Last checked at 15 May 2008 11:27
MERCATOR GOLD PLC("Mercator Gold", "Mercator" or the "Company")
AIM: MCR
London 15 May 2008
Exploration Update
Mercator Gold plc, the growing gold producer with operations in the historic Meekatharra Goldfield in Western Australia, is pleased to provide an update on its exploration activities.
Exploration is taking place across a range of prospects to add new reserves and resources and generate additional mining options to the producing operation at Surprise and the planned developments at Bluebird and Prohibition-Vivian-Consols.
Best intersections from Euro prospect include 5m at 6.1g/t Au and 18m at 3.2g/t Au.
Best intersection from drilling at Batavia prospect 8m at 20.2 g/t Au (with 2m at 72.4g/t Au).
Best intersections from Fenian West prospect include 7m at 4.0g/t Au and 19m at 1.7g/t Au.
Exploration Strategy
Mercator's current exploration strategy is focused on providing additional reserves and resources to extend the current mine life of its operations beyond 2012. This mine life is based on 196,000 ounces of mineable open-pit reserves at the Surprise and Bluebird deposits, and the 308,000 ounces of underground reserves delineated to date at Prohibition-Vivian-Consols ("PVC").
To this end, Mercator is looking at a range of green and brown field options which will enable the Company not only to extend the life of its producing operations at Meekatharra, but will also provide additional grade flexibility, if required, in the nearer term.
A major focus of Mercator's exploration effort is on prospects that are relatively shallow with the potential to host new open pit mining operations. Such prospects include Ascot West, Batavia, Chunderloo, Euro, Fenian West, Five Mile Well, Great Northern Highway and Rhens. Of these, Batavia, Euro and Fenian West are considered the highest priority.
The Company is also focusing its efforts on the Paddy's Flat line of lode to provide additional resources and reserves to supplement those already identified at PVC. It is anticipated that the exploration of the Paddy's Flat area will accelerate once the decline, which is currently at the advanced planning stage, has been completed and the underground mining operations have commenced, allowing diamond drilling to take place from underground drill bays.
As well as focusing on known areas of significant mineralisation, investigation of relatively unexplored ground is also taking place. Examples include programmes such as a recently completed gravity survey south of the Euro prospect and a geochemical programme carried out in the north of the Company's tenement package, along strike from the Maid Marion deposit.
Euro Prospect
The Euro prospect lies approximately 6km south-east of the Bluebird processing plant. A 40-hole reverse circulation (RC) drill programme has been completed at Euro, with results from all holes received.
The RC drill programme at Euro was designed to test the prospect above the 100m level, where previous drilling has shown the gold mineralisation to be less continuous and of lower grade than at greater depth.
The results are positive in that they indicate continuity of gold bearing structures above the 100m level and below the surficial 20m blanket of barren alluvial material, albeit at lower grades.
An economic evaluation of the oxide material within this top 100m is underway to determine whether a resource can be estimated, and is expected to be completed within the next four weeks.
Best results of the 2008 RC drill programme at Euro are:
08EURC009 - 12m at 2.9g/t Au from 97m
08EURC012 - 18m at 3.2g/t Au from 99m
08EURC024 - 16m at 2.5g/t Au from 58m
08EURC032 - 5m at 6.1g/t Au from 97m
08EURC034 - 12m at 1.8g/t Au from 46m
08EURC035 - 6m at 3.4g/t Au from 105m
Batavia Prospect
The Batavia prospect is located approximately 6km NNW of the Company's Bluebird processing plant. Historic mining in the area is known to have produced 180 ounces of gold from 276 tonnes of ore, equating to an average grade mined of 20g/t.
Modelling of historic data suggests that Batavia may support renewed mining and a drilling programme is underway to provide further indications of the area's potential.
Mercator has drilled a total of 8 holes to date at Batavia with best intersections of:
08BVRC005 - 8m at 1.6g/t Au from 85m
08BVRC006 - 8m at 20.2 g/t Au from 86m, including 2m at 72.4g/t Au
08BVRC007 - 4m at 4.1g/t Au from 89m, including 1m at 10.g/t Au
08BVRC007 - 9m at 3.3g/t Au from 114m, including 2m at 12.3g/t Au
Fenian West
The results from Q4 2007 drilling at the Fenian West prospect along strike from the Prohibition deposit indicate significant continuity of mineralisation between Fenian West and Prohibition.
There may be scope for Fenian West to be mined along with the upper portions of the Prohibition deposit as an open pit, although further evaluation is required.
Best results from drilling by Mercator at Fenian West to date are:
07FWRC026 - 7m at 4.0g/t from 58m
07FWRC027A - 7m at 3.0 g/t Au from 72m
07FWRC038 - 7m at 3.3 g/t Au from 3m
07FWRC039 - 11m at 2.9g/t Au from 52m
07FWRC040 - 19m at 1.7g/t Au from 54m
07FWRC042 - 17m at 1.6g/t Au from 78m
Paddy's Flat Deeps
An exploration programme to test Paddy's Flat Deeps will be conducted in two phases:
This year, a series of widely spaced holes drilled from surface is intended to provide an indication of structural controls below the extent of existing workings and previous drilling.
2. In 2009, closer spaced drilling from underground in the decline at PVC is planned, with the
primary objective of defining additional reserves and resources in order to increase the life of
the planned underground mining operations.
Euro Gravity Survey
A gravity survey of the ground south of the Euro prospect was completed in March. Several structures similar to the structural controls at the Euro prospect have been interpreted and are planned to be tested with air core drilling in 2008.
This programme has the potential to unearth previously unknown mineralisation in a relatively unexplored area of the Company's tenement package.
Patrick Harford, Managing Director of Mercator Gold plc, comments:
"The exploration component of Mercator's strategy to rejuvenate the Meekatharra Goldfield is continuing to pay off, with the results so far exceeding expectations. It is the view of the Company that the range of exploration targets detailed here offers outstanding potential, and in time we expect to benefit from new options for production as well as to bolster our reserve and resource numbers.
Significant further exploration results will be reported as they become available."
Note:
A more detailed report, including sections and a locality plan, has been posted to the Company's website.
All reported intersections were from RC drilling. Samples were cone split and then fire assayed on a 50 gram charge by an independent laboratory. All drill-hole intervals are measured down hole and include internal dilution where appropriate. Grids shown on sections are local coordinates. Grid shown on plan is MGA coordinates.
Information relating to exploration results has been based on information compiled by Mr Mark Csar, who is a member of the Australian Institute of Mining and Metallurgy and is a full time employee of Mercator Gold. Mr Csar has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code 2004). Mr Csar consents to the inclusion of the information in the form and context in which it appears.
For further information please contact:
Mercator Gold plc
Terry Strapp, Chairman Tel: +61 (0) 412 228 422
Patrick Harford, Managing Director Tel: +44 (0) 20 7929 1010
Email: info@mercatorgold.com
Website: www.mercatorgold.com
Bankside Consultants Ltd Tel: +44 (0) 20 7367 8888
Simon Rothschild
Keith Irons
Oliver Winters
AIM: MCR