BPC.L Regulatory News (BPC)

7 Sep 2006 07:00

Falkland Gold and Minerals Ltd07 September 2006 FALKLAND GOLD AND MINERALS LIMITED ("FGML" or the "Company") Falkland Gold and Minerals Limited (AIM: FGML), the exploration company withexclusive rights to explore for gold and minerals in the Falkland Islands, ispleased to provide the following overview of the operations and an update on thework performed during the Winter season in the Falkland Islands. • The concept of an economically viable gold deposit in the Falkland Islands remains valid; • FGML's strategy, as set out in the Company's admission document dated 24 November 2004 (the "Admission Document"), remains in place; • The British Geological Survey ("BGS") are conducting geochemical and morphology testing on gold particle parcels (minimum 50 gold grains each) collected from the streams draining Area 6 and T11; • The Ground Geophysics programme is being extended to cover targets T11, T25 and some of the Black Shale area. • A site visit by the board of directors of the Company (the "Board") is planned for November 2006 to review the exploration prospects ahead of the scheduled relinquishment of 50% of the Company's licence area in January 2007, further details of which are set out in the Admission Document; • The cash balance stood at over £6 million as at 31 July 2006. Overview of Original Rationale The rationale for gold prospecting in the Falkland Islands derived from thefindings of exploration work performed between 1999 and 2003. This involvedstream sediment sampling, airborne magnetic surveys and ground geochemistry.That work identified several unexplained discoveries of alluvial gold in thestreams to the West of Mount Usborne (known as Area 6) and from the streamsdraining Lafonia in the southern part of East Falkland. As at the date of theAdmission Document, FGML had selected 23 drill targets and set out a programmedesigned to establish the source of the gold. Drilling Programme FGML has two skid mounted diamond core drills in operation and currently has 15operational staff on the Islands. Recent work has concentrated on the contactsbetween softer sedimentary units and the harder tillite in Area 6. This areacontains 11 of the drill targets and the contacts include the Black Shale(stratigraphically above the Tillite) and the Bluff Cove Beds (below theTillite). In total we have drill tested eleven of the original twenty three targets beingT1N, T2N, T5, T6, T7, T8W, T8E, T9N, T10, T12, and T15E. As a result of thiswork four further targets have been identified - T22, T23, T24 and T25 some ofwhich have already been partially drilled. By the end of 31 July 2006, a totalof 16,042 metres of predominantly HQ core had been drilled and 7,093 samples hadbeen sent for assaying. Ground Magnetics The groundwork programme has extended beyond that originally planned at the dateof the Admission Document. Outside contractors were used to conduct 2 majorsurveys. Between March and May 2005, a 1,500 line km survey was performed acrosstargets T2S, T2N, T8E, T9N, T9S-1 to 3, T10, T18 and T20. A second, 1,676 linekm survey was conducted in late 2005 across targets T1, T5, T7, T8W, T12, T15,T23 and T24. Further ground geophysics is planned over three areas with the methods to beused being very low frequency ("VLF") electro-magnetic ("EM"), InducedPolarisation ("IP") and gravity. The surveys will be conducted during theSpring, once the ground has dried out sufficiently. Sampling and Trenching We have been acquiring geochemical data on the soil/clay horizon in four of sixplanned areas being Target 11, Target 9S, Area 6 and the Warrah prospect. We arelooking for a geochemical signature or 'halo' of mineralised zones that arerelated to weathered mineral deposits. We have been assaying for a range ofminerals to identify concentration spikes of pathfinder elements such asarsenic, mercury, silver, antimony, copper and lead. This sampling method wassuccessful in delineating a gold soil anomaly over Target 11 that was confirmedby shallow trenching (nine trenches and over 2,400 trench samples). This is nowbeing followed up with the ground geophysical surveys to delineate a sub-surfacetarget that can be drill tested. Depending on the results of the geophysicalwork, drilling could commence early in the 4th quarter. Outline Findings The exploration work has largely confirmed FGML's prior geologicalinterpretations. More specifically, the findings have: • confirmed the presence of intrusive rocks (dolerite) with associated veining; • shown that where the intrusive rock has intruded less competent rock, such as black shale, veining is more prominent and the shale is mineralised with pyrite; • highlighted that the Fitzroy Tillite is highly competent and restricts veining. The samples taken from the trenching programme have demonstrated higher thanbackground gold values. This has encouraged FGML to begin the ground geophysicswhich should enable the Company to revise the drilling programme. Outlook Taken together, the remaining drilling, sampling and groundwork programmes willtake us well into 2007 and this can be financed from existing resources. TheBoard continues to believe that the potential outlined in the prospectus issuedin November 2004 remains and that the revisions to the work programme will putus in a good position from which to identify the geological model accounting forthe various anomalies. Richard Linnell - Chairman Enquiries: Falkland Gold and Minerals LimitedRichard Linnell (Chairman) +27 82 440 6710 WH Ireland LimitedPeter Jackson / Paul Dudley 020 7220 1666 This information is provided by RNS The company news service from the London Stock Exchange