Maiden Resource at Kauffmans-Homestead Prospects

RNS Number : 9471B

Solomon Gold PLC

28 February 2011

 



            28 February 2011

Solomon Gold Plc

("Solomon Gold" or the "Company")

Maiden Resource Estimate at Kauffmans Prospect of 202,998oz, step-out drilling from known gold mineralisation and data gathering to start scoping study.

Solomon Gold (AIM Code: SOLG), active in four drill programs for gold and copper in Solomon Islands and Australia, is pleased to announce a Maiden Resource Estimate at its Kauffmans-Homestead Prospect at Rannes of 203koz of gold and silver, bringing a total Inferred Resource for Rannes to 404koz.  The Kauffmans-Homestead Prospect lies within the Rannes Project, in Central Queensland, Australia and a major asset of its 100% owned subsidiary, Central Minerals Pty Ltd.  Economic intersections have been returned from other Prospects within the Central Rannes Area: Cracklin Rosie and Porcupine Pie, and along with the previously announced Crunchie Resource, a resource of over 2Moz gold is targeted at Rannes.

HIGHLIGHTS

·    Maiden Resource Estimate completed for the Kauffmans-Homestead Prospect over a 500m strike length.

·    Inferred Mineral Resource of 7.7Mt at 0.82g/t gold equivalent for 203koz of contained gold equivalent (0.35g/t gold equivalent cut-off grade).

·    Total Solomon Gold Inferred Mineral Resource, including Crunchie, of 12.3Mt at 1.02g/t gold equivalent, doubled to 404koz based on a 0.35g/t gold equivalent cut-off grade, increased from 0.2g/t.

·    Multiple prospects in close proximity to Kauffmans over a 1.5km strike length, providing excellent potential for a significant expansion of the existing resource inventory.

·    Maiden gold resource calculations for Porcupine Pie and Cracklin Rosie are planned.

·    Drilling campaign in 2011 on targets close to Kauffmans-Homestead, in the Central Rannes Area doubled to 24,000m in order to define 2Moz gold equivalent resources.

·    Gold grade and gold: silver ratio increasing with depth drives deeper exploration below 200 metres.

·    Baseline environmental, metallurgical, crushing and grinding and process design studies to commence.

Commenting on the news, Nicholas Mather, Chief Executive of Solomon Gold plc said: "The Company is pleased to report its Maiden Resource for the Kauffmans-Homestead Prospect at its Rannes Project.  With the upgraded Inferred Resource at Crunchie, the total Inferred Resource for Rannes has doubled and is now 404koz, a total of 12.3Mt at 1.02g/t gold equivalent at a 0.35g/t gold equivalent cut‐off grade, up from a 0.2g/t cut-off previously applied.  The resource is within metres of surface and at Kauffmans is contained with an envelope of 550m long, 130m wide and 150m deep.

The trend of increasing gold grade and gold to silver ratio with depth as evident at Cracklin Rosie, and in the quartz and carbonate veins seen at Kauffmans-Homestead, will drive exploration in deeper drilling below 200m.

The Company plans to undertake further geophysical surveys to identify additional epithermal vein mineralisation at depth which will be drill tested in the near term.

Step-out drilling from known gold mineralised zones, are planned with a view to increasing the resource in the Central Rannes Area. Porcupine Pie, Crackling Rosie and Shilo are the prime new resource targets.

In addition, the Company will start collecting metallurgical, mining, crushing and milling data, along with baseline environmental studies in order to complete scoping and feasibility studies.

Rannes exhibits structures and geochemistry similar to the Carlin trend in Nevada USA, which is one of the most prolific gold producing belts in the world, boasting in excess of 200Moz of combined resources and production to date.  Solomon Gold holds licence area 200km along a prospective zone in Central Queensland.  There are more than 13 targets to follow-up." he added.

The Board is pleased to announce that a Maiden Inferred Resource Estimate has been completed for the Kauffmans-Homestead Prospect, based on the limit of early stage drilling.  The Estimate is 7.7Mt at 0.82g/t gold equivalent for 202,998oz of contained equivalent gold (168,340koz gold and 2.23Moz silver), based on a 0.35g/t gold equivalent cut‐off grade up from 0.2g/t previously used, Table 1 in the Appendix.

Table 2 in the Appendix is the new Inferred Resource Estimate for Crunchie and Table 3 in the Appendix is the total Solomon Gold Inferred Resource Estimate.  Figure 1 in the Appendix shows a three-dimensional image of the Kauffmans-Homestead Prospect resource model.  Figure 2 in the Appendix shows a three-dimensional image of the Crunchie Prospect resource model.

The estimates were compiled by Hellman & Schofield Pty Ltd, an independent geological consultancy, and have been classified as Inferred for reporting under the JORC Code for Reporting of Mineral Resources and Ore Reserves widely accepted as a standard for professional reporting purposes.

Kauffmans is located approximately 150km west of the major central Queensland port city of Gladstone (Figure 3 in the Appendix) and forms part of the Company's broader Rannes Project (Figure 4 in the Appendix).  At the Rannes Project in Central Queensland, Australia, the area is flat and there is poor outcrop, consequently there has not been intense exploration in the past.  The potential of the faulted eastern margin of the southern Bowen Basin has not previously been recognised as a regional target.  The presence of Newcrest's Cracow Gold Mine, 120 km to the south in that setting and the duplication at a higher level at Rannes brings into sharp focus the potential for other systems to be discovered in Solomon Gold's 200km long 100% exploration license areas.

Mineralisation similar in texture and chemistry as well as similar structural settings to that on the Carlin Trend in Nevada, USA has been identified and substantiated in drilling.  The Carlin and Battle Mountain Trends are amongst the most prolific gold producing belts in the world, boasting in excess of 200Moz of combined resources and production to date.  Mineralisation occurs on structural trends which are the focus of the intrusions, faulting and characteristic low temperature mineralisation (see Figure 5 in the Appendix).  Solomon Gold acquired Central Minerals in February 2010 and in doing so consolidated a 200km length of exploration ground prospective for Carlin style gold mineralisation.  The zone lies on the eastern faulted edge of the coal rich Bowen Basin, in an environment favourable for the introduction of mineral bearing granitic intrusions and related volcanic centres.

To date the Kauffmans Prospect extends over a zone of 500m long and the deposit should be amenable to open pit mining subject to feasibility studies.  Linking Kauffmans to the Homestead Prospect in the northwest and Shilo to the south-east, defines a mineralised trend of over 1.5km in strike length.  The consistent improvement in gold grade and gold to silver ratios at depth is a strong driver for deeper drilling.  Solomon Gold, will on this basis drill test several targets for additional resources and higher gold grades.

Magnetic interpretation and soil sample results indicate numerous other targets immediately adjacent to Kauffmans and Crunchie.  These targets have been recently defined by Solomon Gold soil sampling and magnetic surveys, but have not yet been drill tested.  They augment other nearby prospects in the Central Rannes area: Porcupine Pie, Crackling Rosie and Shilo, all of which have yielded economic and encouraging intersections in the past.  The Double Scoop target to the north of Crunchie will be drill tested in the forthcoming drill program.  At each of these locations, high level of arsenic, mercury, thallium and antimony in soil samples coincide with, or are marginally offset from areas of low magnetism, indicating the presence of host rocks which have been demagnetised by hot fluids causing alteration of the rock and deposition of gold and silver.  These locations will be subject to immediate follow-up drilling as soil anomalies are defined.

In addition, surface soil, stream and rock sampling has identified a further thirteen (13) gold targets, of which five (5) are considered to be high order and located close to the drilled prospects.  Police Camp Creek is four kilometres long and defined by strong gold results in soil sampling.  Mt Cooper, located in the northwest of the Rannes project, is seven kilometres long, open ended and defined by strong silver arsenic and thallium anomalies in soil samples.

Solomon Gold is targeting a resource in excess of 2Moz of gold at the Rannes Project.

Forward Program

A revised 24,000m reverse-circulation ("RC") and diamond drilling program has been proposed for the Central Rannes area for 2011, and is aimed at expanding the current resource and testing a number of other advanced Prospects.  A second rig, which has the ability to drill both RC and diamond holes, has commenced work at Central Rannes.

In addition, the Company will start collecting data for the scoping study which will entail base line environmental studies, preparatory to plant and logistic layout and design, drilling of large diameter cores for crushing and milling studies, geotechnical studies for mining studies and open-pit design, metallurgy, process and plant design.

The Company expects additional regular updates in regard to the drilling programs and further resource upgrades due to improving weather conditions going into winter and the availability of additional drill rigs.

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 Bougainville 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 4 March 2012, and may elect to expend a further US$6million (total US$12million) to earn a further 19% to a total 70% by 4 March 2014. 

The Guadalcanal Joint Venture 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 2Moz.  A 404,132oz Inferred Resource has been defined to date at the Crunchie and Kauffmans-Homestead Prospects.

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 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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