Drilling Results

RNS Number : 8561Y

Scotgold Resources Ltd

07 March 2012

 



7 March 2012

Scotgold Resources Limited ("Scotgold" or the "Company")

Highly anomalous Platinum Group Metals, Gold and Base Metals at Sron Garbh

Sron Garbh Mafic complex

·     Selected AQ drill hole results best intercepts include

·     SQ AQ 16 - 0.22g/t Au, 0.78g/t Pd, 0.58g/t Pt, 0.75% Cu, 0.18% Ni and 0.01% Co over 2 metres

·     SQ AQ 15 - 0.08g/t Au, 0.43g/t Pd, 0.35g/t Pt, 0.58%Cu, 0.17% Ni and 0.02% Co over 1.25 metres

·     SQ AQ 26 - 0.11g/t Au, 0.31g/t Pd, 0.37g/t Pt, 0.65% Cu, 0.21% Ni and 0.04% Co over 1 metre

·     SQ AQ 28 - 0.03g/t Au, 0.29g/t Pd, 0.25g/t Pt, 0.17% Cu, 0.12% Ni and 0.03% Co over 1.5 metres

·     SQ AQ 21 - 0.15g/t Au over 20 metres

·     SQ AQ 22 - 0.12g/t Au over 22.5 metres

·     Rock chip sample grading 0.82% Cu, 0.21% Ni, 1.14g/t Pt, 0.79g/t Pd, 0.18g/t Au, 4g/t Ag, 16.1 g/t Se and 0.03% Co

·     'Magmatic  Cu - Ni - PGE - Au' 'style' of mineralisation appears similar to that observed in major deposits such as Aguablanca in Spain, certain parts of the Sudbury mines in Ontario, Canada; Voisey's Bay in Labrador Canada and Lac des Isles in Quebec, Canada

·     Highly promising geochemical signatures that could indicate an extensive mineralized system

·     Follow up drilling planned for this year

Chris Sangster, Director and CEO of Scotgold said:

"The results from the AQ drilling program have shown an area of highly anomalous gold and platinum group elements (PGE) with copper, nickel and cobalt over the Sron Garbh mafic complex. The potential deposit style - 'magmatic Cu - Ni - PGE - Au' -  adds an exciting new dimension to Scotgold's exploration program  and represents a significant new target in addition to the narrow vein gold and other targets identified elsewhere within the Scotgold's licence areas. Scotgold are keen to advance further work in the area as soon as possible."

Dr Dave Holwell of the University of Leicester's Department of Geology and contributing author to the recent Society of Economic Geologists publication "Magmatic Ni - Cu - PGE deposits" has visited the site and has reviewed the current results.  He commented: 

"This is most certainly an exciting discovery. The mineralisation at Sron Gharb has the characteristics of a classic magmatic Cu-Ni sulphide deposit with elevated precious metals. The ratios of sulphur and selenium indicate that the magma has been contaminated by sulphur-bearing crustal rocks - a key factor in helping to generate deposits of this kind. Intriguingly, the geochemical signatures show that the sulphides cannot have gained their high precious metal contents without the presence of a much larger magmatic system than is current exposed. If this has been preserved beneath the current surface (as a larger intrusion or conduit system), it could represent a potential host for massive sulphide mineralization at depth."

Sron Garbh 2011 exploration

The Sron Garbh instrusive complex is situated 2km from Tyndrum, outside the border of the National Park and about 5 km northeast of the Cononish gold and silver deposit (refer to Figure 1 available at www.scotgoldresources.com under ASX releases).

During 2011, Scotgold mapped the complex in more detail and identified a number of differing rock types including 'gabbroic / appinitic' and dioritic 'phases' (refer to Figure 2 available at www.scotgoldresources.com under ASX releases).

A check rock chip sample in the vicinity of a high Cu - Ni sulphide occurrence previously sampled, returned a value of 0.18g/t Au, 4.3 g/t Ag, 0.82% Cu, 0.21% Ni and 0.03% Co.

The sample was re-assayed for Platinum and Palladium and returned values of 1.14g/t Pt and 0.79g/t Pd (Assays for other PGEs (Osmium, Iridium, Rhodium, and Ruthenium) are yet to be conducted).

An initial AQ diamond core program was undertaken to examine and sample the differing igneous rock types found near surface within the complex (see Figures 2 and 3 available at www.scotgoldresources.com under ASX releases).

Fifteen AQ diamond drillholes were completed and selected results are shown in Table 1 below.

Table 1 Selected AQ drill intercepts at Sron Garbh

HOLE NO.	FROM	Interval	Au g/t	Pd g/t	Pt g/t	Ag g/t	Co %	Cu %	Ni %	Se g/t	Comment
SGAQ 14	11.60	0.65	0.19	0.56	0.41	3.9	0.03	0.61	0.16	9.3	'Leopard rock'
SQAQ 15	4.75	1.25	0.08	0.43	0.35	3.4	0.02	0.58	0.17	5.6	'Leopard rock'
SGAQ 16	10.40	2.00	0.22	0.78	0.58	5.5	0.01	0.75	0.18	6.9	'Leopard rock'
SGAQ 17	13.00	1.00	0.01	0.10	0.07	0.7	0.01	0.15	0.11	3.2	'Leopard rock'
SGAQ 18	9.35	0.95	0.01	0.15	0.10	0.0	0.01	0.07	0.03	1.3	'Leopard rock'
and	15.00	3.00	0.26	0.00	0.00	11.3	0.00	0.01	0.01	0.0	Diorite
SGAQ 26	19.60	1.00	0.11	0.31	0.37	1.0	0.04	0.65	0.21	12.5	'Leopard rock'
SGAQ 28	4.70	1.50	0.03	0.29	0.25	2.7	0.03	0.17	0.12	7.1	'Leopard rock'
SGAQ 20	18.85	5.35	0.14	0.00	0.00	0.6	0.00	0.00	0.00	<1.0	Fe rich diorite
SGAQ 21	5.00	20.00	0.15	0.00	0.00	1.0	0.00	0.00	0.00	<1.0	Fe rich diorite
SGAQ 22	1.00	22.50	0.12	0.00	0.00	<0.5	0.00	0.00	0.00	<1.0	Fe rich diorite

Intervals combined from consecutive assays over 0.1g/t Au, Pd or Pt

Note holes SGAQ 13, 19, 24 ,25, 27 - no Au Pd Pd assays above 0.1g/t, holes SGAQ 23A, B and 29 abandoned

Full drill statistics are shown in Appendix 1.

Drilling has intersected highly anomalous grades of Gold, Platinum, Palladium, Copper Nickel and Cobalt, in and close to the 'Gabbroic / Appinitic' zone which appears to form an outer annular ring to the complex. Mineralisation of pyrrhotite, minor chalcopyrite and pentlandite is seen to be contained in 'sulphide blebs' in a 'leopard rock' textured zone. (See Figures 4 and 5 available at www.scotgoldresources.com under ASX releases).

These characteristics are diagnostic of the world - wide 'magmatic Cu - Ni - PGE - Au' group of deposits associated with mafic / ultramafic intrusives such as Aguablanca in Spain, certain parts of the Sudbury mines in Ontario, Canada; Voisey's Bay in Labrador Canada and Lac des Isles in Quebec, Canada. Such deposits occur as sulphide concentrations (massive through to disseminated sulphides) associated with a variety of mafic and ultramafic magmatic rocks.

In addition to the Cu - Ni PGE Au mineralization associated with the gabbroic / appinitic rim, a separate low grade but wide zone of gold mineralisation occurs associated with quartz veinlets in the 'iron rich' dioritic core of the complex.  This mineralisation possibly represents a later or earlier phase to the intrusion which in its own right, warrants further follow up.

The complex has currently observed maximum dimensions of around 210m (N-S) and 180m (W-E) (refer to Figure 2 available at www.scotgoldresources.com under ASX releases) although not all contacts are fully exposed and appears to dipping semi vertically through the surrounding host sequences.

Follow up work planned for 2012 at Sron Garbh will include further AQ drilling to better define the extent of the complex, possible ground based geophysics to examine the potential for the development of massive sulphide zones within the complex at depth, followed by NQ drilling to determine if grades and widths of mineralisation improve at depth.

Previous exploration at Sron Garbh

Historical exploration work by Ennex International identified a large gold / copper soil anomaly over the Sron Garbh complex (refer to Figure 3 available at www.scotgoldresources.com under ASX releases) but follow up work was restricted to gold bearing quartz vein exposures in the surrounding areas at Coire Challein, Beinn Beag, Wee Lochan and O'Connachers Hush.

Work conducted by Scotgold geologists and by an MSc student in 2009 further examined gold bearing quartz vein occurrences in the area of the complex and a number of rock chip samples were taken of sulphide rich material from within the complex which returned a peak value of 0.29g/t Au, 2.1g/t Ag, 1.03% Cu, 0.09 % Ni, 0.04% Co.

Table 2 Selected rock chip results over Sron Garbh complex

	E	N	Au g/t	Ag g/t	Cu%	Ni%	Co%	Se g/t	Pt g/t	Pd g/t	Comment
FURB 15	232401	733202	0.29	2.1	1.03	0.09	0.04	12.0			Not assayed for Pt / Pd
SG17	232446	732997	0.05	1.0	0.23	0.08	0.01	<10			Not assayed for Pt / Pd
SG18	232446	732997	0.06	1.9	0.52	0.30	0.02	10.3			Not assayed for Pt / Pd
SRON888	232398	733195	0.02	4.3	0.82	0.21	0.03	16.1	1.14	0.79

Scotgold's geophysical consultant, Mr. Kim Frankcombe of ExploreGeo examined the existing British Geological Survey airborne magnetic and gravity data over the area surrounding Sron Garbh. Figure 6 (available at www.scotgoldresources.com under ASX releases) shows the interpreted outline of a possible 'high density zone' measuring about 3.5km by 1.5km derived from the 3D inversion of the BGS gravity data located over the Sron Garbh complex. Also plotted is the analytic signal of the Total Magnetic Intensity which indicates a possible low intensity anomaly to the west of the complex, both of which may represent extensions to the Sron Garbh complex at depth.

(Note: Airborne magnetic data was collected during between 1955 and 1965 over 1600 - 2000m spaced flight lines. Gravity data was collected at approximately 2km point spacing during 1955 - 1975). 

The spacing of both gravity and magnetic data is insufficient for target resolution or definition and it is possible that other similar bodies may exist in the area and Scotgold is planning to conduct a closer spaced airborne magnetic and radiometric survey over this and a wider area during 2012 subject to obtaining the necessary civil aviation approvals. 

Evidence of the occurrence of platinum / palladium has been registered previously in Scotgold's licence areas. During initial AQ drilling of the breccia pipe field at Beinn Udlaidh, a number of AQ holes were sampled for Pt and Pd and returned low but anomalous Pt / Pd values in places (up to 0.12g/t Pd and 0.03g/t Pt) in the breccias, indicating that some of these pipes may be tapping a similar or same mafic / ultramafic source.

Tenure

Scotgold's Crown licences give it the right to prospect for and give an option to enter into a lease for gold and silver. Other minerals generally belong to the landowner. Scotgold currently holds an Access Agreement to conduct exploration with the relevant landowner and a first right to negotiate a mineral lease.

For further information please contact

United Kingdom:

Scotgold Resources Limited	Westhouse Securities Limited	Bankside Consultants
John Bentley (Chairman) Chris Sangster (CEO)	Richard Baty / Petre Norton	Simon Rothschild / Elena Kuza
Tel: [phone]	Tel: [phone]	Tel [phone]

Australia:

Scotgold Resources Limited	Professional Public Relations
Shane Sadleir (Non-Executive Director)	Belinda Newman
Tel:       [phone] Mobile: [phone]	Tel:       [phone] Mobile: [phone]

Competent Person's Statement:

The information in this report that relates to Exploration Results is based on information compiled by Mr David Catterall. Pr Sci Nat, who is a member of the South African Council for Natural Scientific Professions. Mr Catterall is employed as a consultant to Scotgold Resources Ltd. Mr Catterall 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 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Catterall consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Forward Looking Statements:

This release includes certain "forward looking statements." All statements, other than statements of historical fact, are forward looking statements that involve various risks and uncertainties.

There can be no assurances that such statements will prove accurate and actual results and future events could differ materially from those anticipated in such statements.

Appendix 1 Drill Statistics

Hole No.	Easting	Northing	Altitude	Dip	Azimuth	EOH	Comment
SGAQ13	232390	733199	435	-45	146	20	Gabbro / diorite
SGAQ14	232412	733191	430	-35	261	15	Gabbro / diorite
SGAQ15	232411	733150	453	-40	217	13	Gabbro / diorite
SGAQ16	232419	733133	448	-15	290	17	Gabbro / diorite
SGAQ17	232360	733199	454	-30	205	19	Gabbro / diorite
SGAQ18	232305	733128	500	-35	170	23	Gabbro / diorite
SGAQ19	232333	733096	496	-8	260	17	Gabbro / diorite
SGAQ20	232353	733040	493	-40	60	24	Fe rich diorite
SGAQ21	232378	733023	487	-27	280	25	Fe rich diorite
SGAQ22	232385	733004	486	-35	44	24	Fe rich diorite
SGAQ23A	232313	732991	499	-27	318	2	Abandoned
SGAQ23B	232313	732991	499	-48	316	2	Abandoned
SGAQ24	232312	733060	506	-20	272	29	Diorite
SGAQ25	232321	733027	497	-25	285	24	Diorite -not sampled
SGAQ26	232337	733114	492	-25	275	25	Diorite
SGAQ27	232250	733080	523	-40	190	18	Gabbro / diorite
SGAQ28	232238	733085	528	-30	225	24	Gabbro / diorite
SGAQ29	232228	733084	536	-24	180	11	Abandoned

Background

1 Scotgold Resources

·     Scotgold Resources is a mining exploration and development company listed on the Australian Securities Exchange in January 2008 and the AIM market of the London Stock Exchange in the UK in February 2010.

·     The Company was formed with its sole focus on exploring for gold and silver in Scotland, with the already identified Cononish Gold and Silver Project as its core asset. Once in production, the Project will be Scotland's first commercial gold mine.

·     Scotgold acquired the Cononish Gold and Silver Project in 2007 and has been working towards bringing the project to production in conjunction with its ongoing exploration efforts at Cononish and in the south west Grampians.

·     In April 2011 Scotgold announced that it had accepted an offer of a Regional Selective Assistance (RSA) grant from economic development agency, Scottish Enterprise, of up to £600,000 for the establishment of mine facilities and job creation, conditional on the firm obtaining planning permission.

·     In July 2011 Scotgold submitted its reapplication for planning permission, which was recommended for approval in October 2011 subject to finalizing conditions and various legal agreements

·     In February 2012, the Decision Notice granting planning permission was issued by the Planning Authority

2. Cononish Gold and Silver Project

·     The Cononish Gold and Silver project consists of the establishment of a small underground mining operation with associated processing facilities and infrastructure. In production, it is estimated the mine would produce around 20,000ozs of gold and 80,000 ozs of silver annually.

·     A scoping study on the Cononish Project completed by Australian Mining Consultants Ltd (AMC) in mid 2009 indicated positive returns using a gold price of US$ 720 / oz (GBP£450 /oz). At the current gold price of around US$ 1700 / oz (GBP £1090 / oz), the Project has the potential to generate significant cashflows for the Company.  Based on this 2009 study, at a gold price of US$ 1270 / oz (GBP£800 / oz), the Project would generate around US$ 87 million (GBP £55 million) free cashflow over its lifetime. Scotgold is in the process of updating this study prior to a production decision.

 

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