Oman Copper Gold - Project Update

RNS Number : 6670P

Savannah Resources PLC

22 February 2016

 

Savannah Resources Plc / Index: AIM / Epic: SAV / Sector: Mining

22 February 2016

Savannah Resources Plc

Oman Copper Gold - Project Update

Savannah Resources plc (AIM: SAV) ('Savannah' or the 'Company'), the AIM quoted resource development company, announces the remaining results from the reverse circulation ('RC') and diamond drilling programme completed at Blocks 4 and 5 in Oman, which are prospective for copper and gold.  In addition, the Company has completed the preliminary compilation of data from the historic Lasail deposit in Block 4, which is the largest historical mine in Oman.  Savannah is earning a 65% shareholding in the Omani company, Al Thuraya LLC, the owner of the Block 4 Project and is a 65% shareholder in Al Fairuz Mining, the holder of the Block 5 licence. To view the press release with the illustrative maps and diagrams please use the following link:

http://www.rns-pdf.londonstockexchange.com/rns/6670P_-2016-2-20.pdf

HIGHLIGHTS:

·    Block 4 and 5 RC/diamond drilling programme completed on 30 December 2015, with results returned from the remaining seven holes which included one re-drill of an abandoned hole

·    Further encouraging results include:

o 16m at 0.85% copper, from 105m in 15B5DD006 at Mahab 4, Block 5

o 9m at 0.5% copper and 2g/t gold from 4m in 15B4RC009 at Gaddamah, Block 4

·    Data compilation of historic drill results for 155 holes (18,745m) at the previously producing Lasail Mine has highlighted a number of potential mining opportunities. Significant results identified to date include:

o 16.8m at 3.1% copper from 86.37m in hole 2-29

o 15.8m at 3.9% copper from 0m in hole MOB197-007 (horizontal underground hole)

o 15.25m at 2.54% copper from 59.94m in hole 2-31

o 56m at 1.52% copper from 103m in hole 2-2

·    Results received to date for the first nine holes drilled by Savannah (previously announced) include:

o 9m at 4.86% copper, 1.54% zinc, 1.3g/t gold and 37.3g/t silver from the Dog's Bone target at Aarja in Block 4

o 6.6m at 6.92% copper, 5.6% zinc, 0.3g/t gold and 23.8g/t silver at Mahab 4 in Block 5

·    Past results from previous exploration of the high-grade (>5% copper) portion of the Mahab 4 deposit in Block 5 (previously announced) include:       

o 51.58m at 5.2% copper in GRB5D035

o 56.85m at 6.2% copper in B5MB4D071

·    Based on these existing, high-grade intersections Savannah is developing a strategy to achieve high-grade, low cost copper concentrate production in late 2017 with additional gold upside

David Archer, Savannah's Chief Executive Officer said today "We are making excellent progress with our copper-gold projects in Oman.  Additional copper-gold mineralisation has been confirmed at Aarja in Block 4, the high-grade copper envelope of the Mahab 4 deposit in Block 5 where we have defined our current resource of 1.5Mt at 2.1% copper for 31,500t of contained copper has been extended, gold mineralisation at Gaddamah in Block 4 has been increased, and recently compiled drill data has highlighted both the high-grade open-cut and underground copper potential of the Lasail Mine."

Priorities for Savannah at Blocks 4 and 5 in 2016 include:

·    Planning of additional drill programmes at Blocks 4 and 5

·    Compilation of a Mineral Resource estimate for the previously producing Aarja, Bayda and Lasail Mines in Block 4

·    Feasibility study of an amalgamated mine development of the deposits within Blocks 4 and 5

·    Applications for mining leases over the deposits

·    Associated financing activities

DETAILS OF DRILLING PROGRAMME

A total of 16 drill holes were completed targeting a series of exploration and resource expansion/confirmation opportunities. A brief summary of the targets tested as part of this latest set of results is provided below (Table 1).

Resource Expansion/Confirmation Targets

Mahab 4, Block 5: Drilling targeting the potential down dip extension of the high-grade Volcanogenic Massive Sulphide ('VMS') stack at Mahab 4 intersected the lower portion of the VMS stratigraphy below the main sulphide pile, which returned a result of 16m at 0.85%Cu, from 105m in 15B5DD006. Further work is now required to test both the down plunge and up plunge sections of the deposit, which has a current Mineral Resource of 1.5Mt at 2.1% copper for 31,500t of contained copper (Figure 1 and 2).

Figure 1. Mahab 4 Orebody showing cross section for the recent drilling - see PDF

Figure 2. Cross Section through the Mahab 4 Ore body showing recent drilling in RED - see PDF

Exploration Targets

Gaddamah, Block 4: Drilling targeted a gold rich zone associated with a late stage shear zone has continued to provide encouraging results including 9m at 0.5% copper and 2g/t gold from 4m in 15B4RC009. The prospectivity is supported by previous results including 15.9m at 1.91,g/t gold and 1.2% copper from BEC23, which is located at the southern end of the gold zone.

VTEM 4 (Aarja) and VTEM 13 (Zuha North), Block 4: Testing of two high priority Versatile Time Domain Electromagnetics ('VTEM') targets for the presence of VMS mineralisation.

VTEM 13 - Pyrite and epidote alteration was identified on the pillow margins around the interpreted target position in hole 15B4DD002, indicating hydrothermal alteration has occurred in the area.  The favourable geological setting and the alteration in the area warrant further investigation to explain the presence of the strong VTEM anomaly.  The hole has been cased with PVC for follow up DHEM geophysics to test for the presence of off hole conductors.

VTEM 4 - Drill testing of VTEM 4 did not intersect alteration or likely cause of the VTEM anomaly and a review is underway to review and refine this target for follow up work.

Table 1. Summary of Results from recent 7 drill holes

Hole ID	Prospect	Northing	Easting	rL	Azimuth (Deg)	Dip (Deg)	EOH (m)	From (m)	To (m)	Down Hole Interval (m)	Grade % Cu	Grade % Zn	Grade g/t Au	Grade g/t Ag
15B4RC009	Gaddamah	2684594.0	440340.0	283	0	-90	30.00	4.00	13.0	9.0	0.5	2.0	2.0	7.2
15B4RC010	Gaddamah	2684586.0	440348.0	282	0	-90	30.00	5.00	12.0	7.0	0.2	1.7	0.1	0.0
15B4RC001	VTEM Target #4	2693035.0	440591.0	228	270	-70	100	No Significant Assays
15B5DD007	Mahab 4	2656314.00	468761.00	215	255	-55	93.35	No Significant Assays
15B5DD008	Mahab 4	2656351.0	468794.0	215	262	-50	125	Hole terminated before target
15B5DD008A	Mahab 4	2656351.0	468794.0	215	262	-50	216	No Significant Assays
15B5DD006	Mahab 4	2656301.0	468786.0	215	255	-60	149	105.00	121.00	16.00	0.9	No Significant Assays
15B4DD002	Zuha North	2678185.0	451615.0	212	270	-65	159	No Significant Assays

Samples were assayed via the following method

·    The tested samples were dried at 85°C, crushed and pulverised to 75 μm

·    The method for gold analysis was using was fire assay (using 30g samples) with an atomic absorption spectrometry (AAS) finish, which detected gold in the range of 5ppb - 10ppm. A re-assay with gravimetric finish was used with the initial assay detected >10ppm gold (and silver) using a further 30g sample

·    The method for copper analysis was a 24 element inductively coupled plasma optical emission spectrometry (ICP-OES) analysis of an Aqua Regia digest

Lasail Data Compilation

The Lasail Mine is the largest VMS deposit within the Oman Ophiolite Belt and 13Mt at 2% copper was mined between 1986 and 1994. Savannah has been carefully locating and digitally capturing the available historical drill data and mining data to build up a detailed 3D model of the old mine. Based on this data Savannah has been able to identify several potential areas, which could present future mining opportunities.

Some of the significant results returned to date include (note that the holes were not assayed for gold):

Near Surface Intercepts

·    16.8m at 3.1% copper from 86.37m in hole 2-29

·    15.25m at 2.54% copper from 59.94m in hole 2-31

·    56m at 1.52% copper from 103m in hole 2-2

Deeper Intercepts

·    15.8m at 3.9% copper from 0m in hole MOB197-007 (horizontal underground hole)

·    16.9m at 2.0% copper from 3.4m in hole MOB197-008 (horizontal underground hole)

·    11.9m at 2.4% copper from 42m in hole 2-455 (horizontal underground hole)

Work is continuing to verify those areas that have and have not been mined and will be followed by some high level scoping studies to determine the potential viability of the areas as a mining opportunity. Full details of the data compilation are available in the attached JORC Table 1 information.

Figure 3. Historical Lasail Deposit highlighting mineralised areas outside mined areas - see PDF

Table 2. Initial summary of historical results from the old Lasail Mine

Hole ID	Prospect	Northing	Easting	rL	Azimuth	Dip	EOH	From (m)	To (m)	Down hole	Grade
					(Deg)	(Deg)	(m)			Interval (m)	% Cu
2-2	Lasail	2684665.55	442582.23	250.00	267	-60	180.00	103.22	159.22	56*	1.5
2-29	Lasail	2684874.48	442597.29	250.00	0	-90	106.68	86.37	103.22	16.85	3.1
2-31	Lasail	2684855.96	442529.03	250.00	0	-90	91.75	59.94	75.19	15.25	2.5
2-464	Lasail	2684500.00	442786.01	20.07	70	-20	69.40	44.00	51.60	7.60	2.1
2-427	Lasail	2684548.04	442755.37	42.17	70	-24	102.00	70.10	75.30	5.20	2.8
2-455	Lasail	2684652.17	442837.95	21.17	180	-4	86.00	42.00	53.90	11.90	2.4
2-457	Lasail	2684657.39	442822.58	30.67	0	-65	74.40	0.00	45.30	45.30	1.5
MOB197-007	Lasail	2684458.83	442748.12	64.27	165	44	25.00	0.00	15.80	15.80	3.9
MOB197-008	Lasail	2684458.83	442748.12	64.27	165	22	20.50	3.40	20.50	16.90	2.0

*It is important to note that the data compilation work is still ongoing and the data set is not complete and work is continuing to determine what areas have and have not been mined and the results above could change as additional data is located and added to the database.

Competent Person

The information in this announcement that relates to exploration results is based upon information compiled by Mr Dale Ferguson, Technical Director of Savannah Resources Limited. Mr Ferguson is a Member of the Australian Institute of Mining and Metallurgy (AusIMM) and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the December 2012 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (JORC Code). Mr Ferguson consents to the inclusion in the report of the matters based upon the information in the form and context in which it appears.

**ENDS**

For further information please visit www.savannahresources.com or contact:

David Archer	Savannah Resources plc	Tel: [phone]
David Hignell / Gerry Beaney (Nominated Adviser)	Northland Capital Partners Ltd	Tel: [phone]
Jon Belliss / Elliot Hance (Corporate Broker)	Beaufort Securities Ltd	Tel: [phone]
Charlotte Heap / Lottie Brocklehurst	St Brides Partners Ltd	Tel: [phone]

Notes

Savannah Resources Plc (AIM: SAV) is a growth oriented, multi-commodity, development company.

Savannah has agreed to acquire 100% of Matilda Minerals Limitada which currently operates the Jangamo exploration project, and has agreed with Rio Tinto to form a joint venture in Mozambique to develop the combined Mutamba/Jangamo Project.  Formation of the joint venture remains subject to approval by the Ministry of Mineral Resources and Energy of the Republic of Mozambique.  Jangamo has a 65Mt Inferred Mineral Resource @4.2% total heavy minerals ("THM") at a 2.5% cut-off grade.  The Mutamba, Dongane and Chilubane deposits have a combined exploration target of 7-12Bn tonnes at 3-4.5% THM (published in 2008).

Savannah has interests in three copper blocks in the highly prospective Semail Ophiolite Belt in Oman.  The projects, which have an Indicated and Inferred Mineral Resource of 1.7Mt @ 2.2% copper and high grade intercepts of up to 56.35m at 6.21% Cu, with additional gold upside potential, provide Savannah with an excellent opportunity to potentially evolve into a mid-tier copper and gold producer in a relatively short time frame. Together with its Omani partners, Savannah aims to outline further mineral resources to provide the critical mass for a central operating plant to develop the deposits, and in December 2015 outlined exploration targets of between 10,700,000 and 29,250,000 tonnes grading between 1.4% and 2.4% copper.

 

END

 

 

DRLURARRNAAUUAR