Solomon Islands Update

RNS Number : 4414V

SolGold PLC

14 January 2013

 



14 January 2013

SolGold plc

("SolGold" or the "Company")

GUADALCANAL JOINT VENTURE - SOLOMON ISLANDS

UPDATE

The Board of SolGold plc (AIM code: SOLG) is pleased to provide an update on developments with the Guadalcanal Joint Venture (GJV), in the Solomon Islands.

As announced on September 11, 2012, the GJV partners, NVL Solomon Islands Limited ("NVL"), a subsidiary of Newmont Mining Corporation (NYSE:NEM), and SolGold sought expressions of interest for the divestment of the Guadalcanal Joint Venture ("GJV") project in the Solomon Islands. NVL managed this marketing exercise.

The outcome is that:

1.    SolGold has secured 100% ownership of the prospective Kuma prospecting licence (PL). This PL is currently undergoing a renewal process for a further 2 year extension of the prospecting licence.

2.    NVL and SolGold have entered into an agreement with Gold Ridge Mining Limited (a wholly owned subsidiary of St Barbara Limited) who operates the only gold mine in the Solomon Islands at Gold Ridge.  The agreement provides for the parties, to co-operate in securing suitable tenure over an area covered by the 4 remaining PLs that make up the GJV for the benefit of Gold Ridge Mining Limited, and for Gold Ridge Mining Limited to acquire relevant exploration data generated by the JV. Completion of the agreement and cash consideration payable under it is subject to various conditions precedent related to the tenure outcome. The maximum amount payable to SolGold if all conditions are satisfied is US$494,000, which reflects SolGold's JV equity position of 26%.

The Kuma PL is considered prospective for epithermal gold and porphyry gold-copper systems. Acquisition of 100% ownership of this project is consistent with SolGold building a portfolio of high quality gold-copper opportunities in the most endowed gold-copper belts in the world. The Kuma PL is located on the main island of Guadalcanal with close proximity to the capital Honiara. Previous exploration by Solomon Gold, and by Newmont during the period of the GJV, identified significant areas of alteration and anomalous gold and copper geochemistry. The project area contains significant areas of altered rock consistent with a high sulphidation epithermal environment, and geochemical and geophysical signatures that suggest the potential for porphyry style mineralisation. The area of extensive alteration at Kuma has never been drilled. The technical data is currently under further review and a technical update will be provided in due course.

An exploration program will commence once the PL renewal has been granted and access agreements signed with traditional owners.

Malcolm Norris, CEO of SolGold commented: "We are pleased with this outcome. It provides exposure to a cash settlement for a portion of the GJV, and delivers us a highly prospective, 100% held project at no cost, supported by significant historical data, and manageable within our current portfolio. This is consistent with our stated strategy as we continue to build a robust gold-copper portfolio."

Qualified Persons

Information in this report relating to the exploration results 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 Malcolm Norris                                                                                       Tel: [phone]

SolGold plc (Chief Executive and Managing Director)

[e-mail] 

Mr Karl Schlobohm                                                                                      Tel: [phone]

SolGold plc (Company Secretary)

[e-mail] 

Mr Ewan Leggat / Katy Birkin                                                                   Tel: [phone]

SP Angel Corporate Finance LLP (Broker)

[e-mail] 

Mr Stephen Weir                                                                                         Tel: [phone]

RFC Ambrian Limited (Nominated Advisor)

[e-mail] 

NOTES TO EDITORS

SolGold's exploration projects are located in northern Ecuador, Australia, and the Solomon Islands. In Ecuador, they comprise of a JV with Cornerstone Capital Resources on the Cascabel gold-copper project. In Australia, SolGold holds 100% of the Rannes, Mt Perry, Cracow West and Normanby Projects, all in southeast Queensland and in the Solomon Islands they comprise the Fauro Project (located on Fauro Island), and the Guadalcanal Joint Venture with Newmont Mining Corporation.

In July 2012, SolGold and Cornerstone Capital Resources Inc. announced that they had signed a Definitive Option Agreement 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 Indicated and 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).

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

In the Solomon Islands, a JV partner is being sought for the Fauro project to pursue drilling of gold-copper targets defined in the 2011 exploration program. The Guadalcanal Joint Venture (GJV) with NVL Solomon Islands Limited (a subsidiary of NYSE-listed Newmont Mining Corporation) is to be terminated following finalisation of divestment agreements outlined in this announcement.

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, investment, finance and law.  Board and Management have significantly vested interests in the Company, holding approximately 17.5% 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 a total of 424,242,966 fully-paid ordinary shares, 10,700 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.

 

END

 

 

JVESFLSMLFDSESF