TIDMSOLG
RNS Number : 2166V
SolGold PLC
01 November 2017
1 November 2017
SolGold plc
("SolGold" or the "Company")
Cascabel Exploration Update
Strong growth from assay results in Holes 26-D1 and 28 at
Alpala.
Holes 29-D1, 29-D2 and 32 intercept Alpala East extension.
The Board of SolGold (LSE and TSX code: SOLG) is pleased to
provide an update on the copper gold assay results for Holes 26-D1,
and 28 and the progress of drilling at the Alpala copper gold
porphyry deposit, the most advanced of several targets at Cascabel,
the Company's 85% owned copper-gold porphyry project in
Ecuador.
HIGHLIGHTS:
Ø Hole 26-D1 (Alpala Northwest) ended in significant
mineralisation and is not closed at depth. Assay results
returned:
- 748.7m @ 0.85% CuEq (0.58% Cu, 0.43 g/t Au) from 914m (open at depth), incl.
- 650.7m @ 0.94 % CuEq (0.64% Cu, 0.48 g/t Au) from 1012m (open at depth), incl.
- 512.7m @ 1.05% CuEq (0.70% Cu, 0.55 g/t Au) from 1150m (open at depth).
Ø Hole 28 (Alpala Central) also ended in mineralisation and is
not closed at depth. Assay results returned:
- 938.2m @ 0.82% CuEq (0.59% copper, 0.36 g/t gold) from 630m (open ended),
- 550.0m, @ 1.06% CuE1 (0.74% copper, 0.52 g/t gold) from 902m.
Ø Intersections achieved in Hole 26-D1 extend mineralisation
approximately 100m northeast of the previous boundary of the
deposit.
Ø Intersections achieved in Hole 28 extend mineralisation
approximately 100m south of Hole 16 and the known southeast edge of
the Alpala Central deposit.
Ø Intense stockwork veining and visible copper sulphide
mineralisation logged in strategic Holes 29-D1, 29-D2, 32, confirm
the presence of strongly mineralised intrusions some 200m to the
east of the main deposit, making it 25% to 35% wider.
Ø Hole 34 testing the promising Alpala West target.
References to figures and tables relate to the version of this
release on the Company's website (www.solgold.com.au) or visible in
PDF format by clicking the link below:
http://www.rns-pdf.londonstockexchange.com/rns/2166V_-2017-11-1.pdf
Commenting on the results and current drilling, SolGold
Technical Services Manager, Benn Whistler said:
"Hole 26-D1 and Hole 28 assay results have made significant
additions to the growing Alpala deposit. These holes bring the
approximate Exploration Target at Alpala to an upper range of one
billion tonnes at approximately 0.9% copper equivalent at a 0.3%
copper equivalent cut-off. This is very encouraging ahead of the
maiden MRE (Mineral Resource Estimate), especially in the context
of recent visible mineralisation logged in Holes 29-D1, 29-D2, and
32 which confirmed the Alpala East target, and an extension of the
mineralised envelope at Alpala some 200m to the east of the
previous boundary. This equates to a 25% to 35% increase in the
known width of the greater Alpala system.
Open ended intersections in Holes 26 and 26-D1 point to the
growing likelihood of a robust porphyry centre at Alpala Northwest,
and we envisage major growth in the Alpala system towards northwest
in the coming quarter.
The expansion of the drilling fleet at Alpala to seven rigs now,
and a further four rigs arriving this month, along with the arrival
of the second Devico directional drilling team is already giving
SolGold the extensions to the Alpala system which were predicted on
the basis of continually evolving geological, geochemical and
magnetic models.
We anticipate major growth in the size of the deposit at Alpala
over the coming year as we drill approximately 120,000 metres with
12 drill rigs. We anticipate an answer soon on the very promising
Alpala West target in Hole 34, currently drilling. Next year we
will be drill testing Carmen, Trivinio, Parambas, Moran, and
Cristal, as well as the exciting Aguinaga target. Completing the
magnetic modelling and the Spartan-Orion electrical surveys first
is an important step."
JORC Code / NI 43-101 Cautionary Statement: The potential
quality and grades set out in the above Exploration Target are
conceptual in nature as there has been insufficient exploration to
define a mineral resource, and it is uncertain if further
exploration will result in the Exploration Target being delineated
as a mineral resource.
FURTHER INFORMATION:
Drilling Results
SolGold's (85% owned) Alpala deposit continues to grow with each
new drill hole as drilling focuses on high grade porphyry centres
at Alpala Northwest, Alpala Central, Alpala East and Alpala
Southeast. Over 53,500m of drilling has been completed to date
along the greater Alpala trend (Figure 1), with the use of the
directional drilling techniques for deviated path holes from
existing parent holes (Devico(tm) ), delivering significant time
and cost advantages as the Company focusses on delivering drill bit
time in mineralisation. Assay services are undertaken by ALS
Laboratories in Lima, Peru.
Hole 26-D1 (Rig 4 Alpala Northwest) was a "daughter" hole
drilled to the southwest off "parent" Hole 26 from 788.4m. Hole
26-D1 was stopped prematurely at a depth of 1662.7m within strongly
mineralised diorite porphyry due to operational complications
experienced by the drilling contractor.
The open-ended intersections achieved in Hole 26-D1 indicate the
extension of high-grade mineralisation open to the northeast
approximately 100m northeast of Hole 15R2, which previously
returned 830.0m @ 0.93% CuEq (0.63% Cu, 0.46 g/t Au).
Hole 28 (Rig 3 Alpala Southeast) was drilled to the west from
the same drill site as previous Holes 21, 25, and 27, and was
completed at a depth of 1568.2m.
The intersections achieved in Hole 28 extended mineralisation
approximately 100m south of Hole 16, which previously returned 936m
@ 1.35% CuEq (0.75% Cu, 0.95 g/t Au).
Intersections achieved in Hole 26-D1 and Hole 28 at selected
cut-off grades are detailed in Table 1.
NOTE: Data Aggregation Method: Intercepts reported using copper
equivalent cutoff grades with up to 10m internal dilution,
excluding bridging to a single sample. Minimum intersection length
50m. Gold Conversion Factor of 0.63 calculated from a copper price
of US$3.00/lb and a gold price US$1300/oz. True widths of downhole
interval lengths are estimated to be approximately 25% to 50% for
individual holes. No hole has entirely crossed the mineralised zone
and it is therefore not possible to calculate the true width of the
deposit from a single drill hole. Cut-off grades are selected with
reference to comparisons for block cave mines globally.
Table 1: Selected intervals from Hole 26-D1 and Hole 28.
Current Drill Holes
Hole 26-D2 (Rig 4 Alpala Northwest) was a "daughter" hole
drilled to the southwest off "parent" Hole 26 from 778.2m depth.
Hole 26-D1 intersected strongly mineralised diorite and lesser
quartz-diorite porphyry over an (approximate) 470m interval from
1180m to 1650m. Hole 26-D2 infilled mineralisation between Holes
15R2, 7 and 13.
Hole 26-D2 was stopped at a depth of 1333.6m within strongly
mineralised diorite porphyry due to operational
complications experienced by the drilling contractor. Assay results are pending.
Hole 26-D3 (Rig 4 Alpala Northwest) is now underway, at a
current depth of 1243m. Hole 26-D3 is the third "daughter" hole
drilled off "parent" Hole 26 from 778.4m depth, and is testing for
depth extensions to mineralisation encountered in Holes 13, 7 and
26.
Hole 29 (Rig 5 Alpala East) is at a current depth of 901.0m,
Hole 29 is currently suspended whilst the third "daughter" Hole
29-D2 is drilled to completion, before the deepening of Hole 29
continues. Hole 29 is planned to test deeper high-grade extensions
along the eastern flank of the Alpala Central deposit.
Hole 29-D1 (Rig 5 Alpala East) was a "daughter" hole drilled
from "parent" Hole 29 from 450.2m depth, and was completed at
1168.4m. Hole 29-D1 intersected strongly mineralised diorite
porphyry and minor late stage hydrothermal breccia over an
(approximate) 202m interval from 966m to 1168.4m (Figure 2). Assay
results are pending.
Hole 29-D2 (Rig 5 Alpala East) is underway, at a current depth
of 1512m, as the second "daughter" hole drilled from "parent" Hole
29 from 901.0m depth. Hole 29-D2 intersected strongly mineralised
volcaniclastics rocks and diorite porphyry from approximately 1140m
depth, and continues drilling (Figure 3). Hole 29-D2 is planned to
extend mineralisation some 250m beneath that intersected in Hole
29-D1, and is planned to continue to at least 1500m depth, to test
for extensions below Holes 23R-D1 and 16.
Intense stockwork veining and visible copper sulphide
mineralisation logged in Holes 29-D1 and 29-D2, confirm the
presence of strongly mineralised intrusions some 200m to the east
of the main deposit.
Hole 30 (Rig 1 Alpala Central) is underway at a current depth of
1134m. Hole 30 is currently intersecting visibly mineralised
volcaniclastic rocks and diorite porphyry from approximately 592m
depth (Figure 4).
Hole 30 is designed to infill between Holes 22 and 27 and extend
mineralisation approximately 100m above the intersection achieved
in Hole 28.
Hole 30-D1 (Rig 1 Alpala Central) was a "daughter" hole drilled
from "parent" Hole 30 from 527.8m depth, and was completed at a
depth of 1109.8m, ahead of the deepening of the parent hole. Hole
30-D1 intersected volcanic host rocks and minor mineralised diorite
porphyry. Hole 30-D1 was planned to extend mineralisation between
Holes 19, 28 and 27, extending mineralisation approximately 150m
southeast of Hole 22. Assay results are pending.
Hole 31 (Rig 3 Alpala East) is underway at a current depth of
956m. Hole 31 is currently intersecting volcaniclastic rocks and
hydrothermal breccias, and is planned to infill mineralisation
between Holes 24-D1 and 27.
Hole 31-D1 (Rig 3 Alpala East) was a "daughter" hole drilled
from "parent" Hole 31 from 605.9m, and was completed at 1530.0m
depth, ahead of the deepening of the parent hole. Hole 31-D1
intersected weakly mineralised volcaniclastic rocks and diorite
porphyry from approximately 1248m to 1371m. Hole 31-D1 was planned
to infill mineralisation between Holes 24-D1 and 27. Assay results
are pending.
Hole 32 (Rig 2 Alpala East) is underway, at a current depth of
1236m, intersecting volcaniclastic rocks and local stockwork veins
and mineralised diorite porphyry, towards a planned depth of 1800m.
Hole 32 is planned to extend mineralisation at depth approximately
100m east of Hole 25.
Hole 33 (Rig 6 Alpala Central) is underway, at a current depth
of 709m, intersecting volcaniclastic rocks and hydrothermal
breccia, towards a planned depth of 1600m. Hole 32 is planned to
extend rich mineralisation northwest of Hole 17, and above Hole
9.
Hole 34 (Rig 7 Alpala West) is underway, at a current depth of
337m, intersecting volcaniclastic rocks, towards a planned depth of
2000m, testing the Alpala West porphyry copper-gold target, defined
by surface mapping, 3D geochemical modelling and 3D MVI magnetic
modelling.
Mineral Resource Estimate
The recent site visit by SRK Exploration consultants saw major
developments in the accuracy and predictive nature of the
geological modelling at Alpala. The geological auditing process
forming the basis of the Mineral Resource Estimate, has now
advanced the detailed hand contoured geological interpretations in
level plan and cross section, into accurate representation within
the Leapfrog(TM) 3D modelling environment.
This collaborative approach is resulting in a high-confidence
geological model that will accurately estimate the resource
potential, through incorporation of the Alpala genetic model,
deposit geometry, intensity of mineralisation and grade
distribution.
ABBREVIATIONS USED
CuEq - copper equivalent
Cu - copper
Au - gold
m - metres
incl. - including
Qualified Person:
Information in this report relating to the exploration results
is based on data reviewed by Mr Nicholas Mather (B.Sc. Hons Geol.),
the Chief Executive Officer of the Company. Mr Mather 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 JORC Code and NI 43-101. Mr Mather
supervised the preparation of this release and consents to the
inclusion of the information in the form and context in which it
appears.
Figure 1: Drill hole location plan, showing copper-percent
equivalent results and the traces of existing and planned drill
holes.
Figure 2: Selected examples of drill core intersected in Holes
29-D1 at Alpala East.
Figure 3: Selected examples of drill core intersected in Hole
29-D2 at Alpala East.
Figure 4: Selected examples of drill core intersected in Hole 30
at Alpala Central.
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.
By order of the Board
Karl Schlobohm
Company Secretary
Brisbane, Australia
CONTACTS
Mr Nicholas Mather Tel: +61 (0) 7 3303 0665
SolGold Plc (Executive Director) +61 (0) 417 880 448
nmather@solgold.com.au
Mr Karl Schlobohm Tel: +61 (0) 7 3303 0661
SolGold Plc (Company Secretary)
kschlobohm@solgold.com.au
Mr Ewan Leggat / Mr Richard Morrison Tel: +44 (0) 20 3470
0470
SP Angel Corporate Finance LLP
ewan.leggat@spangel.co.uk
Follow us on twitter @SolGold_plc
NOTES TO EDITORS
SolGold is a Brisbane, Australia based, dual LSE and TSX--listed
(SOLG on both exchanges) copper gold exploration and future
development company with assets in Ecuador, Solomon Islands and
Australia. SolGold's primary objective is to discover and define
world--class copper--gold deposits. The Board and Management Team
have substantial vested interests in the success of the Company as
shareholders as well as strong track records in the areas of
exploration, mine appraisal and development, investment, finance
and law. SolGold's experience is augmented by state of the art
geophysical and modelling techniques and the guidance of porphyry
copper and gold expert Dr Steve Garwin.
In October 2017, at the Mines and Money Americas Conference in
Toronto, SolGold's Nicholas Mather won the award for the CEO of the
Year - Latin America. SolGold won the Exploration Award for Latin
America, and Ecuador won the Country Award for Latin America.
The Company announced USD54m in capital raisings in September
2016 involving Maxit Capital LP, Newcrest International Ltd and DGR
Global Ltd, and a USD41.2m raising in June of 2017 largely from
Newcrest International with USD1.2m raised from Ecuadorean
investors. All of these raisings were undertaken at substantial
premiums to previous raisings, and SolGold currently has circa
USD60m in available cash to continue the exploration and
development of its flagship Cascabel Project.
Mr Craig Jones joined the SolGold Board on 3 March 2017,
nominated to the Board of SolGold by Newcrest Mining, now a 14.54%
shareholder in SolGold. Mr Jones is a Mechanical Engineer and is
currently the Executive General Manager Wafi-Golpu
(Newcrest-Harmony MMJV). He has held various senior management and
executive roles within the Newcrest Group, including General
Manager Projects, General Manager Cadia Valley Operations,
Executive General Manager Projects and Asset Management, Executive
General Manager Australian and Indonesian Operations, Executive
General Manager Australian Operations and Projects, and Executive
General Manager Cadia and Morobe Mining Joint Venture. Prior to
joining Newcrest, Mr Jones worked for Rio Tinto.
Cascabel, SolGold's 85% owned "World Class" (Refer
www.solgold.com.au/cautionary-notice/) flagship copper--gold
porphyry project, is located in northern Ecuador on the
under--explored northern section of the richly endowed Andean
Copper Belt. SolGold owns 85% of Exploraciones Novomining S.A.
("ENSA") and approximately 5% of TSX--V--listed Cornerstone Capital
Resources ("Cornerstone"), which holds the remaining 15% of ENSA,
the Ecuadorian registered company which holds 100% of the Cascabel
concession. Subject to the terms of existing agreements,
Cornerstone is debt financed by SolGold for its share of costs to
completion of a Feasibility Study ("Financing Option").
In terms of repayment, SolGold shall receive 90% of
Cornerstone's share of earnings or dividends from ENSA or the
Tenement to which Cornerstone would otherwise be entitled until
such time as the amounts so received equal the aggregate amount of
expenditures incurred by SolGold that, but for the Financing
Option, would have been payable by Cornerstone, plus interest
thereon from the dates such expenditures were incurred at a rate
per annum equal to LIBOR plus 2 per cent until such time as SolGold
is fully reimbursed.
The investments by Newcrest for 14.54% of SolGold endorses
Ecuador as an exploration and mining destination, the management
team at SolGold, the dimension, size and scale of the growing
Alpala deposit, and the prospectivity of Cascabel and its multiple
targets. The gold endowment, location, infrastructure, logistics
are important competitive advantages offered by the project.
To date SolGold has completed geological mapping, soil sampling,
rock saw channel sampling, geochemical and spectral alteration
mapping over 25km(2) , along with an additional 9km(2) of Induced
Polarisation and 14km(2) Magnetotelluric "Orion" surveys over the
Alpala cluster and Aguinaga targets.
SolGold has completed over 53,500m of drilling and expended over
USD50M on the program, which includes corporate costs and
investments into Cornerstone. This has been accomplished with a
workforce of up to 260 Ecuadorean workers and geoscientists, and 6
expatriate Australian geoscientists. The results of 39 holes
drilled (including re-drilled holes) and assayed to date have
produced some of the greatest drill hole intercepts in porphyry
copper-gold exploration history, as indicated 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.
The average grade of all metres drilled to date on the project
currently stands at 0.31% copper and 0.26 g/t gold. Intensive
diamond drilling is planned for the next 12 months with 12 drill
rigs expected to be operational by early 2018, targeting 126,000m
of drilling in 2018.
Cascabel is characterised by fifteen (15) identified targets,
"World Class" drilling intersections over 1km in length at
potentially economic grades, and high copper and gold grades in
richer sections, as well as logistic advantages in location,
elevation, water supply, proximity to roads, port and power
services; and a progressive legislative approach to resource
development in Ecuador.
To date, SolGold has drill tested 4 of the 15 targets, being
Alpala Northwest, Alpala Central, Hematite Hill, and Alpala
Southeast. Currently drill testing of Alpala Northwest, Alpala
Central and Alpala Southeast targets is underway, with drill
testing of the other priority targets to be considered following
the publication of the Company's maiden resource estimate for
Alpala, and the finalisation of further IP surveying and modelling
work currently underway.
The Alpala deposit is open in multiple directions and the
mineralised corridor marked for drill testing of the greater Alpala
cluster occurs over a 2.2km strike length from Trivinio in the
northwest to Cristal in the southeast. The mineralised corridor is
known to be prospective over approximately 700m width.
High priority targets within the Alpala cluster, at Moran
approximately 700m to the north, and at Aguinaga approximately
2.3km north east, are closely modelled by 3D MVI magnetic
signatures that currently encompass over 10Bt of magnetic rock.
Based on a strong spatial and genetic relationship between copper
sulphides and magnetite, this body of magnetic rock is considered
to be highly prospective for significant copper and gold
mineralisation, and requires drill testing.
SolGold is focussing on extending the dimensions of the Alpala
deposit including Alpala Northwest, Hematite Hill, Alpala South
East, Cristal, Trivinio, Alpala West, Alpala East, Carmen, Parambas
and Alpala South before completing a Maiden Resource Estimate and
then drill testing the other key targets within the Cascabel
concession at Aguinaga, Tandayama-America, Moran, and
Chinambicito.
The Company is currently planning further metallurgical testing
and completion of an independent Pre-Feasibility Study at Cascabel.
SolGold is investigating both high tonnage open cut and underground
block caving operations, as well as a high grade / low tonnage
initial underground development towards the economic development of
the copper gold deposit/s at Cascabel.
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 25-50%.
Following a comprehensive review of the geology and
prospectivity of Ecuador, SolGold and its subsidiaries have also
applied for additional exploration licences in Ecuador over a
number of promising porphyry copper gold targets throughout the
Country. To date 59 such concessions have been granted and
announced. SolGold is negotiating external funding options which
will provide the Company with the ability to have some of these
projects fully funded by a third party while focussing on
Cascabel.
In Queensland, Australia the Company is evaluating the future
exploration plans for the Mt Perry, Rannes and Normanby projects,
with drill testing of the Normanby project planned for the coming
quarter. Joint venture agreements are being investigated for a
joint venture partner to commit funds and carry out exploration to
earn an interest in the tenements.
SolGold retains interests in its original theatre of operations,
Solomon Islands in the South West Pacific, where the 100% owned,
but as yet undrilled, Kuma prospect on the island of Guadalcanal
exhibits surface lithocap characteristics which are traditionally
indicative of a large metal rich copper gold intrusive porphyry
system. SolGold intends in the future to apply intellectual
property and experience developed in Ecuador to target additional
"World Class" copper gold porphyries at Kuma and other targets in
Ecuador and the Solomon Islands.
SolGold is based in Brisbane, Queensland, Australia. The Company
is listed on the LSE and TSX, with both exchanges using the ticker
code: SOLG, and currently has on issue a total of 1,516,245,686
fully-paid ordinary shares, 31,795,884 share options exercisable at
28p; 9,795,884 share options exercisable at 14p and 46,762,000
share options exercisable at 60p.
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 on the basis of comparisons with other
drilling intersections from "World Class" deposits tabulated in
Table 1, some of which have become, or are becoming, producing
mines and on the basis of available independent opinions which may
be referenced to define the term "World Class" (or "Tier 1").
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 (1Singer and Menzie, 2010;
2Schodde, 2006; 3Schodde and Hronsky, 2006; 4Singer, 1995;
5Laznicka, 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 cautions that the Cascabel Project remains an early
exploration stage project at this time. Despite the relatively high
copper and gold grades over long intersections and broad areas, and
widespread surface mineralization discovered at the Cascabel
Project to date, much of which has still not yet been drill tested,
the Company has yet to prepare an initial mineral resource estimate
at the Cascabel Project and any development or mining potential for
the project remains speculative. There is inherent uncertainty
relating to any project at an exploration stage, prior to the
determination of a mineral resource estimate, preliminary economic
assessment, pre-feasibility study and/or feasibility study. There
is no certainty that future results will yield the results seen to
date or that the project will continue to be considered to contain
a "World Class" deposit. Accordingly, past exploration results may
not be predictive of future exploration results.
From the drilling results at the growing Alpala Porphyry Copper
Gold Deposit (only) within the Cascabel Project, the Company
considers the deposit to have significant resource potential and
the data gathered has provided the basis for the estimation of an
exploration target over the area drilled to date. Initial 3D
modelling and grade shell interpolants have outlined an approximate
exploration target at Alpala that ranges from 729Mt at 1.06% copper
equivalent, using a cut-off grade of 0.4% copper equivalent, to
969Mt at 0.92% copper equivalent, using a cut-off grade of 0.3%
copper equivalent. These estimates equate to an endowment of
between 7.7-8.9Mt of contained copper equivalent (Figure A).
Copper equivalent grades used are calculated using a gold
conversion factor of 0.63, determined using a copper price of USD
3.00/pound and a gold price of USD 1300/ounce. Drill hole
intercepts are calculated 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. True
widths of down hole intersections are estimated to be approximately
25-50%.
The Company cautions that the potential quantity and grade
ranges (exploration target) disclosed above for the Alpala Porphyry
Copper Gold Deposit within the Cascabel Project is conceptual in
nature, and there has been insufficient exploration to define a
mineral resource, and the Company is uncertain if further
exploration will result in the exploration target being delineated
within a mineral resource estimate.
On this basis, 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 2.
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 1: Globally significant drilling results for copper and
gold deposits. This table has been reviewed by Mr James Gilbertson
of SRK Exploration Services Ltd., the Company's independent
consultant and "Qualified Person", and does not purport to be
exhaustive.
Figure A: Exploration target over the area drilled to date.
Initial 3D modelling and grade shell interpolants have outlined an
approximate exploration target at Alpala that ranges from 729Mt at
1.06% copper equivalent, using a cut-off grade of 0.4% copper
equivalent, to 969Mt at 0.92% copper equivalent, using a cut-off
grade of 0.3% copper equivalent. These estimates equate to an
endowment of between 7.7-8.9Mt of contained copper equivalent.
Low-tonnage, very high-grade Exploration Targets also exist at
elevated cut-off grades of 0.7% and 1.0% copper equivalent (Lower
Insets).
Table 2: Tier 1 global copper and gold discoveries since 2006.
This table does not purport to be exhaustive exclusive or
definitive.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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