ECR Minerals Regulatory News (ECR)

18 Jan 2005 16:35

Mercator Gold PLC18 January 2005 Georgian House, 63 Coleman Street, London, EC2R 5BBTel +44-7786 486645 Fax +44-20-76380756 ANNEAN JOINT VENTURE DRILLING INTERCEPTS HIGH-GRADE GOLD AT SURPRISE LONDON - 18 January 2005 - Mercator Gold plc (AIM: MCR) as operator of theAnnean Joint Venture announces that drilling has intersected high-grade goldmineralisation at Surprise, the second of three targets being drilled in theYaloginda region near Meekatharra, Western Australia. Highlights • Hole 04SURCDD012 drilled from surface adjacent to the Surprise openpit intersected 15m grading 45.1 g/t Au from 127m down-hole, approximately 100mvertical depth and 50m below the base of the existing open pit; • Other intercepts of note include Hole 04SURC014 which intersected6m @ 36 g/t Au from 155m down-hole and Hole 04SURCDD013 which intersected 5m @6.3 g/t from 132m down-hole. In addition to the high-grade gold, wide zones oflow-grade mineralisation have been recognised in the host porphyry intrusive atSurprise. • Mineralisation at Surprise is open at depth and will be tested infuture drilling. Gold at Surprise is associated with a conjugate set of veins,one flat and the other steep north-dipping. While the host rocks differ indetail, the structural geology is similar to that of Mt Charlotte at Kalgoorlie. • Mercator management has an exploration target of 2,000,000 ouncesof gold contained within four resources each of at least 500,000 ounces withinthe Annean Joint Venture area. The high-grade Bluebird drilling resultsannounced in December and today's Surprise results means the company is on theway to identifying the first two of these resources. • Management is highly encouraged by the results and, having expendedthe first AUD$1 million (£406,500) on exploration, has decided to proceed toStage 2 of the Joint Venture by spending the next AUD$2 million (£813,000) onexploration before March 2006 to secure a 45% interest in the Meekatharraproperties. Surprise Drilling Surprise is the second of three resource extension targets in the Yaloginda minearea, immediately south of Meekatharra, Western Australia, being drilled byMercator. The company considers that each has the potential to contain in excessof 500,000 ounces of high-grade gold. The targets are within 4km of the StBarbara Mines Ltd ("SBM") Bluebird mill that is currently on care andmaintenance. The drill results are presented in the Table 1 below. The drilling, all fromsurface, shows almost complete gold anomalism within the porphyry host atSurprise, illustrated by the 35m of intercepts in Hole 04SURCDD015. Intercepts of high-grade gold include Hole 04SURCDD012 adjacent to the Surpriseopen pit which returned 15m grading 45.1 g/t Au from 127m down-hole, Hole04SURC014 which intersected 6m @ 36 g/t Au from 155m down-hole and Hole04SURCDD013 which intersected 5m @ 6.3 g/t from 132m down-hole. In addition to the wide high-grade zones, low-grade gold is recognised with thehost porphyry intrusive at Surprise. Hole 04SURCDD013 results are incomplete asdrilling ceased over the Christmas break with the hole still in mineralisation. The Company's current 20,000m drilling programme under the Annean Joint Ventureis on-going, including the completion of hole 04SURCDD013 at Surprise. Table 1: Mercator Gold results for Surprise drilling (all results >1m @ 0.5 g/tAu)---------- ------ ------ ------ ------- ------- -------- ------Hole From To Width Grade Easting Northing RL AMG AMG (m) (m) (m) (g/t Au) ---------- ------ ------ ------- ------- ------- -------- ------04SURC011 108 112 4 0.6 642732 7045356 38504SURC011 152 156 4 0.8 642761 7045346 353 04SURCDD012 127 142 15 45.1 642743 7045310 37204SURCDD012 157 158 1 3.6 642761 7045304 357 04SURCDD013 116 117 1 0.6 642719 7045276 38604SURCDD013 121 127 6 1.6 642724 7045274 38104SURCDD013 132 137 5 6.3 642731 7045272 374 04SURC014 130 131 1 0.7 642718 7045255 36904SURC014 135 140 5 2.0 642722 7045254 36404SURC014 141 145 4 0.8 642726 7045252 36004SURC014 149 154 5 0.9 642732 7045250 35404SURC014 155 161 6 36.0 642736 7045249 34904SURC014 163 165 2 2.3 642740 7045248 34504SURC014 169 175 6 0.9 642745 7045246 339 04SURCDD015 164 166 2 2.1 642698 7045220 32504SURCDD015 170 175 5 0.9 642702 7045218 31904SURCDD015 180 184 4 0.6 642706 7045217 31004SURCDD015 187 189 2 0.9 642709 7045216 30504SURCDD015 192 193 1 0.8 642711 7045215 30104SURCDD015 196 201 5 0.9 642713 7045214 29604SURCDD015 203 206 3 0.5 642716 7045214 29004SURCDD015 207 212 5 0.5 642718 7045213 28604SURCDD015 216 223 7 1.1 642723 7045211 27704SURCDD015 225 226 1 1.5 642725 7045210 272------------ ------ ------ ------- ------- ------- -------- ------ The above table is based on compositing trigger value = 0.5 g/t Au, minimumcomposite length 0.2m, and maximum width of internal waste 2m (except hole04SURCDD012 where there are 3 separate 1m intervals of internal waste).Intercept coordinates represent the x-y-z centroid position of the compositeddrill-hole intercept. Assay method is Genalysis 50g fire assay (FA50/AAS).Surface RL is about 470m, hence intercepts are between 86 and 200m belowsurface. Surprise Geology The geology at Surprise comprises competent host porphyry, within schistose highmagnesium basalts. The porphyry is up to 40m wide, mostly about 20m wide, andthins to the north where it terminates in a boat-like fore keel that plunges 60degrees south. At depth beneath the proven high-grade mineralisation the shapeof the porphyry is not known. Mineralisation is open at depth and will be testedin future drilling. Gold at Surprise is associated with a conjugate set ofveins, one flat and the other steep north-dipping. Whilst the host rocks differin detail, the structural geology is similar to that of Mt Charlotte atKalgoorlie. SpaDiSTM Technology The Surprise target was selected using the SpaDiSTM technology of Vearncombe &Associates Pty Ltd. SpaDiSTM for the first time has identified that high-gradezones within the Yaloginda mine tenements are in zones 010 degrees to 020degrees oblique to the general north-south trend of the geology. Consequently,the northern part of the Surprise porphyry, Bluebird and Jess were selected fortheir obliquity to the regional trend as priority exploration targets. Three-dimensional SpaDiSTM analyses on the historic Surprise data recogniseddetail within the host porphyry not previously known with a subhorizontal togently south dipping zone of high-grade gold associated with flat quartz veins,and predicted a second deeper zone which was tested and confirmed in this drillprogram. For the Surprise data in-put to SpaDiSTM the company conducted internalconsistency validation of the previous SBM digital data for Surprise. Thecompany has an on-going program where the digital data are checked againstoriginal hard copy. Table 2 below is a record of the Surprise drilling resultsof all historic and new intercepts grading greater than 20 gram metres (lengthof intercept multiplied by assay grade). The data shown in Table 2 compriseintercepts that are below the base of the deepest part of the Surprise pit at420mRL. The intercepts are at depths from 50m to 125m below surface. A fulltable of the previous drilling, including grid location is available on requestfrom the Company. Various diagrams and cross-sections will be available at thecompany's website www.mercatorgold.com. Mercator to Proceed to Stage 2 of Annean Joint Venture In its AIM Admission Document prior to listing on 8th October 2004, Mercatormanagement set the Company the exploration target of locating four goldresources within the Annean Joint Venture area, each containing greater thanhalf a million ounces. With the Bluebird and Surprise results to hand,management considers the Company is on the way to identifying two of theseresources. The company is actively exploring at Jess (the third target withinthe Yaloginda mine tenements) and other priority targets within its 1,020 sq kmof tenements, including Maid Marion, Lukes Junction and Tuckanarra. To date, Mercator has expended the minimum AUD$1 million (£406,500) under theterms of the Annean Joint Venture with SBM. Management is highly encouraged by the results to date and as a result hasnotified SBM that it intends to proceed to Stage 2 of the Joint Venture byspending a further AUD$2 million (£813,000) on exploration before March 2006.This will secure the Company a 45% interest in the joint venture. Mercator thenhas the right to increase its interest to 70% by spending a further AUD$5million (£2.03 million) on exploration. The decision to proceed to Stage 2 willresult in the final tranche of 20 million Mercator vendor shares being issuedfor the acquisition of the operating subsidiary Aurogenic Resources Pty Limited. Table 2Previous drilling at Surprise by St Barbara Mines (SBM) and current drilling byMercator (MCR) with down-hole gold intervals returning >20 gram metres (grade *thickness) beneath the 420mRL that is the base of the existing open pit. Hole Year Company Easting Northing RL From To (m) Au g/ Interval Drilled that (AMG) (AMG) (above (m) t (m) drilled sea hole level m) 04SURCDD012 2004 MCR 642743 7045309 372 127 142 45.1 15SU124 1997 SBM 642754 7045327 345 145 159 19.2 14SU83 1997 SBM 642756 7045326 378 108 119 23.7 1104SURC014 2004 MCR 642736 7045248 349 155 161 36.0 6SU82 1997 SBM 642735 7045291 377 110 119 17.7 9SU62 1997 SBM 642708 7045217 414 64 70 16.3 6SU0240 2002 SBM 642768 7045333 395 46 50 16.4 4SU115 1997 SBM 642761 7045282 389 100 103 17.9 3SU72 1997 SBM 642711 7045173 418 48 78 1.3 30SU0195 2002 SBM 642720 7045150 408 71 79 4.0 8SU124 1997 SBM 642770 7045322 375 109 126 1.8 17SU0234 2002 SBM 642777 7045351 408 27 39 2.3 12SU30 1997 SBM 642761 7045369 344 152 154 12.9 2SU82 1997 SBM 642744 7045288 393 94 100 4.3 604SURCDD013 2004 MCR 642731 7045271 373 132 137 6.3 5SU0239 2002 SBM 642784 7045359 414 24 31 3.6 7SU0240 2002 SBM 642758 7045331 377 64 74 2.5 10SU83 1997 SBM 642750 7045328 367 121 132 2.1 11SU83 1997 SBM 642770 7045322 403 82 88 3.6 6SU0240 2002 SBM 642764 7045332 387 55 61 3.6 6SU0242 2002 SBM 642790 7045378 413 26 36 2.1 10----------- ------- ------- ------- -------- ------ ------ ------ ------ ------- The above table is based on composting trigger value = 0.5 g/t Au, minimumcomposite length 0.2m, and maximum width of internal waste 2m (except hole04SURCDD012 where there are 3 separate 1m intervals of internal waste).Intercept coordinates represent the x-y-z centroid position of the compositeddrill-hole intercept. Surface RL is 470m. For more information Mercator Gold plc www.mercatorgold.com ---------------------- Patrick Harford, Managing Director Tel: +44 (0) 7786 486645Terry Strapp, Chairman Tel : +61 (0) 8 9322 7422 Beaumont Cornish LimitedRod Venables / Roland Cornish Tel: +44 (0) 7628 3396 Phillip Securities UK LimitedNick Bealer Tel: +44 (0) 20 7553 8281 Parkgreen CommunicationsJustine Howarth / Ana Ribeiro Tel: +44 (0) 20 7493 3713 Mercator operates a continuous disclosure policy with respect to explorationresults. Company news releases are based on technical information approved bythe Company's Exploration Director, Julian Vearncombe BSc (Hons), PhD, FGS,RPGeo, FAIG. This information is provided by RNS The company news service from the London Stock Exchange