SolGold Signs Definitive Agreement on Cascabel

RNS Number : 3307I

SolGold PLC

24 July 2012

 

24 July 2012

SolGold Plc

("SolGold" or the "Company")

Definitive option agreement signed with Cornerstone with $2.8 million first year exploration program agreed for the Cascabel gold-copper-silver property, Ecuador.

SolGold Plc ("SolGold") (AIM code: SOLG) and Cornerstone Capital Resources Inc. ("Cornerstone") (TSXV-CGP) (F-GWN) (B-GWN) (OTC-CTNXF) announce that they have signed a definitive option agreement finalizing the terms of an option/joint venture arrangement for Cornerstone's 100% owned 5,000 hectare Cascabel gold-copper-silver property in northern Ecuador and replacing their letter of intent announced on April 10, 2012. 

The Cascabel property is located in the same belt, and approximately 70km to the north, of the Junin porphyry copper deposit (982Mt @ 0.89% copper), and in the same belt and 550km south of the giant La Colosa gold porphyry system (24Mozs gold in resources).

Solomon Gold may acquire up to 85% of the Cascabel project through an earn-in for an initial 65% interest in the Cascabel property by making a series of private placements in Cornerstone totaling CAD$850,000, and spending US$7.8 million on exploration over 4 years (including US$800,000 in the first year if drilling commences), and an additional 20%, (taking its interest to 85%) by funding further work towards completion of a bankable feasibility study, capped at an expenditure by SolGold of US$20 million.

Exploration Program

SolGold and Cornerstone have agreed to an aggressive first year exploration program totalling US$2.8M (covering the period May 2012 through April 2013).  This staged program includes 1:25,000 scale reconnaissance geological mapping, prospecting, stream sediment and rock sampling, and an airborne magnetic and radiometric survey which will cover the entire property. Detailed exploration will follow over the most prospective areas. Identified targets will be prioritized for drill testing in late 2012, pending receipt of requisite permits.  An Environmental Impact Study required for advanced stage exploration (drilling) will be carried out later this year and a community relations program is currently being implemented.

Exploration activities commenced in May 2012.  SolGold will update shareholders on the progress of the exploration programme as results are delivered and compiled.

Commenting, Malcolm Norris, Chief Executive Officer of SolGold said: "Our move into Ecuador, with an outstanding copper-gold project, and a very reputable partner such as Cornerstone, is exciting and we are confident will deliver success.  We will move towards drilling as quickly as possible."

About Cascabel

The Cascabel property is located approximately 120km north of Quito and 20km south of the Colombian border.  Access is very good via a paved road from the provincial capital city of Ibarra to San Lorenzo city, on the Pacific coast, and secondary gravel roads to the central part of the property.  An environmental license for the initial exploration phase was granted by the Ministry of Environment on July 12, 2011.  Exploration work including geology, geochemistry, geophysics and hand-dug trenching and pitting, is allowed for a 4-year period under this environmental license.

Terms of the agreement, a description of the property and preliminary exploration results were described in SolGold's AIM announcement dated April 10, 2012.  Maps showing the geology and exploration results to that date may be viewed at www.cornerstoneresources.com 

The Cascabel gold-copper porphyry project is located within the Andean western cordillera, host to numerous Tier 1 world class copper-gold deposits through Chile, Peru, Ecuador and Colombia.

Qualified Persons

Information in this report relating to the exploration results, gold:silver ratios and cut-off grades is based on data reviewed by Mr Malcolm Norris (B.Sc. Hons, MSc), the Chief Executive Officer of the Company.  Mr Norris 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 Norris 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]

SolGold Plc (Company Secretary)

[e-mail]   

Mr Ewan Leggat                                                                                                                Tel: [phone]

Fairfax I.S. PLC (Broker)

[e-mail]  

Mr Stephen Weir                                                                                                            Tel: [phone]

RFC Ambrian Limited (Nominated Advisor)

[e-mail]  

Mr Dominic Barretto                                                                                                      Tel: [phone]

Yellow Jersey PR (PR & IR)

[e-mail]  

NOTES TO EDITORS

SolGold's exploration projects are located in northern Ecuador, Australia, and the Solomon Islands. In Australia, they comprise the Rannes, Mt Perry, Cracow West and Normanby Projects, all in south-east Queensland. In the Solomon Islands they comprise the Fauro Project (located on Fauro Island), and the Guadalcanal Joint Venture with Newmont Mining Corporation, and in Ecuador a JV with Cornerstone Capital Resources on the Cascabel gold-copper project.

In April 2012, SolGold and Cornerstone Capital Resources Inc. announced that they had signed a binding Letter of Intent whereby SolGold may acquire up to 85% of Cornerstone's 100% owned 5,000 hectare Cascabel gold-copper-silver property in northern Ecuador.

The Cascabel project is located approximately 120 km north of Ecuador's capital, Quito, 20 km south of the Colombian border, and 75 km inland from the coastal city of San Lorenzo. The gold-copper porphyry project is located within the Andean western cordillera, host to numerous Tier 1 world class copper-gold deposits through Chile, Peru, Ecuador and Colombia.

At the Rannes project SolGold has announced Inferred resources of 18.7 million tonnes at 0.9 g/t gold equivalent (gold + silver) for 550,146 ounces of gold equivalent (296,657 ounces of gold and 10,137,736 ounces of silver; see announcement dated 23 May 2012 for details of the resource statement and gold equivalent ratios).  The 2012 exploration program, including drilling to define new ore positions and grow the resource, is underway.

Exploration continues at Mt. Perry, Normanby and Cracow West.

In the Solomon Islands, the 2012 exploration program on the Fauro project has been delayed while a JV partner is sought to pursue drilling of gold-copper targets defined in the 2011 exploration program. The 2012 Guadalcanal Joint Venture exploration program with NVL Solomon Islands Limited (a subsidiary of NYSE-listed Newmont Mining Corporation) is in progress.

SolGold's strategy is to be an integrated gold and copper discoverer, developer and miner.

SolGold's Board includes accomplished professionals with strong track records in the areas of exploration, mine development in Australasia and Melanesia, investment, finance and law.  Board and Management have significantly vested interests in the Company, holding approximately 17.8% of its issued share capital.

SolGold 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 346,715,267 fully-paid ordinary shares, 1,070 Convertible Redeemable Preference Shares, 9,472,000 options exercisable at 50p, 1,250,000 options exercisable at 28p and 1,250,000 options exercisable at 14p on issue.  Further details concerning the Company's key projects and personnel can be found at www.solgold.com.au.

About Cornerstone

Cornerstone Capital Resources Inc. is a mineral exploration company based in Mount Pearl, Newfoundland and Labrador, Canada, with a diversified portfolio of projects in Canada, Ecuador and Chile, and a strong technical team that has proven its ability to identify, acquire and advance properties of merit. The company's business model is based on generating exploration projects whose subsequent development is funded primarily through joint venture partnerships. Commitments from JV partners constitute significant validation of the strength of Cornerstone's projects.

Further information is available on Cornerstone's website: www.cornerstoneresources.com

 

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