Metals Exploration Regulatory News (MTL)

27 May 2005 12:18

Metals Exploration PLC27 May 2005 FOR IMMEDIATE RELEASE 27 MAY 2005 METALS EXPLORATION PLC RUNRUNO PROJECT - RESULTS OF CHANNEL SAMPLING OF TUNNELSSummaryResults of the majority of samples obtained from extensive channel sampling ofthe tunnelling created by local minersat Runruno have been received andcompiled. Results received so far have returned gold grades which average greater than thereported average grade of the 1980-calculated Runruno resource (1.4 g/t Au).250 channel samples were collected from underground within 30 different tunnellocations averaging 4.7g/t Au. Seven rock-chip and channel samples werecollected at surface from the northern extension of the mineralised zone whichaveraged 2.6g/t Au. The Company anticipates the first diamond drill rig willarrive at the projectwithin the next two weeks. The drilling will target the same area as theprevious 1970s resource drilling of Fil-Am Resources Inc. ("Fil-Am"). Theintention is to upgrade the average grade of the resource by achieving gooddrill core recoveries, in contrast to the poor recoveries achieved by Fil-Am inthe higher-grade zones during the 1970s. Table 1. Runruno Project - partial results of analyses of channel and rock-chipsamples. Sample Number of Representative Tunnel Length Gold MolybdenumLocation Samples (metres) average average g/t Au ppm Mo Balcony 1a 6 30 2.99 134Bit-Ang 1 3 15 1.88 114Bit-Ang 2 12 60 4.10 708Bit-Ang 3 12 60 2.37 553Bit-Ang 4 10 50 1.25 227Bit-Ang 5 9 45 5.33 316Bit-Ang 6 9 45 3.36 619Balcony 1b 4 20 3.30 414Balcony 1c 9 45 11.30 447Balcony 1d 19 95 10.10 1058Balcony 1e 21 105 5.00 naBalcony 1f 9 45 2.58 naBalcony 2 12 60 5.51 naMalilibeg 4 20 5.78 naAMalilibeg 4 20 3.31 naBMalilibeg 19 95 5.70 naCMalilibeg 5 25 2.74 naDMalilibeg 3 15 3.56 naEMalilibeg 4 20 1.87 naFMalilibeg 1 5 5.87 naGMalilibeg 3 15 3.56 naHMalilibeg 4 20 1.87 naIMalilibeg 2 10 6.07 naJMalilibeg 23 115 4.84 naKTayab A 8 40 3.78 naTayab B 13 65 1.28 naTayab C 5 25 5.14 naTayab D 12 60 5.65 naTayab E 5 25 3.36 naKinalabasa 7 surface sampling 2.60 na na = not yet available Channel Sampling Method - high-grade miners' tunnels The side-walls of the local miners' tunnels are channel sampled over 5 metreinterval lengths. Collection of each sample is obtained by chiseling acontinuous channel, approximately 50mm deep, into the side-walls at waist heightover a total length of 5 metres. The sample material is collected and separatelybagged, which is tagged and marked with its own respective sample number. The consecutive channel samples from each tunnel location could be thought of asbeing similar to samples obtained from horizontal drilling, although notnecessarily as representative. The 30 tunnels that have been sampled occur overa 1 kilometre distance within the 2.5 kilometres of the strike length of thesurface mineralization defined so far. Surface Sampling Methods The 7 samples collected from the Kinalabasa area were taken from two separateareas of outcrop, approximately 200 metres apart. They comprise random rock-chipand channel samples of the surface outcrops of the exposed part of the mainRunruno mineralised zone. Results - Gold Analysis of samples for gold content is by conventional fire assay technique ona 50 gram catchweight and AAS finish. The results are encouraging, given that the average grade is greater than the1980 resource grade of 1.4g/t Au. Although the samples were collected in the higher grade parts of the mineralisedzone, that is, near to the hangingwall or footwall contact zones, the grades aregreater than those obtained from the 1970s diamond core drilling of the samezones in the same areas. Local minersare currently working some of these zones and are recovering coarsegold using small rod-mills and sluices. This is also considered to beencouraging as these miners, who are focussed on high-grade recovery,are notnecessarily recovering the fine gold particles and recovered grades of greaterthan 5g/t Au are usually required by them to make a profit.Results - Molybdenum To date only 93 of the 257 samples submitted for molybdenum analysis have beenreceived. The results received so far average 567ppm Mo. The molybdenum to goldratio so far averages 106 to 1. The molybdenum content has the potential to add value to the Runruno deposit.Recent prices have been published at approximately US$35 per pound ofmolybdenum. At the current price of gold (US$420 per ounce), 106ppm Mo equatesto the same value as 0.6g/t Au. Geological Mapping Metals Exploration has previously announced the surface delineation of a 100metre wide, continuous zone of gold+molybdenum+copper+silver mineralisation overa strike length of at least 2,200 metres and down-dip depth of up to 400 metresat Runruno. Recent mapping and sampling has extended the strike length to 2,500metres. This is also encouraging as it increases the potential resource size. The Runruno Deposit - Exploration History Gold was first discovered at Runruno during the early 1960s and itinerant'high-grade' miners have since been selectively mining the higher gold grademineralization within the main mineralised zone. From 1969 to 1974, Fil-Am Resources Inc. completed a total of approximately8,670 metres of diamond drilling in the central part of the mineralised zone,over a strike length of approximately 600 metres, opened 3 adits and developed800 metres of exploratory drives. Results of Fil-Am's channel sampling of theexploratory drives returned significant results ranging up to 11.82 oz/t gold(367 g/t Au) with the main area averaging 2.8 oz/t gold (87 g/t Au) over 40metres by 20 metres. In 1978 and 1979 a feasibility study was completed by two Japanese companies,and a 1980 feasibility report gave an estimated resource, at 0.8 g/t Au cutoff,of 13.4 million tonnes grading 1.4 g/t Au and 3.29 g/t Ag for contained 600,000ounces of gold to a depth of approximately 200 metres below the highest part ofthe deposit. Towards the end of 2000 and early 2001, a subsidiary company of Placer DomeExploration of Canada ('Placer') completed 11 diamond drill holes for a total of2,020 metres. Only two holes were drilled through the mineralised zone withanother two abandoned at the upper contact of the zone. The remaining holestargeted geophysical anomalies elsewhere within the tenement. Best results fromthe two holes which intersected the mineralised zone are 24m @ 1.74 g/t Au from42 metres and 12m @ 2.06 g/t Au from 140 metres in hole RUD-0001, and 10m @ 3.91g/t Au & 246ppm Mo from 4 metres; 8m @ 4.45 g/t Au & 404ppm Mo from 28 metresand 30m @ 2.07 g/t Au & 749ppm Mo from 72 metres. Proposed Exploration The Company is anticipating the first diamond drill rig will arrive at theproject within the next two weeks. The resource area outlined by Fil-Am duringthe 1970s will be re-drilled with the primary objective to achieve better corerecoveries and consequently the Company expects an increase in the average goldgrade. In addition the molybdenum content will be determined as this metal has thepotential to add value to the total value of any future resource estimations.Forward Looking Statement The Company's objectiveis to determine a gold (+molybdenum) resource over a 600metre strike, 100 metres width to a down-dip depth of 400 metres. Given theseparameters, the Directors are setting a resource target for this part of the orebody of 45 to 55 million tonnes. This is a forward looking statementand shouldnot be regarded as anything else and should notbe regarded as a true indicationof the resource until it has been properly explored. Qualified Person Gary Powell has been involved in the mining and exploration industry for morethan 20 years. He has a Bachelor of Applied Science degree in geology, and is amember of the Australasian Institute of Mining and Metallurgy ("AusIMM") and theAustralasian Institute of Geoscientists ("AIG"). He has compiled, read andapproved the technical disclosure in this regulatory announcement. Note: 1ppm of Mo equates to 1g/t Mo For further information please contact:Steven Smith, Chairman: 0044(0)7797721858Jonathan Anderson, Investor Relations: 0044(0)7950410680 www.metalsexploration.com This information is provided by RNS The company news service from the London Stock Exchange