Fauro Exploration Update

RNS Number : 1690W

Solomon Gold PLC

15 November 2010

 



                15 November 2010

Solomon Gold Plc

("Solomon Gold" or the "Company")

Fauro Island Update:

Further encouraging gold assay results and drill contractor appointed at Fauro, Solomon Islands

Solomon Gold (AIM Code: SOLG), exploring for gold and copper in Solomon Islands and Australia, is pleased to announce further encouraging assay results from the recent surface sampling and the appointment of a drilling contractor for the initial Fauro drilling on its 100% owned Fauro Island Project in the Solomon Islands.

KEY POINTS

·    Geological mapping and trenching continues over the Ballyorlo, Meriguna and Kiovakase Prospects.

·    BLEG and rock sampling continues over the other Fauro Prospects.

·    At Kiovakase Prospect, the highest gold rock chip was 50.2g/t.  The highest soil gold sample was 4.2g/t.

·    At the Meriguna Prospect, the highest gold rock chip was 48.6g/t.  The highest soil gold sample was 3.1g/t.

·    Trench results at Meriguna, BK9; 20m at 4.2g/t gold (incl. 6m at 11.63g/t gold and 2m at 5.04g/t gold).

·    UPD Solomons Limited appointed to commence first phase of 9,000m diamond core drilling on the Fauro Project by mid-December 2010.

·    11km² IP survey over Meriguna, Bataha, Ballyorlo, Kiovakase and Northern Fauro planned.

Commenting on the recent appointment of a drilling contractor for the Fauro Island Project, Nicholas Mather, Solomon Gold Chief Executive, said: "The Company is pleased to announce UPD Solomons Limited ("UPD") has been appoint to commence a 9,000m diamond core drilling program on the Fauro Island Project in the Solomon Islands.  After an extensive selection process, UPD were appointed because of their experience in the Solomon Islands and ability to work in remote locations.

Solomon Gold is keen to commence the drilling program which will initially focus on areas of high grade gold mineralisation within broad gold zones at Meriguna.  The coincidence of gold mineralisation, strong magnetic anomalies over targets approximately 1km² in area is substantiating the validity of large porphyry targets with strong gold mineralised caps on Fauro Island.  After Meriguna, the drill rig will move to Kiovakasa and Ballyorlo which are also anomalous in copper and at Ballyorlo, molybdenum as recently reported.

The Company is currently reviewing suitable contractors to complete a ground geophysical Induced Polarisation survey ("IP Survey") over the key targets on Fauro Island.  One of the major strengths of an IP survey is that the technique is sensitive enough to detect disseminated sulphides and can be used to map porphyry copper and gold bearing sulphides deposits.  The total area to be covered by the IP survey is 11km²over Meriguna, Bataha, Ballyorlo, Kiovakase and Northern Fauro.

The Company is awaiting three-dimensional magnetic interpretations which are expected to confirm the depths and intensity of the magnetic sources for the Fauro magnetic anomalies at Meriguna, Kiovakase and Ballyorlo.

Recent rock chip and trench gold results returned up to 48g/t and 50g/t at Meriguna and Kiovakase respectively and trench results of 20m at 4.2g/t gold at Meriguna, certainly present impressive drill targets." he added.

Fauro Assay Results

Since the last Fauro announcement (23 September 2010) geological mapping and sampling has continued over the Ballyorlo, Meriguna and Kiovakase Prospects.  The 1:10,000 mapping is important in identification of prospect style, structures and mineralisation hotspots.  Ridge and spur soil sampling (Ridge and spur sampling is done for mineral prospecting where samples are taken along the crests of ridges and spurs in an area that is being analysed for minerals.  This type of sampling helps to define the extent of the mineralised area) has also commenced on the Meriguna and Kiovakase Prospects (see Figure 1 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com for the sample lines).  The aim of this work is to assist with the identification of drill targets, along with the data from the airborne electromagnetic and magnetic survey and the ground based exploration program results.

The Company has recently received the results from more ground based sampling at Fauro Island.  A total of 263 samples have been received, 187 from the Meriguna prospect and 76 from Kiovakase.  A total of 167 soil samples, 85 rock sample and 11 trench samples were taken.  Table 1 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com summarises the sample type and sample locations.

At Meriguna, 187 samples have been taken, 143 soils, 33 rock chip and 11 trench.  Thirteen of the rock chip samples were greater than 0.5g/t gold with the highest three samples returning assay results of 4.6g/t, 15.2g/t and 48.6g/t.  Of the 143 soil samples taken, 38 had a grade greater than 0.1g/t gold.  The highest soil gold sample was 3.1g/t.

Trench, BK9 was dug 5m, along the ridge following a series of north-east - south-west trending outcropping veins and returned gold assay results of 20m at 4.2g/t gold (incl. 6m at 11.63g/t gold and 2m at 5.04g/t gold), close to previously dug trenches, BK1^A (8m at 28.0g/t gold) and BK1^B (4m at 3.25g/t gold) (see Figure 2 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).

The Meriguna Prospect has an epithermal gold signature and copper anomalism that indicates a copper porphyry target underneath the gold zone and coincident with the magnetic feature.  The system is over 700m by 1,500m in size.

Seventy-six samples were taken over the Kiovakase Prospect (24 soils and 52 rock chip).  Fifteen of the rock chip samples were greater than 0.5g/t gold with the highest three samples returning assay results of 3.6g/t, 4.1g/t and 50.2g/t.  Of the 24 soil samples taken, nine had a grade greater than 0.1g/t gold.  The highest soil gold sample was 4.2g/t.

The Kiovakase Prospect has an epithermal or high level gold signature, similar to the Lihir Island geology, deposited over the top of a porphyry system which is evident in the magnetic survey.  Based on geophysics (magnetics), the system is now evident over a 700m by 1,500m zone.

Tables 2 and 3 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com summarises the gold and copper rock chip from Kiovakase and Meriguna and Tables 4 and 5 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com summarises the gold and copper soil results from Kiovakase and Meriguna.  Figure 3, 4 and 5 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com details the gold; rock chip, soil and trench samples respectively.

'BLEG' (Bulk Leach Extractable Gold: A geochemical sampling / analysis tool used during gold exploration to accurately measure fine grained gold) and rock sampling continues over the other prospects.

Drilling

The Company has signed a 9,000m diamond core drilling contact with UPD Solomons Limited ("UPD"), subsidiary of Quest Exploration Drilling, based in Honiara, the Capital of Solomon Islands.

UPD has advised the Company that the drill rig currently in Lae, PNG will be loaded onto a ship by mid-November for arrival in Honiara by the end of November.  Following completion of custom formalities, the drill rig will be shipped to Fauro Island and is expected to commence drilling as planned by mid-December.

UPD will be utilising an Atlas Copco CS1000 P4 Drill Rig which is capable of drilling holes between 600m and 650m, dependent on ground conditions.  The diamond core drill holes will initially be PQ (core diameter 85mm) and reducing in size HQ (core diameter 63.5mm) and finally NQ (core diameter 47.6mm) as the hole deepens.

The crew of expatriates and local Solomon Island nationals will be working two 12-hour shifts 7-days a week, with full mechanical and logistical support.

The exploration team are finalising the drilling locations, however the primary focus of this initial program will be the Meriguna, Kiovakase and Ballyorlo Prospects (see Figure 1 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).

IP Survey and Magnetic Modelling

The Company is currently reviewing suitable contractors to complete a ground geophysical Induced Polarisation survey ("IP Survey") over the key porphyry targets on Fauro Island.  An IP survey is a technique of measuring an induced electric charge field in the ground.  The IP survey is used to assist in detection and mapping of economic mineral deposits, in particular those associated with disseminated sulphides and massive sulphide mineralisation.  One of the major strengths of an IP survey is that the technique is sensitive enough to detect disseminated sulphides.  It may therefore be used to map porphyry copper and gold bearing sulphides deposits.

The total area to be covered by the IP survey is 11km²; Meriguna-Bataha (3.2km²), Ballyorlo (3.1km²), Kiovakase (2.2km²) and Northern Fauro (2.3km²).  Figure 6, in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com shows the areas which will be subjected to the IP Survey.

Solomon Gold has commissioned a three-dimensional model of the magnetic source features responsible for the anomalies on Fauro Island and expects this to assist with IP interpretations and detailed drill hole planning.  The results of the models are expected by the end of November.

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 AIM Rules.  Mr Mather 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 Karl Schlobohm                                                                           Tel: [phone]

Solomon Gold Plc (Company Secretary)

[e-mail]

Mr Ewan Leggat                                                                                Tel: [phone]

Fairfax I.S. PLC (Broker)

[e-mail]

Mr Stephen Weir                                                                               Tel: [phone]

RFC Corporate Finance (Nominated Advisor)

[e-mail]

Mr Dominic Barretto                                                             Tel: [phone]

Yellow Jersey PR (PR & IR)

[e-mail]

NOTES TO EDITORS

Solomon Gold Plc's original and core gold exploration projects are located on the Solomon Islands and are the major focus of the Company.  The discovery in September 2010 of extensive and rich gold mineralisation on Fauro Island, just south east of Bouganville Island in neighbouring Papua New Guinea, presents Solomon Gold with potential for a world class gold and copper-gold-molybdenum discovery on the south west Pacific Rim of Fire.  The region is one of the world's most strongly endowed gold and copper provinces, hosting Grasberg, Lihir, Panguna and Ok Tedi, each with in excess of 40Moz gold equivalent metal endowment.  The Company also holds a comprehensive and extensive tenement position on the main island of Guadalcanal, where its JV partner, NVL Solomon Islands Limited (a subsidiary of NYSE-listed Newmont Mining Corporation) can earn a 51% interest in the project by expending US$6million by 1 April 2012, and a 70% interest by expending a total of US$12million by 1 April 2014.  The GJV has outlined high priority gold-copper porphyry targets at Chikora, Mbetilonga and Kuma.

Solomon Gold has also extended its strategy to include becoming an integrated gold explorer, developer and miner with projects in lower risk theatres as well as the Solomon Islands.

Solomon Gold's projects in Queensland include Rannes, Mt Perry and Normanby.  At Rannes, the Company has outlined a 22km long prospective zone in a 200km long trend on the eastern edge of Queensland's Bowen Basin in the same geological setting as Newcrest's 100,000 ounce per year Cracow Gold Mine.  This extensive exploration licence position hosts three mineralised projects at Cooper, Rannes Central and Police Camp.  The exploration area is believed to host mineral systems which are geologically similar to the Carlin trend in Nevada USA.  At Rannes Central, the Company has encountered potentially economic mineralisation in five different prospects targeted to yield at least 1Moz.  A maiden 200,000 ounces has been defined to date at the Crunchie Prospect.

At Mt Perry, the Company is investigating an area of approximately 1,500km² hosting over 50 historic mines and workings near Newcrest's Mt Rawdon Gold Mine.  Mt Perry has yielded potentially economic drill intersections on nine of the ten prospects tested to date.

Solomon Gold's Board includes accomplished professionals with strong track records in the areas of exploration, mine development in Australia and Melanesia, investment, finance and law.  Board and Management have significantly vested interests in the Company holding approximately 16.7% of its issued share capital following the placement announced on 22 October.

Solomon Gold is based in Brisbane, Queensland, Australia.  The Company listed on London's Alternative Investment Market in 2006.  Further details concerning the Company's key projects and personnel can be found at www.solomongold.com.

Table 1: Summary of Prospect and sample type

	Meriguna	Kiovakase	Total
Soils	143	24	167
Rocks	33	52	85
Trench	11		11
Total	187	76	263

Table 2: Gold Rock Chip Assay Results

Prospect	Less 0.5g/t	0.5g/t to 5g/t	Plus 5g/t	Total
Kiovakase	37	14	1	52
Meriguna	20	11	2	33
Total	57	25	3	85

Table 3: Copper Rock Chip Assay Results

Prospect	Less 0.1%	Plus 0.1%	Total
Kiovakase	52		52
Meriguna	32	1	33
Total	84	1	85

Table 4: Gold Soil Assay Results

Prospect	Less 0.1g/t	Plus 0.1g/t	Total
Kiovakase	15	9	24
Meriguna	105	38	143
Total	121	46	167

Table 5: Copper Soil Assay Results

Prospect	Less 0.01%	Plus 0.01%	Total
Kiovakase	12	12	24
Meriguna	56	87	143
Total	68	99	167

 

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