Kauffmans-Homestead Exploration Update

RNS Number : 6361K

Solomon Gold PLC

19 July 2011

 



            19 July 2011

Solomon Gold Plc

("Solomon Gold" or the "Company")

Further high grade gold and silver results intercepted in deeper drilling at Kauffmans-Homestead Prospect, Central Rannes, Queensland.

Solomon Gold (AIM Code: SOLG), actively exploring on four projects in Solomon Islands and Australia, is pleased to announce further encouraging high grade results from the deeper drilling on the Kauffmans-Homestead Prospect, Central Rannes in Queensland ("Kauffmans-Homestead Prospect").

HIGHLIGHTS

·    Further encouraging high grade gold and silver results from the deeper drilling on the Kauffmans-Homestead Prospect.

·    KAU90; 20m @ 8.44g/t gold and 12.1g/t silver from 88m (incl. 4m @ 37.8g/t gold and 27.1g/t silver from 100m).

·    Current target of 550koz of gold equivalent at Kauffmans-Homestead Prospect, an important component of the Company's 2Moz target at the Central Rannes Area.

·    Gold-silver ratios providing the basis for a model to predict depth to the high grade zones. The results are suggesting that the Crunchie Prospect is also prospective for a richer gold zone at depth.

The Directors of Solomon Gold are pleased to advise that further deeper drilling below the existing resource at the  Kauffmans-Homestead Prospect (see Solomon Gold Announcement dated 21 June 2011 at www.Solomongold.com), has resulted in encouraging high grade intercepts.  The Kauffmans-Homestead Prospect is located approximately 150km west of the major central Queensland port city of Gladstone (Figure 1 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com) and forms part of the Company's broader Rannes Project (Figure 2 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).

Solomon Gold has continued to drill the Kauffmans-Homestead Prospect which is open at depth, below the existing drilled intersections and estimated Inferred Resource.  The aim of this campaign is to expand the current 247koz gold equivalent resource at the Kauffmans-Homestead Prospect, by drill testing underneath and along strike from higher grade intersections encountered at depth in the earlier drilling.  The previous drilling was generally less than 100m depth. 

The latest deep drilling campaign has to date comprised 14 percussion holes drilled to depths of between 114m and 190m.  Of these percussion holes, so far four (KAU89, KAU90, KAU91 and KAU92) have been extended by diamond drilling to 240m.  No results have been received from the diamond drilling component at this stage.

Assays have been received from the percussion hole sections of the first two of these holes, KAU89 and KAU90.  Assay results from the other 12 holes are pending.

·    Drill hole KAU89, drilled to a total depth of 240m, has been assayed to a depth of 114m (the percussion drill section) and has recorded broad intervals of low grades (1.0g/t gold and 25g/t silver), increasing at depth, up to the start of the diamond drilling.

·    Drill hole KAU90, drilled to a total depth of 240m, has been assayed to a depth of 144m, the end of the percussion hole section.  An excellent intersection of high grade was encountered in KAU90, just below the level of previously reported intersection in hole KAU36 of 8m @ 4.73g/t gold and 39g/t silver from 82m.  The results from KAU90 are 20m @ 8.44g/t gold and 12.1g/t silver from 88m (Incl. 4m @ 37.8g/t gold and 27.1g/t silver from 100m, including 2m @ 60.4g/t gold and 35.9g/t silver).    KAU90 is located 30m east of KAU36 at the same level.

The promising intersection in KAU90 is interpreted to be from the downdip extension of the central shoot at Kauffmans (Figure 3 and 4 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).  As is also the case at Crunchie and other Kauffmans shoots, the central shoot changes in character downdip.  In the upper portions, the gold deposit is a broad and diffuse zone of brecciated altered sediment, but becomes more discrete and higher grade with depth.

The Company believes that the currently defined low grade system at Central Rannes gives way to deeper Cracow style intersections in the boiling zone of these Epithermal gold-silver systems.  The Cracow Gold Mine, 70% owned and operated by Newcrest Mining Limited lies some 120km south of the Rannes project area and produces approximately 100kozpa gold (from a 0.3Moz Reserve and 0.43Moz Resource) at 7.9g/t gold from an underground operation mining high grade epithermal vein system. The epithermal character of the rich veins at Cracow is thought to represent the tenor of gold mineralisation possible at depth underneath the high level systems at Rannes.   Importantly, at the Kauffmans-Homestead Prospect, the gold-silver ratio is approximately 3:2 as opposed to the 1:2 ratio seen at the Company's Crunchie Prospect, which lies to the west where the basement of the Bowen Basin is deeper.  Solomon Gold is developing a model of the gold-silver ratios and predicted depth to the high grade zones.  The results suggest that the Crunchie Prospect is also prospective for a richer gold zone at depth.  Current drill programs at Crunchie will test this relationship. 

Solomon Gold is targeting 300koz in the 200m long and 100m deep system underneath the existing Kauffmans-Homestead Inferred Resource.  Gold grades in the central mineralised zone at Kauffmans-Homestead are significantly higher at depth, approximately 10g/t to 30g/t gold compared to the shallower grades at approximately 1g/t to 4g/t gold.  In the short-term, Solomon Gold is targeting up to 550koz of gold equivalent at the Kauffmans-Homestead Prospect, an important component of the Company's 2Moz target at the Central Rannes Area, currently 544koz of contained equivalent gold.

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

 

END

 

 

DRLLIFITDSIALIL