Last checked at 21 Apr 2020 07:51
Chesterfield Resources Plc/ EPIC: CHF/Market: LSE/ Sector: Mining
21 April 2020
Significance of gold in Cyprus VMS exploration
Chesterfield Resources Plc, the mineral exploration company, is pleased to provide an update on the significance of gold in its copper exploration prospects in Cyprus in the light of recent increases in the gold price.
Since Chesterfield first drilled notable gold intersections in Cyprus in late 2018, the gold price has risen by 40%, which has emphasized the importance of finding and developing new gold-rich copper deposits. The company's technical team has just completed an evaluation of its Cypriot exploration licences in terms of their potential for gold. Based on numerous gold encounters in the area, the team has concluded that that the company's Troodos West licenses cover an unusually gold-enriched VMS (volcanogenic massive sulphide) belt, capable of producing a clean gold-rich copper concentrate. As such, gold is likely to be a significant revenue metal contained within copper-zinc sulphide resources.
Highlights
· During the mining boom in Cyprus of the 1960s and 1970s, the price of gold was pegged at just $35 per ounce and so was uneconomic to produce. The mining industry was largely halted by the Turkish invasion of 1974, a period which coincided with the start of a great gold bull run. This eventually saw the value of gold increase by fifty times. Because of lingering about geo-political concerns, Cyprus was not re-visited by explorers in light of its gold potential. As such, Cyprus has not traditionally been associated with gold exploitation in combination with copper.
· During its recent appraisal, the Chesterfield technical team identified significant enrichment of gold, in association with VMS type sulphide occurrences, at five locations over a 4km strike length on a major prospective structure. On the same structure, 7km south-east of this zone, another gold occurrence in association with VMS sulphide has also been identified.
· Significant gold intercepts were also encountered during Chesterfield's diamond drilling campaign of late 2018, including 29.8m at 1.1g/t Au, 27.9m at 0.97g/t Au and 10.5m at 3.8 g/t Au. Percussion drilling earlier this year encountered further gold enrichment in association with buried VMS sulphides at the Hillside target. Rock chip assays revealed significant intersections of zinc-rich VMS sulphides containing >1 g/t Au.
· Cypriot deposits are capable of producing clean, gold-rich copper mineral concentrates that are in increasingly high demand from smelters globally.
· The technical team has determined that gold has the potential to have a large beneficial economic impact from a significant VMS copper-gold discovery in Cyprus. It is noteworthy that gold oxide was briefly mined, on a relatively small scale, in Cyprus just before and during World War II. Even so, in 1938 gold exports were worth the equivalent of $46m at today's valuations.
Martin French, Executive Chairman of Chesterfield commented, "It is noteworthy most of the targeted drilling for copper conducted by Chesterfield to date has encountered gold, often in quantities that have surprised us. Secondly, archival work also highlights multiple gold encounters.
After a strong performance in 2019, gold has jumped another 12 % since the start of this year. While the price of gold is notoriously difficult to predict, it is a reasonable assumption that uncertainty about the ramifications of the Covid-19 pandemic will persist through this year. The price of gold is therefore likely to remain robust. The company has had a number of investor enquiries about the significance of its gold intercepts and potential for copper-gold exploration in Cyprus. After an evaluation exercise, the technical team has concluded Cyprus offers a higher than average gold content when compared to other VMS camps globally, and we therefore expect gold to be a significant contributor in our polymetallic targets.
We are looking forward to resume testing several of these targets with percussion drilling when the easing of Covid-19 restrictions permit. The percussion drilling will allow us to accurately vector our follow-up diamond drilling programme. There is a considerable body of evidence for us to expect gold to be an important component of the programme."
Historical context: Cyprus missed the global boom in gold exploration
Cyprus has not previously been considered as a location for gold mined in association with copper, because its mining boom of the 1960 and 1970s coincided with the period when gold was pegged at a price of just $35 per ounce, and gold was then uneconomic to produce. The Turkish invasion of Cyprus in 1974 effectively halted the industry when, just a few years earlier, the gold peg had been released sparking the great bull run in gold that was to see it value increase by fifty-fold in 40 years. Gold's current price is $1,736 per ounce.
From the mid-1970s onwards the world witnessed a gold exploration boom. At that time, Cyprus was considered geo-politically risky and relatively small scale, while a small number of junior explorers drilled in Cyprus in the noughties, their exploration operations were relatively short-lived for a variety of financial reasons. Consequently, Cyprus VMS copper deposits have not been comprehensively evaluated for their gold potential in the modern era.
Numerous gold encounters at Troodos West
With a greatly improved understanding of VMS deposits, the introduction ofmodern low-level gold analytical techniques and the gold price approaching its historic highs, it has been a timely exercise for the company's technical team to run an appraisal of Cyprus's gold prospectivity.
Within Chesterfield's Troodos West license block over a minimum 4km strike length there are at least five known VMS prospects and deposits from which gold-rich samples have been collected. From north to south these sample points are:
Double 7 prospect: In 2018, Chesterfield diamond drill intercepts of sulphide mineralization 11.1 and 18.9m thick grading 1.29 g/t Au with sample intervals up to 2.99 g/t Au, in association with anomalous zinc and copper values;
Kinousa Underground Mine (historic): A gossan on surface (after VMS sulphides) contains higher gold values (2.57 and 6.48 g/t Au);
Pournaji prospect: An extension of Double 7-KinValley mineralized trend. Several 2019 dump and grab samples collected by Chesterfield returned higher gold values including 2.82 and 5.59 g/t Au in association with anomalous Cu and Zn values
Loana prospect (historic): In 1981, a UN drillhole intercepted 10m of zinc-copper rich sulphides, including 6m grading 3.89 g/t Au;
Hillside prospect: In 2020, Chesterfield percussion drillholes intercepted significant intersections of zinc-rich VMS sulphides containing >1 g/t Au.
2018 diamond drilling by Chesterfield: surprising gold intersections
Additionally, in 2018 Chesterfield drilled the Evloimeni and Mavroyi prospects, also located within the Troodos West license block, where significant gold-bearing sulphide intercepts were encountered near surface at both (see RNS 4 February 2019). These included:
Evloimeni target
o 18EV01 - 27.93 m @ 0.97 g/t Au from 13.20m
o 18EV02 - 29.80 m @ 1.10 g/t Au from 8.75m
· Including. 11.50m @ 1.9g/t Au from 11.30m
Mavroyi target - 7km SE of Hillside on prospective structure
o 18MV05 - 20.20m @ 0.89 g/t Au from 56.00m
o 18MV06 - 3.75m @ 2.28 g/t Au, 17.82 g/t Ag from 90.65m
o 18MV06 - 10.45m @ 3.83 g/t Au, 24.11 g/t Ag from 100.00m
From archive records copper-bearing massive sulphides had been mined from surface at Evloimeni, but the underlying gold-bearing vein sulphide mineralization had been left behind. One consequence of the gold exploration boom has been vastly improved gold assay technology since the 1970s. Before this, labs were unable to accurately measure low-level gold contents. For example, archival records at Evloimeni described as containing only "trace" gold, which Chesterfield has assayed at around 1 g/t.
Since the time of this 2018 drilling, the price of gold has risen by 40%. In light of this, it is clearly important to re-appraise the significance of gold in the company's overall project dynamics. The technical team has evaluated the historic technical information regarding gold in Cyprus, the significance of gold encounters at its West Troodos project and the potential impact of gold on its programme going forward.
The Chesterfield technical team has concluded that gold is likely to be a significant revenue metal contained within future VMS discoveries in Cyprus, and that Cyprus may offer higher than average gold content when compared to other VMS camps globally.
Exploration potential and significance of gold for Chesterfield in Cyprus
The recent escalation in the price of gold has emphasized the importance of finding and developing new gold-rich copper deposits in Cyprus as they are capable of producing clean, gold-rich copper mineral concentrates that are in increasingly high demand from smelters around the world. Much of the present global mine supply of copper concentrates are metallurgically difficult, including the vast quantities of arsenic-rich copper concentrates coming from the mining of many porphyry copper deposits worldwide.
Gold is commonly found in association with weathered VMS sulphides, known as gossans, and also with primary sulphides in one or two parts of a VMS deposit. Gold can be present within the feeder vein zone typically immediately underlying the core of the copper-zinc massive sulphide zone. Here it is most commonly associated with chalcopyrite (and sometimes also magnetite) because both the copper and gold were precipitated from higher temperature hydrothermal fluids. The second common place for gold in VMS deposits is within the upper and outer parts of the massive sulphide zone in association with more concentrated zinc and(or) lead sulphides, as well as other revenue metals including silver, indicating that gold was alternatively transported farther, and precipitated later from cooled, lower temperature hydrothermal fluids.
The most gold-enriched VMS deposits known globally contain their gold within extremely high-grade zones that form part of the massive sulphides; e.g., Eskay Creek mine in Canada produced 3.3 million ounces of gold at a grade of 45 g/t Au in addition to equally impressive silver enrichment. These spectacular "gold dump" zones occur as a result of special local depositional conditions peculiar to a specific deposit and so may or may not be repeated again in a particular geological belt. But it is common for many VMS camps to have at least one deposit that is more gold-rich; for example, the Horne deposit in the Noranda camp of eastern Canada and the Kristineberg deposit in the Skelleftea belt of northern Sweden. However, the widespread presence of gold-enriched VMS sulphide samples from outcrop and drill core/cuttings at several prospects across Chesterfield's Troodos West large project area allows for multiple opportunities for gold-rich VMS discoveries. This gold-enrichment concept is part of Chesterfield's targeting process and is instrumental in prioritizing drill targets.
There is good reason to believe that gold has the potential to become a significant mine revenue provider for Chesterfield in Cyprus. The company's search of archival records reveals that small amounts of gold oxide, relative to other commodities, were reported exported from 1938 to 1944, rising to a peak in 1938 of 28,160 ounces and 127,680 ounces of silver. The annual output in 1938 was still worth a respectable equivalent of US$46 million in today's numbers. Output then declined, probably due to the disruption of World War II.
2020 drilling
In January this year the company used a percussion drill to test two of its targets at Troodos West (see RNS February 3, 2020). A buried VMS deposit was encountered at the Hillside target. Rock chips from zinc-rich VMS sulphides were assayed at >1 g/t Au.
Once restrictions are eased from the Covid-19 lockdown, Chesterfield intends to resume testing the Hillside and other targets nearby with percussion drilling. Results from this will be used to vector a diamond drilling programme.
About Chesterfield Resources Plc
Chesterfield Resources is a copper-gold exploration and development Company active in Cyprus. The Company strategy is to generate value for shareholders by discovering and developing multiple deposits to production. Chesterfield is in the advanced stage exploration in on its Troodos West licence area, and has a large bank of licence areas elsewhere in Cyprus, either granted or under application.
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**
For further information, please visit www.chesterfieldresourcesplc.com or contact:
Chesterfield Resources plc:
Martin French, Executive Chairman Tel: +44(0)7901 552277
Brandon Hill Capital (Broker):
Jonathan Evans/Oliver Stanstead Tel: +44 (0) 203 463 5000
ENDS