ECR Minerals Regulatory News (ECR)

19 Sep 2007 07:52

Mercator Gold PLC19 September 2007 MERCATOR GOLD PLC ("Mercator Gold" or the "Company") GOLD PRODUCTION TO COMMENCE AT MEEKATHARRA INCREASE IN PROBABLE ORE RESERVES TO 504,000 OUNCES HIGHLIGHTS • Newly commissioned Meekatharra plant currently processingore at up to 150 tonnes per hour (tph). • First commercial gold pour within the next ten days with atarget of 120,000oz of production in the first 12 months of operations. • 17% increase in Probable Ore Reserves to 504,000oz(previously 432,000oz). • Encouraging results from recent drilling at the newlydefined Euro Project with best results including 1m @ 94.3g/t, 3m @ 23.8g/t and10m @ 5.0g/t. • Highly experienced international exploration geologist,Mark Csar, appointed as Exploration Manager. LONDON: 19 September 2007 - Mercator Gold PLC (AIM: MCR) is pleased to announcethat commissioning of the recently refurbished three million tonne per annum(mtpa) treatment plant at its 100%-owned Meekatharra Gold Operations in WesternAustralia is nearing completion, with full commercial production scheduled tocommence within the next ten days. The carbon-in-leach processing facility - located 15km south of Meekatharra,Western Australia - is nearing a throughput level of 150 tonnes per hour (tph)in preparation for a planned first gold pour this week. Mercator expects to produce approximately 120,000 ounces of gold in the first 12months of operations. The majority of initial production will come from theCompany's Surprise Open Pit access ramp, which comprises predominantly low gradeore, whilst higher grades are expected once the open pit reaches the base ofprevious mining. The initial Surprise mining operation is based on a Probable mining reserve of827,000 tonnes at 2.35 grams per tonne (g/t) for 63,000 ounces. After Surprise,production will shift towards the Bluebird Pit, where a much larger reserve of1.7 million tonnes at 2.44 g/t for 133,000 ounces has been identified. Thecombined ore from Surprise and Bluebird is expected to meet the first 18-20months of anticipated production with the focus then turning towards theCompany's underground mines. The underground mines at Meekatharra include the Prohibition, Vivian-Consols andFatts-Mudlode ore bodies, which are part of the Paddy's Flat Mining Centre -which has produced approximately two million ounces of gold to date. Increase in Gold Reserves Mercator is pleased to report a 17% increase in its Probable Ore Reserves to504,000 ounces (from 432,000 ounces previously) following the completion ofpositive metallurgical testwork programs. The increase primarily reflects the conversion of additional Indicated Resourcesto reserves at the Fatts and Mudlode ore bodies. Metallurgical testworkconducted by Perth-based metallurgical testwork company AMMTEC Ltd has confirmedthat suitable gold recoveries can be achieved from both the Fatts and Mudlodeore, with a higher gravity gold component achieved from the Mudlode ore. The Company's Mining Engineering Consultant, Red Rock Engineering, hassuccessfully completed the preliminary mine design and costing evaluation fordevelopment of both the Fatts and Mudlode deposits and has updated thepreviously completed underground mine design for the Vivian-Consols andFatts-Mudlode ore zones. The proposed development of dual access declines willenable mining to proceed both to the north and south over a strike distance ofsome 700 metres, while at the same time improving the ventilation system andproviding a second means of egress. Probable Ore Reserves - Meekatharra Gold Project Tonnes Grade (g/t) OzOpen PitBluebird 1,700,000 2.44g/t 133,000Surprise 827,000 2.35g/t 63,000Sub Total 2,527,000 2.41g/t 196,000UndergroundProhibition 1,372,000 4.06g/t 179,000Vivians / Consols 256,000 10.13g/t 83,000Fatts / Mudlode 362,000 4.00g/t 46,000Sub Total 1,991,000 4.83g/t 308,000Total Probable reserves 504,000 Significant Exploration Results from Euro Project Mercator recently completed a four (4) hole diamond drilling program in an areato the East of known mineralisation which had received little explorationattention in recent years. The Company has named the area Project Euro and ispleased to report that it has received very encouraging exploration results todate including near-surface intersections of 1m @ 94.3g/t, 3m @ 23.8g/t and 10m@ 5.0g/t (see table below for further results.) Table: Main intersections from the diamond holes drilled at Euro 1 Hole ID From To Width (m) AU (ppm)07EURD011 79 80 1 6.307EURD011 89 90 1 1.207EURD011 96 102 6 3.007EURD011 116 126 10 5.007EURD011 130 131 1 1.607EURD011 136 137 1 2.907EURD011 187 188 1 2.007EURD011 190 191 1 1.407EURD011 217 218 1 2.307EURD011 221 227 6 5.107EURD019A 98 99 1 1.207EURD019A 115 116 1 1.107EURD019A 117 121 4 3.107EURD019A 127 128 1 3.307EURD019A 144 148 4 2.307EURD019A 159 160 1 2.707EURD019A 182 183 1 1.407EURD020 38 39 1 8.607EURD020 73 74 1 2.507EURD020 76 77 1 1.107EURD020 82 83 1 2.307EURD020 95 96 1 7.007EURD020 103 106 3 1.707EURD020 110 115 5 3.807EURD020 120 126 6 1.607EURD020 129 131 2 1.307EURD020 133 139 6 2.207EURD020 145 147 2 3.107EURD020 150 152 2 1.807EURD020 155 156 1 8.007EURD020 159 160 1 1.107EURD020 168 171 3 3.207EURD020 176 177 1 1.007EURD020 187 188 1 1.107EURD021 65 70 5 1.707EURD021 79 80 1 94.307EURD021 84 85 1 2.107EURD021 98 100 2 1.307EURD021 102 105 3 23.807EURD021 106 107 1 1.407EURD021 109 110 1 1.507EURD021 127 129 2 2.607EURD021 132 133 1 2.0 While the results to date have resulted in a significant reinterpretation of theorientation of geological structures hosting the mineralisation at Project Euro,it is important to note that the aim of initial drilling was to prove up thestructural formation of the new zone, rather than to provide a detailedassessment of the zone itself. Furthermore, the orientation of the drilling wassuch that depths indicated in the table of results above are not representativeof the actual depth of the intersections themselves due to the drilling angleutilised. Previous drilling was based on an interpretation of typical North-Southstructures, requiring drilling to be oriented in an East-to-West direction orvice versa. The diamond core drilling results received to date suggest that thestructures are in fact oriented in an East-West direction and dip to the south. Remodelling the legacy data with the revised structural controls has identifieda potential ore-bearing zone some 500 metres long, 300 metres wide and 120metres deep. The Company plans to commence a diamond and Reverse Circulation (RC) drillingprogram to delineate a JORC compliant resource at the Euro Project in the shortterm. The delineation of additional reserves in this area, because of itsstrategic location, could have a significant impact on the Company's futureoperational strategies. Appointment of Exploration Manager & Summary With its imminent move into gold production, Mercator is also pleased toannounce the appointment of highly experienced international explorationgeologist, Mr Mark Csar, to the role of Exploration Manager. Mr Csar brings awealth of exploration and geological experience in a range of WesternAustralian-based gold and nickel operations. Prior to his appointment, Mr Csarwas Exploration Manager - USA for the Iluka group. Commenting on Mercator's progress to date, the Company's Chairman, Mr TerryStrapp, said: "The imminent gold pour represented a significant milestone forthe Company as it entered the ranks of Australian gold producers." "This month marks our official transition into production and is a testament tothe hard work and commitment of everyone involved with the Company," Mr Strappsaid. "We are now positioned for an exciting period of growth, building on thestrong production base established at Meekatharra." Mercator's Managing Director, Mr Patrick Harford, said: "We have recentlycompleted the commissioning of the plant and, with the commencement ofcommercial gold production only days away, Mercator is set to join the ranks ofinternational gold producers at an exciting time for the gold sector," he added."In addition to our move into commercial production, the increase in probablereserves announced today and the promising new gold discoveries at the nearbyEuro project highlight the potential for the Company to build on its strongproduction base and significantly expand its gold operations and reserveposition." "I would also like to take this opportunity to welcome Mark Csar to the Company," Mr Harford added. "The appointment of such a highly regarded and skilledexploration manager further cements the Company's position as a significantplayer in Australia's world-class gold mining industry. Competent Persons Report - Consent for release The information in this report is based on information compiled by Alan Colesand Denis Geldard. Alan Coles and Denis Geldard are full time employees of Mercator Gold AustraliaPty Ltd and are Members of the Australasian Institute of Mining and Metallurgy. Alan Coles and Denis Geldard have sufficient experience which is relevant to thestyle of mineralisation and type of deposit under consideration and to theactivity which they are undertaking to qualify as Competent Persons as definedin the 2004 Edition of the "Australasian Code for Reporting of ExplorationResults, Mineral Resources and Ore Reserves". Alan Coles and Denis Geldard consent to the inclusion in the report of thematters based on this 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 422Patrick Harford, Managing Director Tel: +44 (0) 20 7929 1010 Email: info@mercatorgold.comWebsite: www.mercatorgold.com Released by: Bankside Consultants Ltd Tel: +44 (0) 20 7367 8888Simon RothschildKeith IronsOliver Winters AIM: MCR PR in AustraliaRead CorporateNicholas Read /Jason Cunningham Tel: +61 (0)8 9388 1474 Mercator Gold - Background Mercator Gold PLC is a UK gold exploration company listed on the AIM of theLondon Stock Exchange currently making the transition from exploration toproduction via its interest in a 1,932km(2) tenement package in Meekatharra,Western Australia. The Company originally raised £25 million (A$62 million) onAIM to underpin its growth objectives in the gold sector and fast track aproduction/development strategy. The project area is extensively mineralised and Mercator has undertaken anaggressive exploration programme to define the project's resource potential.Mercator acquired the project for just A$18 million and has completed a majorupgrade of the 3mtpa treatment facility and existing mine infrastructure. This information is provided by RNS The company news service from the London Stock Exchange