Resource Upgrade at Rannes Project

RNS Number : 7872I

Solomon Gold PLC

21 June 2011

 



            21 June 2011

Solomon Gold Plc

("Solomon Gold" or the "Company")

Solomon Gold Inferred Resource Estimate at Rannes increased by 34% to 543koz of contained equivalent gold.  Drilling continues to target 2Moz Inferred Resource.

Solomon Gold (AIM Code: SOLG), active in four drill programs for gold, silver and copper in Solomon Islands and Australia, is pleased to announce a further Resource Estimate Upgrade for its 100% owned Central Rannes Prospects; Crunchie and Kauffmans-Homestead, in Central Queensland, Australia.

HIGHLIGHTS

·    Solomon Gold Inferred Resource increased by 34%.

·    Solomon Gold upgrades Inferred Mineral Resource to 14.81Mt at 1.14g/t gold equivalent for 543,858oz of contained equivalent gold (gold to silver ratio of 1 : 40 and a 0.35g/t gold equivalent cut‐off grade).

·    The Kauffmans-Homestead resource component remains open at depth, below the existing drilled intersection and estimated resource.

·    Multiple prospects within the Central Rannes Project area, over a 1.5km strike length, provide excellent potential for a significant further expansion of the existing resource inventory.

·    Drilling campaign to continue on targets in the Central Rannes Area in order to define 2Moz gold equivalent resources.

·    A$12million cash at bank.

Commenting on the resource upgrade, Nicholas Mather, Chief Executive of Solomon Gold plc said: "The Company is pleased to report the further upgrade of the Inferred Resource estimate at the Central Rannes Project.  Total Solomon Gold Inferred Mineral Resource estimate at Rannes is now 14.81Mt at 1.14g/t gold equivalent for 543,858oz of contained equivalent gold (gold to silver ratio of 1 : 40 and a 0.35g/t gold equivalent cut‐off grade).

The Crunchie Prospect is particularly high in silver grades with over 8Moz contained.  In particular, some high silver grades have been encountered in the deepest holes at Crunchie notably in Holes CRU67 (4m @ 2.75g/t Au and 106g/t Ag from 118m) and CRU69 (2m @ 1.19g/t Au and 316.5g/t Ag from 110m).  The veins in those vertical holes are almost flat lying, so that these intersections are close to true widths.

The Kauffmans deposit remains open at depth, below the estimated resource.  A deep drilling campaign has been initiated in order to increase both the gold and silver resource.

The areas north and west of Crunchie are targeted for near term drill testing for additional silver gold mineralisation.

The Company has A$12million in the bank to continue its exploration program."he added.

The Board is pleased to announce an increase of the Inferred Mineral Resource estimate following continued work at its Central Rannes Project; Crunchie and Kauffmans-Homestead Prospects.  The Estimate 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 the Crunchie Prospect, the Inferred Mineral Resource estimate is 5.77Mt at 1.60g/t gold equivalent for 296,813oz of contained equivalent gold (87,189oz gold and 8.35Moz silver), based on a gold to silver ratio of 1 : 40 and a 0.35g/t gold equivalent cut‐off grade.  At the Kauffmans-Homestead Prospect, the Inferred Mineral Resource estimate is 9.04Mt at 0.85g/t gold equivalent for 247,044oz of contained equivalent gold (186,010oz gold and 2.33Moz silver), based on a gold to silver ratio of 1 : 40 and a 0.35g/t gold equivalent cut‐off grade.

Table 1 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com, shows the Inferred Resource estimate for the individual Prospects, as well as the Company's total Inferred Resource estimate at various gold to silver ratio's (30, 40, 50 and 60) and gold equivalent cut‐off grades (0.20, 0.25, 0.30, 0.35, 0.40 and 0.50).

As is shown in Table 2 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com,  a range of gold equivalent ratios have been calculated, ranging from 60 to 40, based on the 12-month, six-month and three-month average monthly metal price.

The estimates were compiled by Hellman & Schofield Pty Ltd, an independent geological consultancy, and have been classified as Inferred for reporting under the JORC Code for Reporting of Mineral Resources and Ore Reserves widely accepted as a standard for professional reporting purposes.

The Crunchie and Kauffmans-Homestead Prospects are 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 form 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).  At the Rannes Project in Central Queensland, Australia, the area is flat and outcrop is poor and consequently the area has not been subject to intense exploration in the past.  The potential of the faulted eastern margin of the southern Bowen Basin has not previously been recognised as a Carlin Style regional target.  The presence of Newcrest's Cracow Gold Mine, 120 km to the south in that setting and the duplication at a higher level at Rannes brings into sharp focus the potential for other systems to be discovered in Solomon Gold's 200km long 100% owned exploration license areas.

Mineralisation similar in texture and chemistry, as well as similar structural settings to that on the Carlin Trend in Nevada, USA has been identified and substantiated during drilling programs at Rannes.  The Carlin and Battle Mountain Trends are amongst the most prolific gold producing belts in the world, boasting in excess of 200Moz of combined resources and production to date.  Mineralisation occurs on structural trends which are the focus of the intrusions, faulting and characteristic low temperature mineralisation.  Solomon Gold has consolidated at Rannes, 200km length of exploration ground prospective for Carlin style gold mineralisation.  The zone lies on the eastern faulted edge of the coal rich Bowen Basin, in an environment favourable for the introduction of mineral bearing granitic intrusions and related volcanic centres.

Resources currently defined at Crunchie and Kauffmans-Homestead Prospects should be amenable to open-pit mining, subject to the outcomes of feasibility studies.  Linking Kauffmans to the Homestead Prospect in the northwest and Shilo to the south-east, defines a mineralised trend of over 1.5km in strike length.  The consistent improvement in gold grade and gold to silver ratios at depth is a strong driver for deeper drilling at Kauffmans and the Cracklin Rosie prospects to the south.  Solomon Gold is currently drill testing Kauffmans deeps, Cracklin Rosie and several other targets for additional resources and higher gold grades.

Magnetic interpretation and soil sample results indicate numerous other targets immediately adjacent to Kauffmans and Crunchie.  These targets have been recently defined by Solomon Gold soil sampling and magnetic surveys, but have not yet been drill tested.  They augment other nearby prospects in the Central Rannes area: Porcupine Pie, Cracklin Rosie and Shilo, all of which have yielded economic and encouraging intersections in the past.  At each of these locations, high level of arsenic, mercury, thallium and antimony in soil samples coincide with, or are marginally offset from areas of low magnetism, indicating the presence of host rocks which have been demagnetised by hot fluids causing alteration of the rock and deposition of gold and silver.  These locations will be subject to immediate follow-up drilling as soil anomalies are defined.

Drilling is also underway at the Brother, Police Camp Creek and Spring Creek Prospects to the south where areas of significant mineralisation have been defined. Zones of mineralisation have also been defined at the Old Man and Needle Prospects and are the subjects of current drill testing programs.

Solomon Gold is targeting a resource in excess of 2Moz of gold at the Rannes 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 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, Rannes Central and Police Camp.  The exploration area is believed to host mineral systems which are geologically similar to the Carlin trend in Nevada USA.  At Rannes Central, 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 283,907,808 shares on issue.  Further details concerning the Company's key projects and personnel can be found at www.solomongold.com

 

END

 

 

MSCFBMBTMBJTMFB