ECR Minerals Regulatory News (ECR)

27 Jun 2006 07:00

Mercator Gold PLC27 June 2006 27 June 2006 MERCATOR GOLD PLC ("Mercator Gold" or the "Company") Additional Report on Drilling at Bluebird • The Company has completed its successful drill programme at Bluebird. Latest results are now available and include 23m @ 5.5 g/t, 16m @ 2 g/t, 10m @ 2.3 g/t, 9m @ 7.9 g/t, 7m @ 4.9 g/t, 6m @ 4.3 g/t, 5m @ 11.2 g/t, 5m @ 5.6 g/t 4m @ 5.2 g/t, 3m @ 6.9 g/t and 2m @ 29.3 g/t gold. • The Company has received encouraging results from metallurgical testwork carried out on representative samples of the Prohibition ore body. Bluebird Mercator Gold plc is pleased to announce the results from reverse circulationand diamond core drilling at Bluebird. Significant down-hole intersects (>1.0 g/t Au) received since the last media release include but are not limited to: • 23m @ 5.48 g/t Au; 16m @ 1.99 g/t Au; 7m @ 1.67 g/t Au; 4m @ 5.2 g/t Au and in the same hole 3m @ 6.96 g/t Au; 4m @ 3.22 g/t Au; 1m @ 16.34 g/t Au from the Bluebird North lodes. • 9m @ 7.92 g/t Au and the same hole 5m @ 11.26 g/t Au; 7m @ 2.47 g/t Au and in the same hole 3m @ 5.94 g/t Au; 6m @ 2.09 g/t Au and in the same hole 6m @ 2.07 g/t Au; 5m @ 5.65 g/t Au and in the same hole 3m @ 3.85 g/t Au; 5m @ 2.17 g/t Au; 4m @ 4.51 g/t Au; 2m @ 29.32 g/t Au on the central Bluebird lodes. • 6m @ 4.32 g/t Au; 1m @ 4.33 g/t Au on the Polar Star structure, to the south east of Bluebird. • 10m @ 2.36 g/t Au; 7m @ 4.9 g/t Au within the Edin Hope alteration zone, to the south west of Bluebird. Drilling is targeted at increasing the Bluebird resource currently defined as5,280,000 tonnes @ 1.9 g/t Au for 326,000 ounces. The bulk of these ounces iscontained within five high grade domains, 1,698,000 tonnes @ 4.5 g/t Au for244,000 ounces, surrounded by a lower grade alteration halo. Additionalstructures within 500m of Bluebird that are being targeted include Edin Hope(south west of Bluebird), Polar Star (south east of Bluebird), and BluebirdNorth. Of particular significance was the 2m @ 29.32 g/t Au which is about 40m down dipof a previously reported 8m @ 11.1 g/t Au intersection. These results confirmthe extension of high-grade gold mineralisation immediately north of Bluebird,in the gap between the Bluebird and Bluebird North pits. Complete results onmineralised zones are being digitised and a new resource evaluation hascommenced. The resource statement will be a critical element of mineoptimisation and evaluation for profitable and sustainable production. To the south of Bluebird, results include 10m @ 2.36 g/t Au. There is potentialfor this to be part of a previously undetected fault off-set of the Edin Hopezone. Further work will test this theory. Additional drilling will be plannedbased on a re-assessment of all of the southern Bluebird lodes in the positionof the South Junction pit. This work will continue as a priority to determineif any mining potential exists. A metallurgical test hole has been drilled at the northern end of the Bluebirdmineralisation. Additional drill rigs The Company has acquired the use of three additional drill rigs, bringing thetotal on site to five rigs. Diamond core drilling has commenced at Prohibition and Vivian-Consols where thecompany has a programme of 7,000m which follows up the earlier drill results of7m @ 6.5 g/t, 69m @ 3.5 g/t, 46m @ 1.9 g/t and 28m @ 6.9 g/t all in the samehole. Prohibition has a current resource of 2.3Mt @ 3.6 g/t for 270,000oz andthe adjacent Vivian-Consols 0.9Mt @ 7.4 g/t for 234,000oz. RC drilling continues at Prohibition, Vivian-Consols and Surprise. At Surprisethe Company has a programme of 6,000m of drilling comprising mostly RC designedto test the grade on cross-cutting faults with an aim of increasing the grade atSurprise. The third additional rig is capable of conversion between rotary air blast andaircore and has commenced a 5,000m programme at Twelve Mile Well 6km south westof Bluebird. The structural target at Twelve Mile Well is the north extension ofthe fault that hosts gold at Caledonian and Aladdin open pits, where that faultagain passes through banded-iron formation. Drilling results All mineralisation intervals quoted in this press release are "down-hole". Fulldetails of the drilling results are available on the Company's website which iswww.mercatorgold.com Prohibition metallurgy study In early May 2006 a pre-planned diamond drill hole was designed to intersect themineralised ore zones of the Prohibition orebody to provide 300 kilograms of arepresentative sample for metallurgical test-work. Previous reports referred topossible refractory aspects of the sulphide component of the ore horizons. A metallurgical test-work programme and engineering study is currently underwayto evaluate possible processing routes for treating the semi-refractoryProhibition sulphide ore. The work has been split up into two notional stages toenable exploratory work to done on small sub samples in Stage 1, followed byoptimisation work in Stage 2. The results of the Stage 1 work have been completed with the followinghighlights • The ore sample assayed 5.10 g/t Au and contained significant coarse gold values. Deleterious compounds and elements are present in only very low amounts. • Gravity concentration produced 19% gold recovery to a final cleaned concentrate (suitable for direct smelting). • Prohibition ore allows 83% overall gold extraction under standard Carbon In Leach processing methods. • Regrinding the concentrate produced by bulk sulphide gravity concentration to 80% passing 15 microns increases gold extraction to 91%. • Further treatment using alkaline oxidative methods increase gold extraction to 94%. Stage 1 has clearly defined the need to produce a gravity concentrate which isneither capital nor operating cost prohibitive and delivers a 91% gold recovery.The focus on Stage 2 will determine the operating parameters for alkalitreatment of the sulphide concentrate fraction. As this concentrate fraction isrelatively small, capital and operating costs are not considered prohibitive andhave the potential to lift overall recovery to 94%. The Managing Director, Mr P Harford, said: "The Bluebird resource estimate is now underway and the company expects to see asubstantial upgrade in the total number of resource ounces. We are now ready toconsider the economics of an open pit mine at Bluebird." "We are very happy with the metallurgical test-work results received fromProhibition. The suspicion that the ore body may be refractory has been allayed.Bluebird and Prohibition continue to provide encouragement to the Company in itsendeavours to bring both these areas into a profitable mining operation." Consent for release Julian Vearncombe (BSc (Hons), PhD, FGS, RPGeo, FAIG) is a Director of theCompany and consents to the inclusion of the exploration information in the formand context in which it appears here. Julian Vearncombe is a Competent Personfor the reporting of these results as defined by the JORC Code 2004 Edition. TheProhibition metallurgical testing was managed by Mr Denis Geldard (MiningEngineer AWASM) the Company's Operations Director who has over thirty years inmining and metallurgy experience in Australia and internationally and whoconsents to the release of this information in the format presented here. For further information please contact: Mercator Gold plcPatrick Harford Managing Director Tel: +44 (0) 20 7929 1010 Email: info@mercatorgold.comWebsite: www.mercatorgold.com Parkgreen CommunicationsJustine Howarth / Ana Ribeiro Tel: +44 (0) 20 7493 3713 This information is provided by RNS The company news service from the London Stock Exchange