Atalaya Mining Regulatory News (ATYM)

18 Nov 2005 09:23

Eastern Mediterranean Res. Pblc LD18 November 2005 AIM: EMED 18 November 2005 EMED ESTABLISHES GOLD EXPLORATION PORTFOLIO IN THE CAUCASUS To view maps associated with this announcement please click on the followinglink:- http://www.rns-pdf.londonstockexchange.com/rns/3372u_-2005-11-18.pdf Eastern Mediterranean Resources Public Limited ("EMED") announces that it hasexpanded its operations to the Caucasus Region by entering into a set ofagreements with Tamari Limited Liability Company ("Tamari") in Georgia. TheCompany has also been awarded three adjoining licenses in eastern Turkey whichprovides the Company with an initial portfolio of gold properties in theCaucasus Region. EMED will have an 80% stake of its most advanced project the Zopkhito Project inGeorgia, a 50 square kilometre area within a granted mining licence. EMED'spartner Tamari has reported Russian C2 category reserve of 272,000 ounces ofgold and Russian P1 and P2 category resources totalling 1.7 million ounces ofgold. By-product antimony would add significant additional metal production. Resource and reserve exceeds 2 million ounces (Russian system) of gold andgold-equivalent antimony at Zopkhito. These estimates are drawn from the data of27 kilometres of underground development completed in the Soviet era with onlylimited testing for gold. This and other data will be digitized on to EMED'sdatabase over the coming months. EMED has also entered into agreements with Tamari covering three other Georgianproperties: • Tsana Project which was mined during the Soviet era for arsenic only.Tamari has reported Russian C1 and C2 reserves and significant Russian P3resources of gold and; • Lukhra Prospect and Upper Racha Project where Tamari has reportedsignificant Russian P2 resources of gold. Tamari is a company registered in Georgia and is controlled by experiencedGeorgian and English geologists. The commercial arrangements with Tamaricomprise a package of commitments and rights, summarised as follows: • EMED to immediately assume operating responsibility and managementcontrol of the Zopkhito Project along with 80% ownership thereof; • EMED to immediately assume operating responsibility and managementcontrol of the Lukhra Prospect along with 80% ownership thereof; • EMED to retain its 80% interest in the Zopkhito Project and LukhraProspect for exploration expenditure of US$1.0 million. EMED has the right ofwithdrawal at any time but this would dilute EMED's ownership interest should ithave spent less than $US1.0 million ; • EMED to commence exploration at Zopkhito in the next field season(second quarter 2006); • EMED is obligated to finance development at Zopkhito, shoulddevelopment be warranted and Tamari would be subject to normal ownershipdilution provisions; • Tamari grants EMED an exclusive option over 100% of the TsanaGoldfield, exercisable by 30 June 2006 for US$25,000, with the vendors retaininga free 10% profit-share; and • Tamari grants EMED an exclusive option over 100% of the Upper RachaGoldfield, exercisable by 30 June 2006 for US$25,000, with the vendor retaininga free 10% profit-share. Separately, EMED utilised its proprietary database of exploration data in theregion to identify gold prospects in Turkey which fit its regional strategy.Through government tenders of exploration areas, EMED has been awarded threeadjoining licences in eastern Turkey. These licences complement the Georgianprospects and were primarily selected on BLEG stream sediment analyses recordedby previous explorers. EMED's Caucasus start-up team is led by Dr Paul Hanzl (a former Project Managerfor Ivanhoe Mines in Central Asia) and by Professor Alexander Tvalchrelidze (aformer Minister for Environmental Protection and Natural Resources in Georgia). EMED has now established strong positions in three zones on its targetedmineralised belts: • Cyprus exploration areas are centred on the Troodos ophiolite complex.EMED is half way through its drilling program as scheduled for this quarter andis currently drilling at the North Alestos prospect. The targeted mineralisationstyle is volcanic-hosted massive sulphide copper deposits under shallow coverrocks, similar to the larger past Cyprus copper mines - three of which exceeded10 million tonnes of ore at grades of 1% to 4.5%. A separate "Cyprus Update"announcement will be made on Monday 21 November 2005. • Eastern Europe exploration licences and applications are centred on acluster of volcanic centres in Slovakia and Hungary. Low-detection geochemicalmethods are being applied to these areas for the first time. The targetedmineralisation styles are high-grade epithermal gold, or bulk-mineableepithermal gold and porphyry gold/copper. • Caucasus exploration areas form a cluster of gold prospects in andaround Georgia, as detailed in this announcement. The maps in Appendix 1 show EMED's exploration portfolio in May 2005 andNovember 2005. Harry Anagnostaras-Adams, EMED's Managing Director said, "EMED is on schedule and on budget in Cyprus, our first major drilling program,and the Company has now established quality exploration portfolios in threeprospective regions within six months of the IPO. This rapid progress reflectsthe extent of EMED's pre-IPO research and also reflects the effectiveness ofEMED's teams in the many countries in which the Company is now conductingreconnaisance. "EMED has diversified its exploration portfolio into several countries and isnow well-positioned in its area of interest. This affords the Company with avaluable flexibility and mitigates against excessive sovereign risk on anaggregate basis. "It is pleasing that this portfolio-building strategy has been implemented fromwithin EMED's initial capital base. We now have good projects in Cyprus,Slovakia and Georgia. "We are pleased with our overall progress since our IPO only six months ago whenwe raised a net £1.9 million after expenses and we have spent less than onethird of it. The capital base will expand in due course as warranted by theresults of exploration and prevailing financial market conditions. "To mitigate against excessive financial risk on an aggregate basis, any ofEMED's projects can be dropped by the Company at its discretion and withoutpenalty." Overview of Zopkhito Project Zopkhito is located on the southern slope of the Greater Caucasus Mountains inthe Oni Administrative District of the Upper Racha Region, about 170 km fromKutaisi, second largest city in Georgia. Road access is reasonable with sealed roads to within 20 km of the project.Elevations in the project area range from 2,200m to 2,900m above sea level. Theaverage annual temperature in the region is +5degreesC and mining can be carriedout year around. Zopkhito Geological Setting Zopkhito is located in the eastern part of the Mestia-Racha District of theGreat Caucasus Thrust Belt, characterised by a thick sedimentary sequence ofLower Jurassic age overlying granite of Palaeozoic age. The Mestia-Racha District comprises primarily sandstones and shales in aneast-west trending belt approximately 40 km by 8 km. The sediments have beenintruded by a series of diabase, dacite and albite dykes which are spatiallyrelated to mineralisation throughout the belt. Zopkhito Mineralisation Historical exploration at Zopkhito has focused on mineralisation in narrow(average 0.4m wide) quartz-arsenic-antimony-gold veins, dipping at 30 degrees to70 degrees. The larger of these veins have a known strike extent of severalhundred metres and a known vertical extent of over 300m. Veins occur in threeprinciple orientations; NE-SW, N-S and NW-SE, without any orientation favoringgreater gold deposition. The best known and most studied prospect in the Zopkhito area is the KhirkhiProspect, where over 60 individual veins have been identified in an area of 1.0km x 0.7 km. More than 30 of these veins have been explored to a varying extent. Gold is associated with the antimony within the narrow veins and within thealteration zones for some metres peripheral to these veins. The veins containantimonite, arsenopyrite, pyrite, pyrrhotite, sphalerite, galena, scheelite,cinnabar and native gold. Zopkhito Exploration History • Soviet. Extensive investigations were undertaken on the Khirkhiprospect for its antimony potential during the Soviet era between 1929 and 1957.Some 27 km of underground adits were driven on the narrow veins, with associateddetailed underground mapping and sampling. Some 12,000 samples were assayed forantimony as this was the strategic commodity being investigated. Only some 700samples were assayed for gold. The work completed and the records kept areexcellent and are stored in the State Geofund. • Treasury Company. Investigations shifted from antimony to gold in theearly 1990's. Accessible adits were resampled (Veins No. 2, 9 and 11) and 506surface trench samples taken by the Treasury Company Enterprise. This workdetermined that gold occurs in the alteration zones peripheral to thequartz-arsenic-antimony-gold veins. Records of this work exist but EMED has yetto assess the quality of this work. • Sarnia Minerals Joint Venture. A joint venture between Sarnia MineralsLtd and Tamari carried out surface investigations between 1998 and 2000. ACAHowe International Ltd collected 33 samples for multi-element assay anddetermined that the existing maps were reliable and that elevated gold valuesoccur outside the narrow quartz-antimony veins. A further 71 surface sampleswere collected by Sarnia Minerals in 1999. An economic modeling report wascompleted by Tamari in 1999 and a metallurgical report was completed by theGeorgian Mining Institute in 2003. • Phelps Dodge Joint Venture. A joint venture between Sarnia Mineralsand Phelps Dodge focused on trenching and adit sampling at Khirkhi, with limitedinvestigations of some of the surrounding prospects. A total of 148 trench andadit samples were collected at Khirkhi and 34 samples were collected from otherprospects within the field (Kodiani, Kvardzak Chveshura and Notcara Prospects).Assay results are available but have yet to be investigated by EMED. PhelpsDodge withdrew from the joint venture in 2003 and Tamari assumed full ownership. • Tamari. Tamari has compiled a report on the exploration undertaken bythe Phelps Dodge Joint Venture. Tamari reports approximately 100 samples takenaround the portals of adits and of surface alteration. It observed six zoneswith alteration haloes around the narrow quartz-antimony veins. Trenching ofthese zones returned the following best results: • 5.9m at 4.9 g/t gold in clastic and oxidized shale;• 3.7m at 7.3 g/t gold in clastic and oxidized shale;• 5.5m at 5.5 g/t gold in silicified and oxidized shale;• 3.4m at 5.14g/t gold in clastic and sulphidised shale;• 5.0m at 7.6 g/t gold in quartz breccia at dyke contact; and• 4.0m at 8.2 g/t gold in altered siltstone hosting Vein No. 2. Zopkhito Resources and Reserves During the Soviet era, the focus was on antimony with gold being of secondaryimportance. Based on the extensive underground development, the following antimony resourcewas estimated by the Soviets. Russian Classification Tonnes Width (metres) Antimony Grade Antimony TonnesC1 + C2 432,000 0.4 10% 43,200 Based on the work of all of the companies listed above, the following goldresource was estimated by Tamari to a depth of 300m. Russian Vein Tonnes (000's) Width (metres) Gold Gold OuncesClassification GradeC2 2, 9, 11 1,994 4.3 4.2 272,000P1 2, 9, 11 4,295 3.6 2.9 405,000P2 34 Veins 8,800 3.0 4.5 1,270,000 The Russian category C2 reserves and P1 resources have been estimated only forthree of the larger veins (veins 2, 9, and 11) where surface and undergroundsampling since 1990 has established the presence of gold in the alteration haloaround the narrow veins. The P2 resource category is based on the 34 veins.These reserves and resources are metal counts with varying degrees ofreliability, with the C2 reserve category being the most reliable. Zopkhito Exploration Strategy and Approach EMED is primarily interested in the gold-bearing alteration haloes around thenarrow quartz-antimony veins. Sampling to date has established the presence ofat least six zones with the potential for commercial widths and grades of gold.The antimony-rich veins can be expected to provide a material by-product revenuestream. EMED's first priority will be to collect the extensive historical data anddigitise into a modern database. This will enable EMED to verify the historicalresource estimates and plan the exploration program. Geological mapping andsample collection is likely to commence as soon as field conditions permit inspring 2006. At the widths (4.3m) and grades (4.2 g/t gold) quoted in the C2 categoryresource estimate, open-cut mining of the veins and associated halo is adistinct possibility that will be investigated. With the relief (400m) in theZopkhito area, the location of potential ore zones in relation to the topographywill be as important as width, grade and continuity. Overview of Lukhra Prospect , Tsana Goldfield, Upper Racha Goldfield The Lukhra Prospect was first explored in 1942 as a tungsten deposit in 19quartz veins. The focus on gold at Lukhra commenced in 1998 and three zones ofgold mineralisation have been reported associated with the quartz veins and adiorite intrusive. Fourteen of seventeen samples on the main zone had reportedgrades exceeding 5 g/t gold with the highlight being 5 metres at 5.4g/t gold.Tamari has reported significant Russian P2 category gold resources at Lukhra. The Tsana Goldfield is interpreted as skarn/replacement mineralisationassociated with a granodiorite intrusive. An underground arsenic mine operatedfrom 1939 to 1990 at Tsana, following 25 narrow quartz veins, the average gradeof which has been reported as 15% arsenic and 1.3 g/t gold. There is someevidence of stratabound gold mineralisation on the tenement but scant data.Tamari has reported Russian C1 and C2 category gold reserves and significantRussian P3 category gold resources at Tsana. The Upper Racha Goldfield was discovered in the late 1980's, just before thecollapse of the Soviet Union and the consequential collapse of the Georgianmining sector. Stratabound gold mineralisation has been reported within blackslates and sandstone units of Jurassic age. EMED will focus on the potential fora large low-grade target at surface. Tamari has reported significant Russian P2category gold resources at Upper Racha. Background on Georgia Georgia is rapidly emerging from a traumatic period following the collapse ofthe Soviet Union. Of particular importance to EMED is the overhaul during thepast two years of the legal and regulatory systems following the Governmentelections three years ago and the injection of support from variousinternational agencies. In this recent past several major internationalcompanies, mainly from the USA, have entered Georgia but this has yet to occurin the mining sector. EMED is among the first western companies to enter theGeorgian minerals sector in this period. Georgia has a long history in mining and continues mining copper, gold and othermetals on a relatively small scale. Resources in Georgia are mainly manganese,coal, copper, zinc and gold but relatively little exploration has been conductedin the past 15 years. No mine development has occurred since the nation'sindependence in 1991. The mining industry accounted for 10% of the GDP in theSoviet period, but mining now comprises only about 2% of the country's GDP.Employment in mining has decreased to one-fifth of the employment in 1985because the mining industry is in a relatively "suspended" condition. Georgia has a mining code and regulations based on recent World Bank advice.However, some articles in the mining code remain from the Soviet era policy. The Georgian mining industry is managed by the following authorities: • Ministry of Economics, Industry and Trade is responsible for existing mines; • Ministry of Environmental Protection and Natural Resources is responsible for the issue of licenses and ore reserve management and environmental protection; and • State Inspection of Technical Control is responsible for the inspection and management of mines. The former Minister Environmental Protection and Natural Resources is a leaderof EMED's team in the Caucasus and our partner Tamari brings to EMED a localproject support team. Enquiries Eastern Mediterranean Resources Nabarro Wells Parkgreen CommunicationsHarry Anagnostaras-Adams Nigel Atkinson / Justine Howarth / David Nabarro Ana Ribeiro+357 9945 7843 +44 (0) 7710 7400 +44 (0)20 7493 3713www.emed-resources.com References in this announcement to exploration results and potential have beenapproved for release by Mr Ron Cunneen, an employee of the Company, who has morethan 5 years relevant experience in the field of activity concerned and hasconsented to the inclusion of the material in the form and context in which itappears. The Georgian projects acquired by EMED have typically had significant amounts ofwork carried out on them. In the case of Zophkito it would have cost theequivalent of millions of dollars. The data from this work is generally reliableand is certainly valuable but it has been reported under the Russian system forreporting resources and reserves, which is totally different to the most commonwestern standard known as the JORC Code. The Russian system is a rigorousprescriptive system for classifying mineralisation into categories A, B, C andP, reflecting estimated metal content (without reference to economic factors)and reflecting descending degrees of confidence. The "C" category is for "reserves" and the "P" category is for "prognostic resources." In reporting to its shareholders, EMED has followed the main principles of theJORC Code ...Transparency, Materiality and Competence. EMED's reporting of anyRussian resource and reserves does not imply that these comply with the JORCCode or that they have been verified. That will be one of the objectives offuture exploration programs. Where there has not been the opportunity for EMEDto conduct reasonable due diligence to form a preliminary view that the Russiansystem of reporting has been complied with, the Russian resources and reserveshave not been reported by EMED. This information is provided by RNS The company news service from the London Stock Exchange