Competent Person's Report on Dolgellau Gold Belt

RNS Number : 8907C

Stellar Resources PLC

01 July 2016

 

Stellar Resources plc

("Stellar Resources" or the "Company")

Competent Person's Report on Dolgellau Gold Belt

Stellar Resources (AIM: STG, ISDX: STG) announces that Gold Mines of Wales (Operations) Limited ("GMOW") commissioned SRK Exploration Services Ltd ("SRK ES") to prepare a Competent Person's Report on their mineral assets comprising an Exclusive Option Agreement ("Option Agreement") issued by the Crown Estates which covers part of the Dolgellau Gold Belt and adjacent exploration targets located in Wales. 

The principal objectives of this report were to review the geology, mineralisation, mining history and exploration history of the area encompassed by the Option Agreement and assess the potential for it to host further gold mineralisation of economic significance, and where this was most likely to be found. SRK ES has also undertaken a review of the land use, ownership and other key stakeholders in the area, and how these factors may influence exploration.

A summary of the key findings of the Competent Person's Report is set out below:

The Dolgellau Gold Belt has a long mining history. From the early 1800s to the late 1990s it has produced about 131,000 ounces of gold, by far the most of any region within the United Kingdom. Gold is principally derived from high grade, narrow veined mesothermal deposits. In turn, most of this gold (81,000 oz) has been exploited from historic Clogau St David's mine that lies within GMOW's Option Agreement. Gold production records are known from 12 mines, but there are over 300 smaller workings and trials in the area.

Despite its high prospectivity, the area is considered to be underexplored and most of it has yet to be subject to sustained modern exploration at a deposit scale. The most recent work outside of individual historic mine sites was a series of Government-funded reconnaissance programmes in the 1970s. Nonetheless, these programmes provided useful data to help identify new exploration targets. Welsh gold bullion is potentially worth a premium to the spot gold price which further enhances the attractiveness of the exploration in this area. This is a key factor in the viability of mining for the type of gold mineralisation found on the gold belt.

Based on the outcomes of this review, and subject to the risks set out below, SRK ES concludes that there is a high potential within GMOW's Option Agreement to find unworked veins containing gold mineralisation of similar style and grade to that known in historic mines in the area. This includes near-mine exploration targets and new regional targets that have seen less mining activity but are still considered to be prospective.

Risks that may hinder or delay the exploration timeline and/or the detailed assessment of exploration target areas are considered to be:

-       Obtaining permission from landowners to access land for exploration.  75% of land within the Option Agreement is owned by farmers, foresters and residents via freehold with the remainder being owned by the Crown Estate or the Welsh Government;

-       Gaining the support of local stakeholders.  Around 50 individual stakeholder groups have been identified;

-       Exploration may be prohibited in sensitive areas such as Sites of Special Scientific Interest, Special Areas of Conservation and areas of cultural significance, of which there are a number in the Option Agreement; and

-       Planning permission and environmental "permitted for" activities such as diamond drilling will need to be obtained, which may be more time-consuming or difficult due to the location within the Snowdonia National Park.

The success of the new exploration will depend on sound geological knowledge and the application of a detailed systematic exploration programme. SRK ES recommends that this should include stream sediment sampling, geological mapping, soil sampling, hand auger drilling and geophysical surveying, and considers the drilling targets could be provided within a 10 month period as a cost of £350,000 - 400,000. Following this, if the necessary planning and environmental permissions can be secured by GMOW, diamond drilling could be undertaken to support the presence of a potential deposit.

Competent Persons statement:

The information in this media release relates to the Competent Persons Report on the Exploration Potential of the Dolgellau Gold Belt, North Wales, United Kingdom.

Mr Chris Barrett (BSc (Hons) MSc CGeol FGS) is a full-time employee of SRK Exploration Services Ltd and reviewer and signatory of the aforementioned report. Mr Barrett is a registered Chartered Geologist (CGeol) with the Geological Society (of London), membership number 1003738. He is a Competent Person as defined by the 2009 London Stock Exchange Alternative Investment Market (AIM) guidelines, having at least 5 years' experience that is relevant to the style of mineralisation and type of deposit under consideration, and to the activity stage. Mr Barrett consents to the inclusion of the information in this media release in the form and context in which it appears.

For further information please contact:

Stellar Resources plc:                                                                                          [phone]

Alastair Clayton

Nominated Adviser:

Cairn Financial Advisers LLP                                                                            [phone]

James Caithie / Sandy Jamieson

Broker:

Optiva Securities Limited                                                                                  [phone]

Christian Dennis / Jeremy King

Public Relations:

Square1 Consulting                                                                                            [phone]

David Bick

 

END

 

 

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