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SolGold PLC (SOLG)

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Tuesday 13 November, 2018

SolGold PLC

Cascabel Exploration Update

RNS Number : 0759H
SolGold PLC
13 November 2018
 

13 November 2018

SolGold plc

("SolGold" or the "Company")

 

Cascabel Exploration Update

Alpala Drilling Update

 

The Board of SolGold (LSE and TSX code: SOLG) is pleased to provide an update on recent drilling at the Company's Alpala Deposit in Northern Ecuador.

 

HIGHLIGHTS:

 

Ø 

Recent drilling highlights expected to add significantly to an updated Mineral Resource Estimate (MRE) projected for release in December 2018 include:

 

·   

Hole 69 (Alpala Western Limb): 852m @ 1.14% CuEq, including 502m @ 1.55% CuEq, and 152m @ 2.49%CuEq.

 

·   

Hole 68 (Alpala Central): 664m @ 1.53% CuEq (open at depth), including 348m @ 2.25% CuEq, (1.26%Cu, 1.57g/t Au).

 

·   

Hole 67 (Alpala Central): 1028m @ 1.29% CuEq, equating to over 1320m%CuEq, including 544m @ 2.17% CuEq and a zone of intense porphyry mineralisation containing visible gold (146m @ 4.07% CuEq, 1.96%Cu, 3.36g/t Au). 

 

·   

Hole 66 (Alpala NW): 633m @ 1.25% CuEq, including a zone of rich mineralisation containing visible gold (173m @ 2.46% CuEq, 1.36%Cu, 1.73 g/t Au).

 

·   

Hole 64 (Alpala NW-Trivinio): 402m @ 0.65% CuEq, including discovery of a new zone, north of the Alpala Breccia unit, containing primary bornite mineralisation (162m @ 0.95% CuEq) and warrants follow up drill testing which may lead to unearthing further evidence of a second system adjacent to the Alpala Deposit.

Ø 

An additional 82,400m metres of additional drilling (Holes 33-67) to be included in second MRE in December 2018 (Dec 2017 MRE estimated from only 53,616m of drilling). 

Ø 

Total metres drilled at Cascabel to date 160,000 (153,000 Alpala + 7,259 Aguinaga).

Ø 

Assays returned to date at Alpala - 137,000m.  Assays outstanding at Alpala -  16,000m.

Ø 

Approximately 20,000m of further drilling to be completed at Alpala in 2018.  2019 drilling campaign to continue to expand the deposit at Alpala SE, Alpala NW, Trivinio and Alpala Western Limb.

 

Commenting on today's release, SolGold Technical Services Manager, Benn Whistler, noted: "Typically, geologists associate visible gold with epithermal bonanza deposits or mesothermal and orogenic gold lode deposits.  However, in the right geological setting porphyry deposits can hold zones of extraordinarily high grade.  The fact that recent infill drilling at Alpala Central and Alpala Northwest has produced a number of very rich intersections of porphyry style 'B-type' quartz veining associated with visible gold, is a testament to the rare quality of the Alpala deposit."

 

References to figures and tables relate to the version visible in PDF format by clicking the link below:

http://www.rns-pdf.londonstockexchange.com/rns/0759H_1-2018-11-12.pdf

 

 

 

FURTHER INFORMATION

 

The Cascabel Project is located on the northern section of the prolific Andean Copper belt, renowned as the base for nearly half of the world's copper production.  The project area hosts mineralisation of Eocene age, the same age as numerous Tier 1 deposits along the Andean Copper Belt in Chile and Peru to the south.  The project base is located at Rocafuerte in northern Ecuador, approximately three-hour's drive north of Quito, close to water, power supply and Pacific ports (Figure 1).  SolGold holds an 85% registered and beneficial interest in ENSA (Exploraciones Novomining S.A.) which holds 100% of the Cascabel tenement.

 

SolGold is encouraged by recent drilling results, expected to further expand and enrich the existing resource base at Alpala.  The Company is also excited about notable drill hole results outside the previous resource area which promise further growth for the 2019 drilling campaign ahead. 

 

A data cut-off date for the (in progress) Mineral Resource Estimate (MRE) projected for release in December 2018, was effected in late October 2018 and includes drill holes 1 to 67. Highlights of selected assay results from Holes 1 to 67, expected to add significantly to the Dec 2018 Mineral Resource at Alpala are summarised in Table 1.

 

The Alpala deposit continues to grow beyond this, as exemplified by strong results achieved in Holes 68 and 69 (Table 2)

 

Table 2: Recent drilling results post data cut-off date for the (in progress) Mineral Resource Estimate (MRE) projected for release in December 2018.

 

Assay results for drilling on the Cascabel Project, including those included in this release, are currently performed by ALS Global in Lima, Peru.

 

High priority drill targets for 2019 include planned resource extensions at Alpala SE, Alpala NW, Trivinio and Alpala Western Limb (Figure 2).

 

The Company envisages further MRE updates in 2019 as the company moves beyond the Preliminary Economic Assessment (projected for release in January 2019) and towards a Pre-Feasibility Study as the project continues to mature.

 

Market Abuse Regulation (MAR) Disclosure

 

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of the Regulation (EU) No 596/2014 until the release of this announcement.

 

Qualified Person:

 

Information in this report relating to the exploration results is based on data reviewed by Mr Jason Ward ((CP) B.Sc. Geol.), Exploration Manager Global of the Company.  Mr Ward is a Fellow of the Australasian Institute of Mining and Metallurgy, holds the designation MAusIMM (CP), and has in excess of 20 years' experience in mineral exploration and is a Qualified Person for the purposes of the relevant LSE and TSX Rules.  Mr Ward 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

Nicholas Mather

SolGold Plc (Chief Executive Officer)

[email protected]

 

Tel: +61 (0) 7 3303 0665

        +61 (0) 417 880 448

Karl Schlobohm

SolGold Plc (Company Secretary)

[email protected]

 

Tel: +61 (0) 7 3303 0661

 

Anna Legge

SolGold Plc (Corporate Communications)

[email protected]

 

Tel: +44 (0) 20 3823 2131

Gordon Poole / Nick Hennis

Camarco (Financial PR / IR)

[email protected]

 

Tel: +44 (0) 20 3757 4997

Andrew Chubb / Ingo Hofmaier           

Hannam & Partners (Joint Broker)

[email protected]

 

Tel: +44 (0) 20 7907 8500

 

Clayton Bush / Trystan Cullen / Laura Hamilton

Liberum Capital Limited (Joint Broker)

[email protected]

 

Tel: +44 (0) 20 3100 2222

 

Follow us on twitter @SolGold_plc

 

 

Figure 1: Location of Cascabel project in northern Ecuador, highlighting the significant capital advantages held by the project, with proximity to ports, road infrastructure, hydro-electric power stations and the trans-continental power grid.

 

 

Table 1. Highlights the selected assay results from Holes 1 to 67, which are expected to add significantly to the Dec 2018 Mineral Resource at Alpala.

 

Figure 2: High priority drill targets for 2019 include planned resource extensions at Alpala SE, Alpala NW, Trivinio and Alpala Central Western Limb for the 2019 drilling campaign ahead. Drill target areas, based on extensions to existing block model at Alpala are highlighted by red polygons.

 

 

ABOUT SOLGOLD

 

SolGold is a leading exploration company focussed on the discovery and definition of world-class copper and gold deposits.  In 2017 SolGold's management team was recognised by the "Mines and Money" Forum as an example of excellence in the industry, and continue to strive to deliver objectives efficiently and in the interests of shareholders. SolGold is the largest and most active concession holder in Ecuador and is aggressively exploring the length and breadth of this highly prospective and gold-rich section of the Andean Copper Belt.

 

Ecuador dedicated to become a serious mining nation

Ecuador has, over the last 5 years, been recognised globally as a frontrunner in emerging mining nations as it develops regulatory and fiscal frameworks to facilitate the development of a fiscally, socially and environmentally strong and responsible mining industry.

 

Dedicated stakeholders

SolGold employs a staff of over 400 and at least 90% are Ecuadorean.  This is expected to grow as the operations at Alpala, and in Ecuador generally, expand. SolGold focusses its operations to be safe, reliable and environmentally responsible and maintains close relationships with its local communities. SolGold has engaged an increasingly skilled refined and experienced team of geoscientists using state of the art geophysical and geochemical modelling applied to an extensive data base to enable the delivery of ore grade intersections from nearly every drill hole at Alpala.  SolGold has 86 geologists, of which 25% are female, on the ground in Ecuador looking for copper and gold.

 

About Cascabel and Alpala

The Alpala deposit is the main target in the Cascabel concession, located on the northern section of the heavily endowed Andean Copper Belt, the entirety of which is renowned as the base for nearly half of the world's copper production.  The project area hosts mineralisation of Eocene age, the same age as numerous Tier 1 deposits along the Andean Copper Belt in Chile and Peru to the south.  The project base is located at Rocafuerte within the Cascabel concession in northern Ecuador, an approximately three hour drive on sealed highway north of Quito, close to water, power supply and Pacific ports.

 

Alpala has produced some of the greatest drill hole intercepts in porphyry copper-gold exploration history, as exemplified by Hole 12 (CSD-16-012) returning 1560m grading 0.59% copper and 0.54 g/t gold including, 1044m grading 0.74% copper and 0.54 g/t gold.

 

Having fulfilled its earn-in requirements, SolGold is a registered shareholder with an unencumbered legal and beneficial 85% interest in ENSA (Exploraciones Novomining S.A.) which holds 100% of the Cascabel concession covering approximately 50km2.  The junior equity owner in ENSA is required to repay 15% of costs since SolGold's earn in was completed, from 90% of its share of distribution of earnings or dividends from ENSA or the Cascabel concession. It is also required to contribute to development or be diluted, and if its interest falls below 10%, it shall reduce to a 0.5% NSR royalty which SolGold may acquire for US$3.5m.

 

Over 160,000m of diamond drilling has been completed on the project.  With numerous rigs currently active on the project, SolGold produces up to approximately 10,000m of core every month.  SolGold is encouraged by recent drilling results, expected to further expand and enrich the existing resource base at Alpala.  The Company is also excited about notable drill hole results outside the previous resource area which promise further growth for the 2019 drilling campaign ahead.  The 2019 drilling campaign will focus on further expansion of the existing resource base at Alpala, namely high priority drill targets at Alpala SE, Alpala NW, Trivinio and Alpala Western Limb. 

 

Since the publication of the Alpala Maiden Mineral Resource Estimate in January 2018, which outlined a contained metal inventory of 5.2 million tonnes of copper and 12.6 million ounces of gold, the Company has more than doubled both drilled and reported meterage and will produce a revised resource statement addressing the evident growth in the size of the deposit at the conclusion of the current Alpala drill programme.  Investors should consult the technical report dated 18 December 2017 for a detailed account of the assumptions on which the estimates were based as well as any known legal, political, environmental and other risks that could materially affect the development of the resources.

 

Getting Alpala advanced towards development

SolGold has appointed feasibility management to initially address the production of a preliminary economic assessment (PEA), prior to the prefeasibility and feasibility studies.

 

The resource at the Alpala deposit boasts a high grade core which, in the event of the construction of a mine, is targeted to facilitate early cashflows and an accelerated payback of initial capital. SolGold is currently investigating development and financing options available to the company for the development of Cascabel on reaching feasibility.

 

SolGold's regional push

SolGold is using its successful and cost efficient blueprint established at Alpala, and Cascabel generally, to explore for additional world class copper and gold projects across Ecuador.  SolGold is the largest and most active concessionaire in Ecuador having recognised as early as 2014 that the country hosted the same untested prospectivity as the Northern Chilean section of the Andean Copper Belt, which accounts for some 25% of the world's copper resources.  

 

The Company believes Alpala is just the beginning for SolGold in Ecuador.  The Company wholly owns four other subsidiaries active throughout the country that are now focussed on ten high priority gold and copper resource targets, several of which the Company believes have the potential, subject to resource definition and feasibility, to be developed in close succession or even on a more accelerated basis from Alpala. 

 

SolGold is listed on the London Stock Exchange and Toronto Stock Exchange (LSE/TSX: SOLG).  The Company has on issue a total of 1,839,608,833 fully-paid ordinary shares; 21,250,000 share options exercisable at 40p and 129,887,000 share options exercisable at 60p.

 

See www.solgold.com.au for more information. Follow us on twitter @SolGold_plc

 

CAUTIONARY NOTICE

 

News releases, presentations and public commentary made by SolGold plc (the "Company") and its Officers may contain certain statements and expressions of belief, expectation or opinion which are forward looking statements, and which relate, inter alia, to interpretations of exploration results to date and the Company's proposed strategy, plans and objectives or to the expectations or intentions of the Company's Directors.  Such forward-looking and interpretative statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from such interpretations and forward-looking statements.

 

Accordingly, the reader should not rely on any interpretations or forward-looking statements; and save as required by the exchange rules of the TSX and LSE or by applicable laws, the Company does not accept any obligation to disseminate any updates or revisions to such interpretations or forward-looking statements.  The Company may reinterpret results to date as the status of its assets and projects changes with time expenditure, metals prices and other affecting circumstances.

 

This release may contain "forward‑looking information" within the meaning of applicable Canadian securities legislation.  Forward‑looking information includes, but is not limited to, statements regarding the Company's plans for developing its properties.  Generally, forward‑looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". 

 

Forward‑looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward‑looking information, including but not limited to: transaction risks; general business, economic, competitive, political and social uncertainties; future prices of mineral prices; accidents, labour disputes and shortages and other risks of the mining industry.  Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended.  There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.  Accordingly, readers should not place undue reliance on forward‑looking information.  The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

 

The Company and its officers do not endorse, or reject or otherwise comment on the conclusions, interpretations or views expressed in press articles or third-party analysis, and where possible aims to circulate all available material on its website.

 

The Company recognises that the term "World Class" is subjective and for the purpose of the Company's projects the Company considers the drilling results at the growing Alpala Porphyry Copper Gold Deposit at its Cascabel Project to represent intersections of a "World Class" deposit.  The Company considers that "World Class" deposits are rare, very large, long life, low cost, and are responsible for approximately half of total global metals production.

 

"World Class" deposits are generally accepted as deposits of a size and quality that create multiple expansion opportunities, and have or are likely to demonstrate robust economics that ensure development irrespective of position within the global commodity cycles, or whether or not the deposit has been fully drilled out, or a feasibility study completed.

 

Standards drawn from industry experts (1) Singer and Menzie, 2010; (2) Schodde, 2006; (3) Schodde and Hronsky, 2006; (4) Singer, 1995; (5) Laznicka, 2010) have characterised "World Class" deposits at prevailing commodity prices. The relevant criteria for "World Class" deposits, adjusted to current long run commodity prices, are considered to be those holding or likely to hold more than 5 million tonnes of copper and/or more than 6 million ounces of gold with a modelled net present value of greater than USD 1 Billion.

 

The Company and its external consultants prepared an initial mineral resource estimate at the Cascabel Project in December 2017. Results are summarised in Table B attached.

 

The Mineral Resource Estimate was completed from 53,616m of drilling, approximately 84% of 63,500m metres drilled as of mid-December 2017, the cut-off date for the maiden resource calculation.  There remains strong potential for further growth from more recent drilling results, and continue rapid growth of the deposit.

 

Any development or mining potential for the project remains speculative.

 

Drill hole intercepts have been updated to reflect current commodity prices, using a data aggregation method, defined by copper equivalent cut-off grades and reported with up to 10m internal dilution, excluding bridging to a single sample.  Copper equivalent grades are calculated using a gold conversion factor of 0.63, determined using an updated copper price of USD3.00/pound and an updated gold price of USD1300/ounce.  True widths of down hole intersections are estimated to be approximately 25-70%.

 

On the basis of the drilling results to date and the results of the Alpala Maiden Mineral Resource Estimate, the reference to the Cascabel Project as "World Class" (or "Tier 1") is considered to be appropriate. Examples of global copper and gold discoveries since 2006 that are generally considered to be "World Class" are summarised in Table A.

 

References cited in the text:

1.   

Singer, D.A. and Menzie, W.D., 2010. Quantitative Mineral Resource Assessments: An Integrated Approach. Oxford University Press Inc.

2.   

Schodde, R., 2006. What do we mean by a world class deposit? And why are they special. Presentation. AMEC Conference, Perth.

3.   

Schodde, R and Hronsky, J.M.A, 2006. The Role of World-Class Mines in Wealth Creation. Special Publications of the Society of Economic Geologists Volume 12.

4.   

Singer, D.A., 1995, World-class base and precious metal deposits-a quantitative analysis: Economic Geology, v. 90, no.1, p. 88-104.

5.   

Laznicka, P., 2010. Giant Metallic Deposits: Future Sources of Industrial Metal, Second Edition. Springer-Verlag Heidelberg.

 

 

Table A:  Tier 1 global copper and gold discoveries since 2006. This table does not purport to be exhaustive exclusive or definitive.

 

 

Resource

Category

Tonnage

(Mt)

Grade

Contained Metal

Cu (%)

Au (g/t)

CuEq (%)

Cu (Mt)

Au (Moz)

CuEq (Mt)

>1.1% CuEq

Indicated

70

1.1

1.3

1.8

0.7

2.8

1.2

Inferred

50

1.1

1.3

1.8

0.5

1.9

0.8

0.9 - 1.1% CuEq

Indicated

50

0.7

0.5

1.0

0.3

0.9

0.5

Inferred

50

0.7

0.5

1.0

0.4

0.9

0.5

0.3 - 0.9% CuEq

Indicated

310

0.4

0.2

0.5

1.2

2.3

1.6

Inferred

550

0.4

0.2

0.5

2.0

3.5

2.6

Total >0.3% CuEq

Indicated

430

0.5

0.4

0.8

2.3

6.0

3.4

Inferred

650

0.4

0.3

0.6

2.9

6.3

4.0

Table B: Alpala Mineral Resource statement as of 18 December 2017

 

Notes:

·         

Mr. Martin Pittuck, MSc, CEng, MIMMM, is responsible for this Mineral Resource estimate and is an "independent qualified person" as such term is defined in NI 43-101.

·         

The Mineral Resource is reported using a cut-off grade of 0.3% copper equivalent calculated using [copper grade (%)] + [gold grade (g/t) x 0.6] based on a copper price of US$2.8/lb and gold price of US$1,160/oz.

·         

The Mineral Resource is considered to have reasonable potential for eventual economic extraction by underground mass mining such as block caving.

·         

Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

·         

The statement uses the terminology, definitions and guidelines given in the CIM Standards on Mineral Resources and Mineral Reserves (May 2014).

·         

The MRE is reported on 100 percent basis.

·         

Values given in the table have been rounded, apparent calculation errors resulting from this are not considered to be material.

·         

The effective date for the Mineral Resource statement is 18th December 2017.

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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