Metals Exploration Regulatory News (MTL)

11 May 2006 07:00

Metals Exploration PLC11 May 2006 METALS EXPLORATION PLC RUNRUNO PROJECT - PRELIMINARY JORC-COMPLIANT INFERRED MINERAL RESOURCE ESTIMATE OF 23 MILLION TONNES AT 2.3G/T GOLD AND 0.07% MOLYBDENUM, CONTAINING 1.7 MILLION OUNCES GOLD AND 34 MILLION POUNDS MOLYBDENUM 11 May 2006 The Board of Metals Exploration PLC ("the Company") is pleased to announce thata preliminary resource estimate has just been completed for the Runruno gold-molybdenum deposit. The results of the Company's first 17 diamond drill holes have been combinedtogether with those for the two drillholes of Greenwater to calculate a JORCcompliant Inferred Mineral Resource totalling an estimated 23 million tonnes atan average grade of 2.3 g/t gold and 0.07% molybdenum for a total contained 1.7million ounces of gold and 34 million pounds (15.4kt) of molybdenum. The resource estimate is classified as an Inferred Mineral Resource as definedby the JORC Code, the Australasian Code for Reporting of Identified MineralResources and Ore Reserves. The Company intends to commence a desk-top study into the economics of theRunruno deposit given that it believes that there is potential to significantlyincrease the resource to more than 3 million ounces of contained gold and 50million pounds of contained molybdenum. RUNRUNO PROJECT Resource Estimate A preliminary resource estimate has just been completed using the assay datacollected from the Company's drilling program (drillholes MXD01-MXD17) and twoof the Greenwater diamond drillholes completed in 2000-01 (RUD-001 & RUD-004). The resource estimate was carried out using the results of Greenwater's bulkdensity measurements which averaged 2.5 tonnes per cubic metre. A lower cut-offgrade of 0.7g/t Au and no upper cut-off grade was applied to the gold assays. Asthe gold analysis is being carried out by screen fire assay technique and thatthere are no extraordinarily high gold assays, it was deemed not necessary toapply an upper cut-off grade to the gold assays. No lower or upper cut-offgrades were applied to the molybdenum assays. The resource estimate is containedwithin a surface area measuring 1,100 metres x 500 metres. Drilling Programme Since November 2005, the Company has drilled 25 diamond drill holes and isawaiting the results for holes MXD018 to MXD025. So far the results have beenobtained from drilling on a 100m x 100-200m grid spacing over a surface area ofapproximately 1000 metres x 700 metres. The mineralised zones still appear to beapproximately 100 metres thick with higher grade zones at the hangingwall andfootwall positions within the zone. This area encompasses the southern-mostportion of the area previously drilled by Fil-Am during the 1970s, upon whichtheir resource calculation of 600,000 ounces gold was based. The Company is currently extending the drilling area northwards through theFil-Am resource area and uphill to the east. Sampling & Analysis Sample Preparation The drill core is taken from the drill site to a secure compound at theCompany's field camp and is logged by the geologist. The drill core is thensplit into two equal halves along its long axis, with one half being sampled atpredetermined intervals, bagged and sent for analysis. The remaining half-coreis retained in core boxes and stored on site for future reference. The bagged half-core samples are being submitted to an independent 'ISO17025accredited' laboratory for sample preparation and analyses for gold andmolybdenum. All of the half-core samples are crushed by the laboratory and a900-1000 gram split is taken, pulverized and presented for analysis. The remaining crushed sample is retained in bags and stored at the laboratoryfor a period of three months before being returned to the Company for storage.These remaining crushed samples will be used in the future for additionalanalyses for gold, molybdenum, silver, sulphur and other elements as deemednecessary, for example, for resource estimation work. Analytical Techniques Gold: Gold analysis is by classical 'Screen Fire Assay' technique that involves sieving a 900-1000 gram sample to 200 mesh (75microns).The entire oversize and duplicate undersize fractions are fire assayed and the weighted average gold grade calculated. This is one of the most appropriate methods for determining gold content if there is a 'coarse gold' component to the mineralisation. Molybdenum: The sample is dissolved in Aqua Regia (3:1 HCl:HNO3) and Molybdenum analysis is carried out by Inductively Coupled Plasma - Optical Emission Spectrometry (ICP-OES) method. Desk-Top Study As part of the Company's strategy to explore and develop the Runruno project,various studies will be commenced, including but not limited to metallurgicaltestwork. Explanation Of Terms Au chemical symbol for goldMo chemical symbol for molybdenumHCl chemical symbol for Hydrochloric AcidHNO3 chemical symbol for Nitric Acidg gramt tonneg/t grams per tonne, which is equivalent to parts per million (g/t Au = grams of gold per tonne)kt thousand tonnes% percent (0.034% Mo = 340 parts per million of molybdenum)lb avoirdupois pound (= 453.59237 grams)oz troy ounce (= 31.103477 grams)micron A unit of length equal to one thousandth of a millimetre or one millionth of a metre.200 mesh the number of openings (200) in one linear inch of screen mesh (200 mesh approximately equals 75 microns)JORC Joint Ore Reserves CommitteeJORC Code The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore ReservesMineral Resource is a concentration or occurrence of material of intrinsic economic interest in or on the Earth's crust in such form, quality and quantity that there are reasonable prospects for eventual economic extractionInferred Mineral Resource is that part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes which may be limited or of uncertain quality and reliability FORWARD LOOKING STATEMENT Given the results of the preliminary resource estimation, the Company believesthat the projected extensions of the mineralised zone, based on the recentcomputer modeling and the generation of a robust geological model, indicatesthat there is significant potential to increase the size of the resource to thenorth and to the east of the currently drilled area. The Company is nowtargeting the definition of a gold-molybdenum resource containing greater than 3million ounces of gold and 50 million pounds of molybdenum. QUALIFIED/COMPETENT PERSONS Gary Powell (a Director of the Company) has been involved in the mining andexploration industry for more than 20 years. He has a Bachelor of AppliedScience degree in geology and is a member of the Australasian Institute ofMining and Metallurgy and the Australasian Institute of Geoscientists. He hascompiled, read and approved the technical disclosure in this regulatoryannouncement. The information in the report to which this statement is attached that relatesto Exploration Results, Mineral Resources or Ore Reserves is based oninformation compiled by Mr Brian Lueck, who is a Member of the Association ofProfessional Engineers and Geoscientists of British Columbia, Canada. Mr BrianLueck is employed as a technical consultant to the Company and has sufficientexperience which is relevant to the style of mineralisation and type of depositunder consideration and to the activity which he is undertaking to qualify as aCompetent Person as defined in the 2004 Edition of the 'Australasian Code forReporting of Exploration Results, Mineral Resources and Ore Reserves' (JORCCode). Mr Brian Lueck consents to the inclusion in the report of the mattersbased on his information in the form and context in which it appears. ENQUIRIES: Steven Smith - Chairman: + 44 (0) 7797 721 858 Jonathan Anderson - Investor Relations: + 44 (0) 7950 410 680 or+63 (0) 917 560 6654Philip Haydn-Slater - WH Ireland Limited: + 44 (0) 2072 201 666 This information is provided by RNS The company news service from the London Stock Exchange