GJV Exploration Update

RNS Number : 7666V

Solomon Gold PLC

08 November 2010

 



                8 November 2010

Solomon Gold Plc

("Solomon Gold" or the "Company")

Exploration Update:

Guadalcanal Joint Venture (GJV) Projects - New targets at Mbetilonga and drilling progressing at Chikora, Solomon Islands

Solomon Gold (AIM Code: SOLG), exploring for gold and copper in Solomon Islands and Australia, is pleased to announce encouraging progress from its Guadalcanal Project, Solomon Islands in joint venture (the "GJV") with Newmont Ventures Limited a wholly owned subsidiary of Newmont Mining Corporation (NYSE:NEM) (Figure 1 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).

KEY POINTS

§ New targets emerging on a 3km long eastern Mbetilonga structural corridor are based on mapping, sampling and geophysical modelling.

§ Drilling continues at Chikora.  The first drill hole CK003 intersected a porphyry with disseminated mineralisation in the copper and gold prospective potassic zone.  Second drill hole CK004 is in progress, drilling in mineralised porphyry within the potassic zone.

§ 88 metres of rock saw channel, 143 soil sample results and 650 metres drill core assays for Chikora are awaited from Newmont for work completed to the end September 2010.

§ 468 soil samples, 67 rock chip samples and 1200m of trench samples were completed at Mbetilonga in September with analytical results still pending from Newmont.

§ Additional work in October at Mbetilonga and Chikora includes 172 soil samples and a further 550 metres drill core from Chikora.

§ 2100 metres of ridge and spur sampling, additional mapping and rock chip sampling and 112 extra soil samples from the Mbetilonga East Corridor area are also planned.

Commenting on the recent reports from the GJV Project, Nicholas Mather, Chief Executive of Solomon Gold plc said: "Solomon Gold is pleased with the progress made by Newmont in the field in Guadalcanal.  Solomon Gold is waiting for a total of 2616 sample results from Newmont (881 from Chikora and 1735 from Mbetilonga) to assist drill targeting."

Mbetilonga

In addition to the progress made in drilling the Chikora Porphyry complex in the Koloula Valley, field work has confirmed the prospectivity of a 3km long structurally controlled zone of the project area known as the Mbetilonga East Corridor.  Previous indications in this area, including the identification, last year, of strong electromagnetic resistors at Vuanimaho and Vuramindi, and an unsampled cluster of magnetic targets at Vuanimaho have now been augmented by Newmont's magnetic modelling, mapping and sampling.  The results are awaited from Newmont for approximately 1735 samples of soils and rock chip data from this program for September and additional work since.  Several drill holes have been planned over the major targets, modelled on the basis of geophysical information, subject to receipt of this assay data.

Chikora, Koloula Valley

In the Koloula Valley, 30 km south east of the Capital Honiara, the GJV's other key area of current work, the drill program commenced in the third quarter.  The GJV has completed the second drill hole CK004 at the Chikora prospect.  Both holes are drilled from the same location in different directions, and both are drilled in low grade mineralised porphyry in the copper prospective potassic zone.  The GJV is targeting the high grade copper gold mineralisation evident in outcrop discoveries at the Levisivisi prospect 2 km to the north east near Vurakara, made in April 2009.  Surface work also continues on the Koloula Project.  Channel sampling is progressing and a soil grid collecting 315 samples over a 1 km² area on the northern end of the Chikora complex, containing the Inamumu and Vurakara prospect areas has commenced.

The IP survey had been delayed due to other commitments by the contracted IP Survey crew but this IP survey work commenced on 18^th October 2010.  The IP survey is expected to outline areas of intense disseminated sulphide mineralisation below surface.

During October 550m of drill core was sampled from Chikora, 172 soil samples from Chikora, 112 soil samples from Mbetilonga and 2100 metres of ridge and spur samples from Mbetilonga for a total of  2934 samples plus additional rock chip samples collected during on-going mapping programs.

Mbetilonga Tenement (PL04/05)(Figures 2 to 6in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com))

The Mbetilonga east area has become a focus for the GJV activities.  The discovery of the Vuanimaho and Vuramindi resistors and strongly mineralised silica rock fragments in the area in 2009 and magnetic features with porphyry signatures drove this focus.  Mapping and sampling had not previously been conducted over much of the area of interest.  Recent work by the GJV has identified a number of prospects aligned along a linear north north east trending structural feature, which Solomon Gold has termed the Mbetilonga East Corridor.  Solomon Gold and its independent consultants believe that this linear structure and those like it which transect Guadalcanal and are visible on the seafloor bathymetric maps of the adjacent waters are deep seated crustal sutures or cracks which are major controls to the emplacement of orebodies in Guadalcanal as are similar lineaments in respect of the location of the Lihir Gold deposit (Newcrest), Bougainville porphyry copper gold deposit (Rio Tinto) and Solomon Gold's 100% owned Fauro Island prospect in the north of Solomon Islands.  Field mapping and sampling is being focussed in the Mbetilonga East Corridor, specifically at the (from north to south Figure 2 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com) Vatunandi, Vuanimaho, Lotu, Vuralosa, Vuramindi, Kichia and Kolokepi Prospects.  Outcrops of copper and magnetite bearing intrusive rocks with porphyry affinities are exposed in the Kolokepi area.  In the Vuanimaho East area a strongly silica cemented explosion breccia containing fragments of silica has been identified.  The breccias believed to have come from a silica cap which formed over the top of a porphyry system and then fragmented due to an explosion after pressure build up from up flow of boiling water above a porphyry and overlying epithermal system in the eastern Vuanimaho area.  The breccia also contains iron oxides and clays typical of an environment prospective for gold mineralisation.  The strong resistor identified at Vuanimaho in the airborne EM survey conducted over the area in 2009 is interpreted to represent an unfragmented silica rich lithocap on the top of a porphyry related boiling water system.  The Vuanimaho and Vuramindi resistors and breccia now located at Vuanimaho east and loose samples collected and assaying up to 4% copper and 9g/t gold in separate samples in the area, give mounting strength to the proposition that the area is host to several porphyry systems and mineralised epithermal systems above them.  Magnetic modelling by Newmont has identified several pipe-like bodies with high magnetic susceptibility which present valid porphyry drill targets.  Newmont has planned three drill holes to test these features, subject to peer review (Figures 3, 5 and 6 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).

During the period Newmont have reported, the main activities at Mbetilonga East Corridor included (Figure 2 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com):

§ Northern end soil grid of 468 samples covering the Vatunandi-Vuanimaho Prospects.

§ 67 Rockchip samples have been collected during grid-line mapping at Vuanimaho and Vatunandi and initial Mapping in Kolokepi area.  Assay results and detailed descriptions are awaited from Newmont.

§ Trenching has been conducted over a total of 1200 metres in 8 trenches from Vatunandi to Vuramindi South.  Variable alteration and mineralisation was encountered and assay results and detailed descriptions are awaited from Newmont.

§ At the Vuanimaho prospect, where pieces of base metal rich vein have been observed, trenching has exposed altered and sulphide mineralised porphyry style intrusive, quartz vein and silicified volcanic boulders.

§ 3D modelling of the magnetic anomalies in the Vuanimaho area has been completed.  Two pipe-like magnetic bodies have been modelled and Solomon Gold considers these to be valid porphyry targets.  (Figure 3 to 6 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).  Newmont has sited, subject to peer review, three drill holes to test these features as indicated in Figures 3, 5 and 6 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com.

Additional grid soil sampling is planned for the Vuramindi South and Lotu areas.  2100 metres of ridge and spur soil sampling is planned in Kolokepi and Vuramindi South to test soil anomalies over 1000ppm copper and the Vuramindi resistor.

Chikora - Levisivisi Prospect (Koloula (PL02/05))

Drilling continues at the Chikora Prospect, part of the Koloula Project.  The first hole, CK003, drilled by Newmont as managers of the GJV was completed at 609m.  The hole intersected weakly mineralised tonalite porphyry with typically less than 1% disseminated and vein related chalcopyrite (a copper sulphide approximately 25% copper).  Mineralisation is associated with intense potassic alteration, particularly in the lower part of the hole (Figure 7 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).  The potassic zones are expected to host the higher grade copper mineralisation.

The second hole, CK004 collared at same location, is drilling towards 005 degrees (true north).  The hole is targeting the interpreted northern margin of the Chikora tonalite porphyry and the best UTAH vertical drillhole intercept which returned 114m at 0.35% Cu to EOH.  At the end of September 2010, the hole had completed 41.7 metres.  It is expected the hole has now reached approximately 600metres depth.

Channel sampling is also continuing at Chikora Prospect.  Soil sampling over a 1km² grid over the northern portion for 315 samples has commenced covering the Inamumu and Vurakara prospect areas (Figure 7 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).  143 samples had been collected to the end of September 2010.  The IP survey has been delayed due to other commitments by the IP survey crew and commenced on 18^th October.  Solomon Gold expects the IP survey to identify zones of strong disseminated sulphide mineralisation which, in the potassic zone of the porphyry environment may be rich in copper mineralisation (Figure 8 in the Appendix to this announcement in the 'Latest News' section on the website, www.solomongold.com).

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 40 Moz 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 USD6 million by 1 April 2012, and a 70% interest by expending a total of USD12m 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 22 km 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 1 Moz.  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 1,500 km² 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 15.91% of its issued share capital following the proposed placing announced on 22 October 2010.

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.

 

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