Chesterfield R. Regulatory News (CHF)

Chesterfield Resources / EPIC: CHF / Market: LSE / Sector: Mining

13 November 2020

Chesterfield Resources Plc

AMT Geophysics survey identifies mineralisation

Chesterfield Resources plc is pleased to announce that it has received preliminary results from its AMT (Audio-magnetotellurics) geophysics survey (announced on 1st September 2020) on its licence areas in Cyprus.

Highlights

· Five AMT geophysics surveys were completed during September and October, covering a total of 2.6 Km2 . Preliminary results have now been assessed.

· The survey correctly identified known deposits, while current diamond drilling has successfully encountered fresh mineralisation in several holes vectored by the AMT.

· The strong results of the programme have led to it being extended from Troodos West to Troodos North. The AMT survey has provided strong indications of potential extensions to a high-grade historic mine at Agrokipia.

Martin French, Executive Chairman said "We are very pleased with the results of the AMT survey programme and as a consequence decided to expand it at both Troodos West and to Troodos North. Not only did the survey identify areas where we knew mineralisation to exist, but it has successfully vectored our diamond drill onto new areas of sulphide mineralisation. It has also provided us with new targets for our next drill campaign planned for the spring, when we also expect to commission further extensive AMT surveys over additional sectors of our licence areas."

A total of five surveys were conducted by a specialist sub-contractor over a total of 2.6 Km2. The survey areas were selected on the basis of comparing the results with known geology, including sulphide mineralisation identified during the percussion drilling campaign, as well as priority areas for the current phase of diamond drilling. The company's technical team had determined that AMT was likely to be the most cost-effective method of identifying massive sulphide targets at our project. The technology has been proven as an effective target definition tool in similar VMS (Volcanogenic Massive Sulphide) belts, including the Iberian Pyrite Belt.

The surveys were conducted throughout September and October and involved taking readings from ground probes at various points (stations) in a grid. The data collected was processed at the contractor's headquarters. The spacing of the stations determines the resolution of the results and some infill lines were run over areas of particular interest for better definition. The AMT survey data was then used by Chesterfield's technical team to compare it with other targeting evidence, such as geological mapping, soil surveys and historic drilling, to provide an enhanced picture of each target area. The AMT data will next be examined by a geophysical consultant to create a 3D model of each target.

The main AMT survey was run in the vicinity of Lysos village with 101 stations monitored. This included the Hillside target where a low resistivity anomaly corresponds to sulphide mineralisation identified by percussion drilling. With good results, the original survey here was extended by a further 148,000 m2 with 29 stations read.

The company ran another survey over part of its Evlim target, over an area of 185,000 m2 with 18 stations read. The results of the interpretation are awaited in order to assess the response of known sulphide mineralisation identified by drilling. Diamond drilling at Evlim has encountered sulphide mineralisation in several locations which has so far correlated with AMT raw data.

An additional survey was run at the company's newly-identified and highly prospective Aspogia licence area over 211,000 m2 and comprising 17 stations. The survey extended into the overlying lavas - an area essentially untested as all historical work had been conducted over formations in the faulted footwall of the prospective lava host rocks. A strong anomaly has been identified that will be evaluated for diamond drilling in future programmes.

Due to the success of the surveys at Troodos West, it was decided to extend the survey programme to a target area at Troodos North, named Agrokipia over 70,000 m with 16 stations read. This area contains an historic high-grade underground mine with reported grades of up to 4% Cu (copper) and 6% Zn (zinc). It is believed that the mine closed down as the miners in the 1970s reportedly found it difficult to separate the zinc from the copper in the flotation circuit. As a consequence, a significant amount of this mineralisation is believed to remain in situ. The AMT survey at Agrokipia provided strong indications that there might be more mineralisation as yet undiscovered and, consequently, Agrokipia has become a new area of strong interest for the company's exploration programme. A thorough data review of Agrokipia is in progress.

The survey results data will now undergo more detailed processing by the contractor and examination by the company's consultant geophysics analyst, Brian Williams. Further information will be announced accordingly.

What is an AMT survey?

Different types of rocks underground conduct electricity at different rates according to their composition. Geologists use geophysics to take of number of readings from the surface (usually in a grid or a line) of electrical resistance which collectively build a picture of geological structures underground, and so help identify the likely position of mineral deposits.

There are different techniques to do this. Previously, Chesterfield conducted an IP (Induced Polarisation) survey which involved placing probes in the ground which were then charged with an electrical current. This "induced" a charge in the rocks beneath which was then measured by sensors from different locations. This IP survey helped locate the mineralisation discovered at our Evlin target.

An AMT survey works the other way around by measuring variations in electrical charges that already exist naturally in the earth's crust. It is a branch of geophysics called magnetotellurics (MT), using what are often referred to as "natural source" surveys.

Audio-magnetotellurics (AMT) is particularly suited to shallower mineral surveys. It is a type of MT survey that measures natural high frequency signals in the audio range (i.e. >1 Hz). These are signals that are generated by lightning strikes that continually hit the earth around the globe. These induce time-varying electric and magnetic fields into the earth's crust and oceans. These currents produce signals which can then be measured over a range of frequencies using probes and magnetic field antennas. Ground resistivity values are then calculated from these AMT measurements, creating a 3D image of the subsurface.

It usually takes just one or two hours to perform each measurement and involves relatively light man-portable sensors. The method is capable of imaging the sub-surface with resolutions good enough to detect features a few meters across.

This is particularly suited to Chesterfield's exploration project in Cyprus. Crucially the company believes the survey will be able to differentiate between sulphide mineralisation and sedimentary rocks (which can prove difficult with other types of electromagnetic survey) and also provide a useful indication of the depth at which mineralised deposits may occur.

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About Chesterfield Resources Plc

Chesterfield Resources is a copper-gold exploration company active in Cyprus, where it holds the largest mineral exploration licence area of any operator on the island.

Cyprus is regarded as a good quality exploration location. It is a member of the EU, and its legal system is based on English common law. There has been minimal exploration activity on the island in the last 46 years since the invasion by Turkey in 1974 put a halt to what had been a very active mining industry.

Since that time, exploration technology and geological knowledge has improved significantly. The company is exploring for VMS (Volcanogenic Massive Sulphide) deposits, which typically occur in stacks and clusters. Historically only those deposits which were visible from surface have been mined. It is believed that many more deposits remain undiscovered buried near surface, and the company is using modern techniques to locate them.

While copper is the main exploration target, it is noteworthy that gold was not historically exploited in Cyprus as its price was pegged to just $35 per ounce when the mining industry was active in the 1960s and 1970s (less than 50 times today's price). Gold has been encountered in several locations in the exploration target area and is an important part of the exploration objective.

The exploration team is led by very senior geologists: Neil O'Brian, formally Head of Exploration, Lundin Mining, Dave Cliff, previously Head of Exploration Europe, Rio Tinto, assisted by Mike Parker, a senior geologist with First Quantum Minerals.

The current focus of exploration is in the Troodos West group of licences belonging to the company, with around 30 defined targets within a five km radius. The objective is to discover several VMS deposits in close proximity to each other to create a mining project with a centralised processing unit. The company has recently been conducting a diamond drill programme on its licence areas.

Chesterfield Resources is committed to world class environmental standards in all of its operations to mine copper, which is essential to developing clean technology projects worldwide. The company hopes to develop industry and opportunities for the benefit of the Republic of Cyprus.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

**ENDS**

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