Herencia Resources Regulatory News (HER)

Herencia Resources plc

Picachos drill program completed

All results received with continuation of high grades

Maiden Resource for 40M Shaft due shortly

Highlights

The 2014 Drill program, which focused predominately on the 40M Shaft area, has been completed with all assays received from the laboratory.

40M Shaft Drill Highlights

· Latest results show a continuation of high grades and the addition of wide zones of lower grade mineralisation that may be bulk-mined with the higher grade zones.

· The mineralisation remains open in all directions with high grade drill intersections approximately 300 metres along strike to the north, highlighting the potential for mineralisation to extend well over one kilometre.

· The geological model for the 40M Shaft area has revealed significant potential to expand the near surface mineralisation.

· A maiden Resource to be delivered to the Company shortly.

· Feasibility study remains on schedule and within budget.

· Results from final holes include (note "Cu" denotes copper and "Ag" denotes silver):

Hole PP14039 12m at 1.58% Cu (and 13.9g/t Ag) from 136m

Hole PP14048 9m at 2.22% Cu (and 21.9g/t Ag) from 163m

Hole PP14036 27m at 1.15% Cu (and 8.7g/t Ag) from 105m

Hole PP14044 8m at 1.37% Cu (and 11.0g/t Ag) from 104m

5m at 1.85% Cu (and 16.7g/t Ag) from 121m

Hole PP14040 78m at 0.69% Cu (and 5.3g/t Ag) from 119m

Hole PP14042 141m at 0.54% Cu (and 4.9g/t Ag) from 21m

Hole PP14041 53m at 0.68% Cu (and 5.0g/t Ag) from 154m

Hole PP14046 4m at 1.87% Cu (and 11.2g/t Ag) from 32m

7m at 1.46% Cu (and 16.2g/t Ag) from 60m

Hole PP14037 7m at 1.54% Cu (and 13.7g/t Ag) from 74m

8m at 1.39% Cu (and 14.3g/t Ag) from 116m

A summary of significant intersections achieved following completion of the 2014 Stage 2 drilling include (these are in addition to the above):

Hole DD14001 28m at 2.04% Cu (and 18.7g/t Ag) from 142m

Hole DD14002 64m at 1.01% Cu (and 8.8g/t Ag) from 84m

Hole DD14003 117m at 1.14% Cu (and 10.2g/t Ag) from 182m

Hole PP14004 10m at 1.41% Cu (and 9.4g/t Ag) from 65m

Hole PP14011 25m at 1.24% Cu (and 12.1g/t Ag) from 111m

Hole PP14019 91m at 1.42% Cu (and 13.5g/t Ag) from 19m including:

60m at 1.94% Cu (and 16.6g/t Ag) from 39m

Hole PP14020 18m at 1.33% Cu (and 6.1g/t Ag) from 60m

Hole PP14021 18m at 1.00% Cu (and 7.8g/t Ag) from 76m

Hole PP14022 45m at 1.76% Cu (and 13.6g/t Ag) from 95m

Hole PP14027 11m at 1.18% Cu (and 5.9g/t Ag) from 72m

Hole PP14028 20m at 0.89% Cu (and 8.3g/t Ag) from 62m

Hole PP14031 22m at 1.50% Cu (and 14.5g/t Ag) from 74m

18m at 1.59% Cu (and 13.3g/t Ag) from 110m

Hole PP14032 22m at 1.23% Cu (and 9.5g/t Ag) from 138m

Hole PP14033 58m at 1.06% Cu (and 8.0g/t Ag) from 109m

Hole PP14034 40m at 1.18% Cu (and 9.1g/t Ag) from 130m

Hole PP14049 33m at 1.22% Cu (and 11.2g/t Ag) from 69m

Herencia Resources plc (AIM:HER), the Chile-focussed mineral exploration and development Company, is pleased to advise that all laboratory assay results have been received from its Stage 2 drilling program at its advanced Picachos Copper Project ("Picachos" or the "Project") in Chile.

These drill results will form the basis for an updated geological model and maiden Resource for the 40M Shaft area from which a mine plan will be developed to take the Company through to Phase 1 mine production. With current market conditions and commodity prices under pressure, the Company's approach to minimising expenditure whilst moving as quick as possible into production, appears to be paying off. Although only a small area around the 40M Shaft area has been drilled to date, the number of high grade results from the drilling is impressive as evident by the most recent and previously announced drill intersections.

Whilst the Resource estimate will be released shortly, it is evident from the geological model that with minor amounts of additional drilling it is highly likely the upcoming Resource could be expanded significantly. Cash flow from the initial mine production will be used to extend and expand the Resources and mine production.

The mine development methodology of a staged approach to mine development and utilising surrounding infrastructure including existing treatment facilities to toll treat Picachos ore, is a key plank in the Company's low capex, rapid production strategy.

Work to date on the Picachos Feasibility Study is progressing to schedule with a Mineral Resource estimate scheduled for completion in a matter of weeks. Technical input from third party consultants on permitting, environment and other key technical components is underway along with detailed costings from a number of open pit mining contractors.

Managing Director, Graeme Sloan, commented on these new results:

"The 2014 Stage 2 drilling at Picachos has been an outstanding success and has delivered exceptional results for shareholders.

We are now progressing full steam ahead with a number of programs including a maiden Resource for the 40M Shaft area, mine planning, geotechnical evaluation, hydrogeological studies, process metallurgy and project permitting work, all of which will form the basis of the Picachos Phase 1 Feasibility Study.

One of the more significant outcomes of the drill program apart from the drill results themselves, is the very real possibility the 40M Shaft mineralisation could extend for several hundred more metres along strike and still remains open at depth and in all other directions. It also appears that with a limited amount of additional drill metres we could add significantly to the 40M Shaft mineralisation, a real boost for the longer-term.

The 40M Shaft drill program was specifically designed to only cover the first few years of ore mining with the aim of minimising upfront costs to shareholders. The aim being that future drill programs would be funded from cash flow. With this in mind, Stage 2 drilling only covered a small area of our tenement position, yet was able to deliver great results and identify a number of near surface zones that minor amounts of drilling could see a quick addition to our Resource inventory.

The next step for the company, the delivery of a maiden Resource Estimate for the 40M Shaft, development of a mine plan, finalise the metallurgical test work, complete the next steps in the permitting and approval process and look to deliver the preliminary results of the Feasibility Study by the end of 1Q15".

 A table of significant assay results reported by the laboratory is shown in Appendix 1.

About the Picachos Project

The Picachos Project is located approximately 50km south east of the coastal city of La Serena, 8km west of both the existing Andacollo copper-gold project operated by Teck Resources and the mining town of Andacollo (population approximately 10,000 people), and 10km south of the privately owned Tambillos copper mine. The Project is very well positioned for infrastructure with existing high voltage power located approximately 3km east of the Project area and serviced by two all-weather access roads.

Small scale mining is currently being undertaken by private miners via small open pit and underground mining operations. Ore is being trucked to a Chilean government owned processing plant (ENAMI plant) where it is processed. This mining will continue up until such time as the Option to fully acquire Picachos is exercised (at Herencia's discretion) and is seen by the Company as an excellent mechanism to achieve geological and grade data across many zones of mineralisation.

A review of available data and Herencia's own geological and drilling programs have confirmed multiple zones of copper mineralisation with a combined strike length of over 8km contained within the Project area. In some areas the close relationship of these zones coupled with multiple occurrences of out-cropping wide zones of mineralisation, highlights the excellent potential for large scale open pit mining to take place at Picachos. Historic mining has focused mainly around the high grade structures, however in some areas the mantos have been mined up to 50m wide. Mineralisation generally commences from one to five metres below the surface and appears open at depth.

About Herencia

Herencia Resources plc, is an AIM quoted exploration and development company operating in Chile. In addition to the Picachos Copper Project, the Company also has the Guamanga Copper Project and the 70% owned Paguanta Project, a high grade silver-zinc-lead project located in northern Chile. The Company's corporate office is located in Perth and the main technical and management office is located in Santiago, Chile where it has been operating for over eight years.

For further information, please contact:

Graeme Sloan, Herencia Resources plc +61 8 9481 4204

Katy Mitchell, WH Ireland Limited +44 161 832 2174

References in this announcement to exploration results and potential have been approved for release by Mr Graeme Sloan (BAppSc Mining Engineering WASM) and Mr Antonio Valverde (Bsc Geology Universidad Complutense de Madrid), who have more than 20 years relevant experience in the field of activity concerned. Mr Sloan is a Member of the Australasian Institute of Mining and Metallurgy. Mr Sloan and Mr Valverde have consented to the inclusion of the material in the form and context in which it appears.

Further background details on the Company can be found at www.herenciaresources.com

**ENDS** 

Appendix 1 - Laboratory Assay Results (with latest results shaded):

(All widths stated are down-hole intersection)