Arc Minerals Regulatory News (ARCM)

Ortac Resources Ltd / Epic: OTC / Market: AIM / Sector: Mining & Exploration

16 August 2012

Ortac Resources Plc ('Ortac' or 'the Company')

Update on Šturec Project PFS and Drilling Results from Eastern Slovakia

Ortac Resources Ltd, the AIM listed exploration and development company focussed on natural resource projects in Europe, is pleased to provide an update on progress at its projects in the Slovak Republic which have a current total JORC resource inventory of 1.36 million ounces ('Moz') of gold equivalent ('Au Eq').

Technical Overview

·; Strong progress with advancement of Pre-Feasibility Study ('PFS') of the Šturec Project which has a current JORC Resource of 1.36 million ounces of Au Eq

·; Šturec Project JORC Resource includes over 1 million ounces in Measured and Indicated categories and is above the open pit economic cut-off grade established in Scoping Study which demonstrated a post tax Net Present Value of US$309 million and an Internal Rate of Return of 36%

·; Excellent scope to conduct the PFS and classify maiden JORC code compliant Ore Reserves at Šturec - PFS anticipated for delivery by the end of Q1 2013

·; Appointment of consultant to conduct baseline environmental studies ahead of production of a Preliminary Environmental Report

·; Appointment of consultant to design the process plant and infrastructure

·; Progress on wider portfolio including assay results from Eastern Slovak licences

o Best results at Zlatá Baňa of 12.5m and 6.35m at a grade of 2.40 and 1.98g/t Au equivalent

o Engaged Snowden Mining Industry Consultants to produce an updated Mineral Resource estimate at Zlatá Baňa

Ortac CEO Vassilios Carellas said, "The technical studies at the Šturec Deposit are reaching a stage of maturity that will enhance the Company's knowledge of the project's fundamentals with respect to the economics as well as the partnerships that can be forged through the responsible development of this resource. This information enables us to enter open dialogue with all stakeholders to ensure that all project proposals respect the investment and development criteria of all concerned.

"With the near term completion of key milestones in the pipeline for Ortac, we remain in a strong position to achieve our strategic objectives, supported by a strong cash treasury of £7.2 million and further cemented by our £20 million equity financing facility".

Šturec Project Update

Following the updated Mineral Resource estimate published in May 2012, Ortac is currently in the process of conducting a PFS of the Šturec Project ('Šturec' or 'the Project'). The latest estimate demonstrates that more than 1Moz of Au Eq resource is classified in the Measured and Indicated categories and is above the open pit economic cut-off grade of 0.44g/t Au established in the January 2012 scoping study. This provides Ortac with excellent scope to conduct the PFS and classify maiden JORC code compliant Ore Reserves at Šturec, a major advancement for both the Project and the Company.

Ortac is aiming to deliver the PFS by the end of Q1 2013 and has engaged several leading industry experts to assist with the completion of the study. Current work programmes commissioned and underway include:

·; Preliminary geotechnical and environmental studies - SRK Consulting Ltd ('SRK');

·; Metallurgical testwork studies - Wardell Armstrong International Ltd ('WAI'); and

·; Process plant and infrastructure design and cost estimation - GBM Minerals Engineering Ltd ('GBM').

In May 2012, two consultants from SRK visited Šturec to assess what work had been carried out in the past and what was still required to complete a PFS. The consultants were also introduced to ENVIGEO s.r.o., a Slovak based environmental consultancy, who have been approved by SRK to undertake baseline environmental studies and to assist in the production of a Preliminary Environmental Report, which is the first step in the permitting application process and will lead into a full Environmental and Social Impact Assessment ('ESIA') of the Project.

In June 2012, the Company shipped a 160kg metallurgical sample to WAI for additional metallurgical studies. The metallurgical sample was made up of material collected from the recent drill programme completed in 2011, as well as material collected from previous exploration drill programmes. The metallurgical testwork studies will consist of deposit characterisation tests including grind calibration, gravity, flotation and leach recoveries, bond index, tailings, settling, detoxification and variability tests.

GBM has recently been appointed to design the process plant and infrastructure. They are expected to visit the Šturec project in the next couple of months to finalise the plant location and design, post the completion of the metallurgical studies.

The Company is in the process of finalising the appointment of the tailings storage facility consultant, who will then also be expected to visit the Project site shortly thereafter.

Astoneco management continues to support Ortac with managing its social and community responsibilities and assistance with engaging the local population, with the aim of ensuring that the surrounding communities are empowered in decisions about how local natural resources are developed and used.

Transparency, through inclusively engaging with stakeholders, is central to this and, in discussions with the citizens of Kremnica, it has been made very clear that this must happen on an on-going basis. Ortac has publicly pledged to this at a press conference in Kremnica on 19 July 2012 and this forms a central part of Ortac's socially responsible investment commitment.

Eastern Slovak Republic

Zlatá Baňa

Ortac has now received the assay results from its 1,200m drilling programme at Zlatá Baňa, which was completed in late 2011. The drill programme was designed to confirm the results of historical drilling at the site as well as to test a number of previously undrilled anomalies.

Drill holes ZBT-2-11, ZBT-3-11, ZBT-4A-11 and ZBT-4B-11 were drilled to confirm the existence of vein style polymetallic mineralisation that is present in historical drill data and three underground adits mined during the 1970's. The results show that the mineralisation is present and that there is potential to locate further economic intersections. The best results were encountered in drill hole ZBT-2-11 with intersections of 12.5m and 6.35m at a grade of 2.40 and 1.98g/t Au equivalent, respectively. Full results are given in Table 1.

Table 1: Zlatá Baňa Drill Results

*Gold Equivalent based on 1 year average metal prices. Gold = $1665/oz, Silver = $33/oz, Zinc = $2008/t, Lead = $2110/t

Ortac has engaged Snowden Mining Industry Consultants ('Snowden') to produce an updated Mineral Resource estimate for the Zlatá Baňa project in accordance with the JORC Code. Snowden visited Slovakia in June 2012 and are currently reviewing the historical data as well the data from the recent confirmatory and exploratory drill programme, following which Snowden will advise the Company on the amenability to convert some or all of the historical Slovak resources into JORC Code compliant mineral resources.

Cejkov

Ortac has also received the results from the Cejkov drill programme completed in late 2011. The Cejkov holes were drilled to confirm the existence of vein style polymetallic mineralisation that is present in historical drill data. The best intersections were in hole VS-19-11 which included 0.3m at 8.63g/t Au equivalent. Full results are given in Table 2.

Table 2: Cejkov Drill Results

*Gold Equivalent based on 1 year average metal prices. Gold = $1665/oz, Silver = $33/oz, Zinc = $2008/t, Lead = $2110/t

Although the drilling intersected some mineralisation at Cejkov, the Company does not plan any further expenditure at this stage and will focus on advancing its Šturec deposit which the Board believes has the best potential to generate value for shareholders.

QA\QC

The reported intervals in the tables above are intersecting the mineralised structures at angles of around 65º. The diamond drill holes were drilled with a combination of PQ (85mm core diameter), HQ (63.5 mm core diameter) and NQ (47.6 mm core diameter) size in order to be able to obtain larger sample volumes from the mineralised zones and to reach the targeted depths.

The holes are started with PQ, which is drilled as deep as the drill can drill or until the ground conditions are such that a reduction to HQ is required to further deepen the hole, which is similarly drilled as deep as the drill can drill or until the ground conditions are such that a reduction to NQ is required to further deepen the hole. All bore holes are down hole surveyed at 30m intervals to determine constant azimuth and dip.

The core is delivered to the core shed where it is photographed with hole numbers and depths clearly visible. The core is then logged with detailed descriptions of sample location, nature of material sampled, representative characteristics of the sample, type of lithology, alteration, structure and mineralisation, if any, recorded from the drill core. Most of the drill core is sawed or split longitudinally with half cores sampled to geological boundaries at approximate one metre intervals.

Sampling of the core is carried out after the core has been logged. Mineralised, altered and silicified sections of the core are sampled separately. The sample is marked in the core box and in the sample interval book. A sample ticket book is used to record each sample interval and to give each sample a unique identifying number. The first part of the sample ticket book is used to record: Hole Name, Depth, From, To and any important features. The second part of the sample interval page is stapled to the box at the start of every sample interval. No ticket is stapled to the box for blank samples. The third part of the sample interval page goes with the core for preparation (drying, crushing and milling/pulverising) and accompanies the sample to the Company's independently approved sample preparation laboratory, which is equipped to treat rock and soil samples.

Assays are conducted through ALS Minerals, Romania, with gold samples being fire assayed with an Atomic Absorption finish. Any samples with grades of over 10g/t Au are fire assayed again and finished by gravity. The silver samples were assayed using conventional ICP-AES analysis and any grades of silver in excess of 100g/t were re-assayed by aqua regia digestion with an AAS finish. Lead and Zinc samples were assayed using conventional ICP-AES analysis. Any grades greater than 10,000ppm were re-assayed using aqua regia digestion followed by an ICP-AES finish.

The technical information in this report is based on information compiled by Mr Owen Mihalop (who takes responsibility for the data and geological interpretation).

Mr Owen Mihalop (MCSM, BSc (Hons), MSc, MIMMM, CEng) is Technical Director for Ortac Resources Limited and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined under the JORC Code (2004). Mr Mihalop consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears. 

**ENDS**