Further Update - Clogau Gold Mine, Wales.

RNS Number : 5061X

Stellar Resources PLC

20 November 2014

 



20 November 2014

Stellar Resources plc

("Stellar Resources" or "the Company")

Further Update - Clogau Gold Mine, Wales.

Stellar Resources (AIM: STG) advises that GMOW (Operations) Ltd ("GMOW"), the operator of Stellar Resources gold joint venture in Wales, has advised that it has received significant gold assay results from the latest underground sampling programme conducted on the Tyn n Cornel section of the Clogau St David's Gold Mine ("Clogau").

Highlights:

·     A total of 10 out of 55 assays returned grades of over 200 grams per tonne gold ("g/t Au" or "ppm"), with 6 results returning greater than 300 g/t Au and the highest result returning 435 g/t Au;

·     Average grade of samples from known underground stoping areas graded between 31-125 g/t Au; and

·     Overall average of all samples was 67.3 g/t Au (2.2 ounces/tonne of gold).

Donald Strang, the Company's Chairman commented:

"These are encouraging gold grades from the Clogau Mine and this work clearly demonstrates the potential of the area. Stellar Resources looks forward to reporting the results of the independent geological survey over the Dolgellau Gold Belt and the commissioning of the pilot processing plant over the coming weeks."

Update on recent underground sampling at Clogau Gold Mine, Wales:

Overall, the total sample batch of 55 samples collected from the ground beneath the stopes in the Tyn n Cornel section of the Clogau St David's Gold Mine in north Wales averaged 67.3 grams per tonne gold ("g/t Au" or "ppm Au") (2. 2oz/t), with grades up to 435 g/t Au.

Clogau's gold-bearing lodes are noted for their pockets of high-grade mineralization and historical production concentrated on the pursuit of these high grades zones. Consequently, there has been very little to no work done on material that was previously regarded as waste or where no visible gold was readily apparent.

In order to better evaluate the potential grades from processing larger amounts of remnant material within the mine a "mini-bulk" sampling programme exercise was undertaken during August and September 2014. The areas sampled included the previously grab sampled areas of the Tyn n Cornel level of the Clogau Mine, namely 'the Main Lode ("ML"), Ned Pughes ("NP"), 'Old Chutes ("OS") and the John Hughes ("JH") ore bodies. Sampling was also extended into the 710 drive south of the Clogau's Main Lode system ("TMP") and also into the nominally "waste" areas of the southern extension of the Tyn n Cornel adit ("TR"). The Tyn n Cornel section is the uppermost level of the mine and which provides access across the entire gold bearing mineralisation in the Clogau Mine. The more extensive lower level, the Llechfraith remains un-sampled at this stage.

A total 10 x 25kg samples each were selected from each of the underground stoping areas NP, JH, OS, ML, TMP and a additional 5 x 25kg samples were similarly selected from the development drive area within TR.

These sample lots were individually split and 1kg samples taken from each to provide a total of 55 x 1 kg samples. The remaining sample material has been retained and stored for future batch processing through the Company's sample plant.

The full list of assay results are shown in Table 1.

Table 1: Full Assay Results from Clogau Mine

Sample Description	Au Grade ppm	Sample Description	Au Grade ppm	Sample Description	Au Grade ppm
OS-1 OS-2 OS-3 OS-4 OS-5 OS-6 OS-7 OS-8 OS-9 OS-10	0.45 305 0.44 0.71 2.06 217 0.19 266 1.18 8.04	ML-1 ML-2 ML-3 ML-4 ML-5 ML-6 ML-7 ML-8 ML-9 ML-10	1.56 0.50 388 0.56 0.50 0.45 1.87 0.43 242 2.76	TMP-1 TMP-2 TMP-3 TMP-4 TMP-5 TMP-6 TMP-7 TMP-8 TMP-9 TMP-10	346 435 0.33 3.81 224 0.51 0.30 235 5.12 1.15
Average	80.10g/t	Average	63.9g/t	Average	125.3g/t
JH-1 JH-2 JH-3 JH-4 JH-5 JH-6 JH-7 JH-8 JH-9 JH-10	0.58 1.07 306 0.34 0.37 0.41 1.39 0.71 1.18 0.56	NP-1 NP-2 NP-3 NP-4 NP-5 NP-6 NP-7 NP-8 NP-9 NP-10	284 0.67 0.43 1.63 0.45 0.48 388 1.31 0.68 0.41	TR-1 TR-2 TR-3 TR-4 TR-5	13.5 0.16 8.07 0.13 0.13
Average	31.3g/t	Average	67.8g/t	Average	4.4g/t

Note: These samples consisting of 1kg of rock were split into 500-gram lots and sent for assay at the ALS Minerals laboratory in Loughrea, Co Galway, Ireland. After preparation, the samples underwent ALS's code Au-AA15 analytical procedure. The Au-AA15 methodology is accelerated cyanide leach using LeachWELL™ reagent with an AAS (Atomic Absorption Spectroscopy) finish and is designed to detect gold in the range from 0.01-300 ppm. Where samples exceeded 300 ppm, ME-CON02 was applied.

As can be seen from Table 1 all the samples registered gold values with the results continuing to show the high variability to be expected from this type of material recovered from a high-grade gold mine. Values ranged from 0.13g/t from nominal waste material in the Tyn n Cornel development drive to several values over 300g/t Au from the base of the known stoping areas. The notable high values are easily obtained from the presence of fine particulate gold in samples of this size. Overall, the total sample batch average from each area ranged from 4.4g/t to 125g/t Au. The total average for all 55 samples was 67.3g/t Au (2.2 oz/t).

The next stage of the sampling programme will be determine whether there is correlation between these laboratory assay sample results and the original bulk samples by processing them through the Company's pilot plant. It is envisaged these bulk samples will be processed and the Wilfley table used to determine the percentage of gold recoverable by simple gravity separation. The results of these mini-bulk sample tests will be used to more accurately assess and correlate the underground sampling programmes with actual bulk gold recoveries.

Stellar Resources, through its 49% investment in GMOW (Operations) Ltd, has an exclusive Option Agreement with the Crown Mineral Agents, acting for the Crown Estates, over the exploration license that covers an area of 120km² containing the entire Dolgellau Gold Belt. The licence contains the historic Clogau St David's Gold mine, renowned as being the source of royal gold.

Qualified Person's statement:

Michael G Povey C.Eng M.Sc B.Sc (Hons) (Mining Engineering) ACSM M. Aus IMM, is the General Manager of GMOW (Operations) Ltd and has reviewed and approved the information contained in this announcement. Michael holds a Mining Engineering Degree from the Camborne School of Mines in the UK and is a member of the Australasian Institute of Mining and Metallurgy

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Enquiries:

Stellar Resources plc Donald Strang, Chairman	[phone]
Cairn Financial Advisers LLP James Caithie / Paul Trendell Public Relations: Square 1 Consulting Ltd David Bick/Mark Longson	[phone] [phone]

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