

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 field programs at the Company's 100% owned Kauffmans-Homestead Prospect, Central Rannes Queensland, Australian ("Kauffmans Prospect").

HIGHLIGHTS

·    An additional 18 holes have shown further encouraging high grade gold and silver results from the Kauffmans Prospect.

·    KAU96; 10m @ 4.02g/t gold and 24.5g/t silver from 116m (incl. 4m @ 9.65g/t gold and 30.7g/t silver from 118m).

·    KAU98 (Percussion); 2m @ 5.61g/t gold and 21.4g/t silver from 124m.

·    KAU098 (core); 24m @ 3.28g/t gold and 9.8g/t silver from 277m (deep core).

·    KAU101 (Percussion); 8m @ 3.14g/t gold and 5.6g/t silver from 98m and 3m @ 4.29g/t gold and 12.85g/t silver from 126m (deep core)

·    KAU101 (core); 35m @ 1.38g/t gold and 5.4g/t silver from 178m.

·    KAU105; 50m @ 2.28g/t gold and 25.8g/t silver from surface (incl. 20m @ 3.66g/t gold and 37.7g/t silver from surface).

·    KAU107; 8m @ 2.45g/t gold and 28.6g/t silver from surface and 2m @ 4.11g/t gold and 6.51g/t silver from 104m.

·    Further drilling at twenty-one defined Prospects at Rannes to meet the Company's gold target of 2 million ounces at the Central Rannes Area.

·    Assay results from holes KAU089 to KAU108 currently not the subject of resource calculations, will be included in the updated Resource estimate for Kauffmans to be announced early September.

Commenting on today's statement, Nick Mather, Chief Executive Officer, said "Following the Company's announcement made in July, where further encouraging high grade gold and silver results from the deeper drilling were reported, the Board is pleased to report again on encouraging high grade intercepts at Kauffmans-Homestead.  Further drilling of the nineteen prospects so far defined at Rannes, is planned to meet the Company's gold target of 2 million ounces in the Central Rannes Area, the Board is confident that the currently defined gold and silver system at Central Rannes gives way to deeper high grade epithermal gold mineralisation in the boiling zone of these epithermal gold-silver systems."

Solomon Gold has both Reverse Circulation ("RC") and Diamond Drill ("DD") rigs currently active at its Central Rannes Project in Queensland, Australia.  The RC rig is drilling to define gold and silver mineralisation in areas of coherent high order gold in soil and across its 30km long newly defined gold province centred on Rannes in Central Queensland (Figures 1 to 3 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).  The diamond drill rig is drilling deep extensions of mineralisation under the existing Kauffmans resource.

Solomon Gold recently received drill results for holes drilled at the Kauffmans Prospect.  The significant results from the most recent drilling, which have not been previously reported include:

·    KAU96; 10m @ 4.02g/t gold and 24.5g/t silver from 116m (incl. 4m @ 9.65g/t gold and 30.7g/t silver from 118m).

·    KAU98; 2m @ 5.61g/t gold and 21.4g/t silver from 124m in the top percussion drilled section and 24m @ 3.28g/t gold and 9.8g/t silver from 277m in the deeper core drilled section.

·    KAU101; 8m @ 3.14g/t gold and 5.6g/t silver from 98m and 3m @ 4.29g/t gold and 12.85g/t silver from 126m in the top percussion drilled section and 35m @ 1.38g/t gold and 5.4g/t silver from 178m in the deeper core drilled section.

·    KAU105; 50m @ 2.28g/t gold and 25.8g/t silver from surface (incl. 20m @ 3.66g/t gold and 37.7g/t silver from surface).

·    KAU107; 8m @ 2.45g/t gold and 28.6g/t silver from surface and 2m @ 4.11g/t gold and 6.51g/t silver from 104m.

A complete set of results from the recent drilling is summarised in Table 1, in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com.

Kauffmans is currently estimated to host 203koz of contained equivalent gold (168koz gold and 2.23Moz silver), based on a 0.35g/t gold equivalent cut‐off grade  The current drill program of 4,300m over 26 holes since 6 June 2011 is expected to provide data for a resource upgrade scheduled for early September.  The aim of the program has been to test the deeper extensions of the mineralisation underneath the current resource at Kauffmans as well as extensions to the north, east, west and south-east.  Drilling to date has indicated mineralised breccias to a depth of 300m underneath Kauffmans.  Results to date from the recent percussion and diamond core drilling in the surface zone, KAU091 to KAU108 are tabulated in Table 1, in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com.

Drill holes KAU105 and KAU107, both on the eastern margin of the Kauffmans prospect; have returned significant gold and silver assay results, from surface, which will allow immediate access to ore for mining.  KAU105; 50m @ 2.28g/t gold and 25.8g/t silver from surface (incl. 20m @ 3.66g/t gold and 37.7g/t silver from surface).  KAU107; 8m @ 2.45g/t gold and 28.6g/t silver from surface.

The results for the diamond core tails below a depth of 150m, in holes KAU106 and KAU107 are pending.

New zones of mineralisation have also been discovered in drill holes at Kauffmans West (drillholes KAW001 to KAW010) and Shilo North (drillholes KAU 103 and KAU 104) shown in Figures 2 and 3 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com.  At Shilo North, immediately east of Kauffmans, KAU103 intersected 28m @ 0.53g/t gold and 14.8g/t silver from 50m depth.  Mineralisation is interpreted to extend east of the Kauffmans-Shilo line.  Strong sulphide mineralisation and quartz veining has been intersected in drillholes between 40m and 120m east of KAU103 and assay results are pending.  Further drill testing is underway as this zone is almost completely covered by ancient alluvium.  Shilo and Shilo North are considered close enough to Kauffmans to be incorporated within the same potential open pit mining operation.

Additional drilling between the main Kauffmans Prospect and Kauffmans North has also discovered an extension to the main Kauffmans Prospect (Figures 2 and 3 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).  Further drill holes are underway as this zone is also substantially covered by alluvium.  Strong sulphide mineralisation and quartz veining has also been encountered and assay results are pending.

The mineralisation at Kauffmans notably includes higher grade sections including up to 2m @ 60g/t gold (previously announced, 19 July 2011, See 'Latest News' section on the website, www.solomongold.com) previously reported) which are comparable to those at Cracow 120km to the south (Newcrest Mining Limited has recently agreed to sell its 70% interest to Conquest Mining Limited for approximately A$200m).  The central high grade zone at Kauffmans is now defined approximately by drilling as being over 280m long, up to 50m wide and is open to the north, and the south at depth (Figure 2 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).  The Rannes Project is characterised by extensive breccia zones (Figure 4 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com) which are believed to be attached to and generated from mineralised intrusive bodies at depth.

Drilling at Rannes is continuous and employs three rigs across 21 targets outlined over a strike length of 30kms (Figure1 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).  A further two rigs are scheduled in the next month.  The main mineralised trend from Homestead South though Kauffmans to Shilo is 1.6km long and 0.5km wide.

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 are the major focus of the Company.  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 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 Grasberg, Lihir, Panguna and Ok Tedi, each with in excess of 40Moz gold equivalent metal endowment. 

The Company also 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.

Solomon Gold has also 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'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 Central Rannes Projects, Crunchie and Kauffmans-Homestead Prospect is 14.81Mt at 1.14g/t gold equivalent for 543,858oz of contained equivalent gold (273,199oz gold and 10.67Moz silver), based on a gold to silver ratio of 1 : 40 and a 0.35g/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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