Ovoca Bio Regulatory News (OVB)

13 Sep 2007 07:01

Ovoca Gold PLC13 September 2007 Ovoca Gold plc Operational Update Ovoca Gold Plc, the London AIM (OVG.L) and IEX (OVX.IR) ("Ovoca") is pleased toannounce that it has decided to acquire the 26% it does not already own of theshares of CJSC Prospectors Artel Ayax ("Ayax"), after having received a detailedstatement from the Federal Inspectorate "Rosprirodnadzor" on 28 April statingthat Ayax has fulfilled its obligations, and is in compliance, with regard tothe Goltsovoye mining licence. The consideration for this acquisition, as perthe terms laid out in the 7 June 2006 Option Agreement, is the issuance of43,007,250 new shares in Ovoca Gold Plc. Application will be made to the LondonStock Exchange and Irish Stock Exchange for these shares to be admitted totrading on the AIM and IEX markets respectively. In addition, Ovoca is pleased to announce that it has secured a short term lineof credit for US$5 million to be used for road and camp construction atGoltsovoye. The loan is repayable on 31 March 2008. Additional financing isbeing discussed, which if secured, will be used to accelerate the site works toreduce the construction time. The BFS is still on schedule for completion beforethe end of this year. Update on the Goltsovoye Project. Scott Wilson Mining (SWM) have completed the review of the JORC classifiedreserves and confirmed the previous reserve statement from Wardell ArmstrongInternational (WAI). Goltsovoye is being designed as an underground operationat a rate of 260,000 tonnes a year of ore. Detailed mining and developmentschedules are underway with an emphasis on a pre-production schedule to enablean early mining contract to be placed. SWM have a detailed physical model of theorebody and recommend a mechanised operation with some manual mining techniquesin narrow orebodies. GBM Minerals Engineering (GBM) are the main plant designers. The Magadaninstitute GOT has been awarded a contract to adapt the design to meet Russianconstruction standards. Metallurgical testwork by Tsnigri and WAI is completeand an agreed process plant flowsheet, which recovers 93% of the silver, hasbeen designed by GBM to produce flotation and gravity concentrates without theuse of a cyanide circuit. Process plant equipment specifications have now beendeveloped and general arrangement drawings have been completed. Various tailings disposal options have been studied and the optimum system ofthickened wet tailings, stored in a lined dam facility, have been selected.Geotechnical drilling is ongoing to confirm the suitability of the selectedsite. The location of all infrastructure has been finalised and designscompleted. Site selection geotechnical drilling is ongoing. The Environmental Impact Study by WAI is progressing and as soon as all keyproject parameters are finalised in detail Public Meetings will be held inMagadan and Omsukchan. Meeting have been held between Ayax Directors and theGovernor, Mr. L.M. Shadrin, of the Omsukchan region and written support andencouragement for the speedy implementation of the project has been receivedfrom his office. A project implementation schedule and details of planned staffing, sources oflabour and contractors are complete in first draft. When construction commencesit will utilise local and regional fabricators and construction companies.Preliminary marketing studies for the concentrates have commenced as haveproject finance discussions. Ayax is presently upgrading the 38 kilometre access road to the site. Equipmentnow owned and operated by the company includes bulldozers, trucks, shovelsscrapers and a road roller. Accommodation at site has been completed foremployees and contractors who are engaged on this road construction as well assite investigation drilling and environmental base line studies. Update on Kola Exploration Since May 2007, a total of 4,950 metres of drilling have been completed in 42holes on the Kola exploration properties. 24 of these holes have been completedon the Nyalm property, 11 on Pellapahk and 7 on Oleninskoye. In addition atotal of 8 trenches along 843 metres have been completed on the Nyalm deposit.At present 1,370 core samples from 26 holes as well as 172 channel samples fromthe trenches have been prepared and shipped for assay. Upon completion of thegeological logging, core splitting and sampling there will be an additional 800core samples and 200 channel samples which will be shipped for assayrepresenting the work completed to-date. A topographic survey at 1: 5000 and 1: 2000 scales has been carried out atPellapahk and Oleninskoye, and preliminary metallurgical testwork has beencarried out on a 250 kilogram bulk sample formed from borehole core fromPellapahk. Hydrogeology and geotechnical studies have also been carried out at Pellapahkand Oleninskoye. To complete this phase of the work programme a further 7 drill holes are plannedas well as 4 trenches totalling 120 metres at Oleninskoye and 2 trenches over100 metres at Leshaya. From the assay results received to date the deep core drilling has confirmed theextension of the Oleninskoye orebody #3 to a depth of over 300m. Nyalm drillinghas intersected extensive zones of mineralised quartz stockwork intersected overthicknesses of 7-15 meters with gold grades of 1.0 to 1,5 grammes per tonnewithin which are high grade veins with gold grade of from 4,7 to 11,2 grammesper tonne. Drilling on the Pellapahk molybdenum, copper deposit has defined anextensive mineralised zone with the potential to be very large. The mineralisedzone remains open along strike. There is a potentially similar sized satellitedeposit to the north outline by a similar geochemical anomaly to that ofPellapahk which is as yet unexplored. Assay results have been delayed as a result of the workloads being experiencedby assay offices but the results will be reported when they are received andanalysed. Leonid Skoptsov, Ovoca's CEO, states that "The Goltsovoye Bankable FeasibilityStudy is progressing as planned and activities on site are being carried out toenable us to mobilise construction as quickly as possible. Road upgrading workis underway, equipment has been purchased and initial accommodation and fuelstorage facilities have been built. We are actively looking at ways toaccelerate the site construction activities. At Kola work has been underway forthe past four months with drilling programmes focused on Oleninskoye, Leshayaand the Nyalm deposits. There is a backup of assays awaiting results due to theheavy workload of all assay laboratories and we eagerly await the results in thecoming weeks. The programme for the winter months will be decided once theseresults have been received and analysed." The above information has been reviewed and verified by Roger Turner, Directorand Chairman of Ovoca, for the purposes of the Guidance Note for Mining, Oil andGas Companies issued by The London Stock Exchange in March 2006. Mr. Turner,with 41 years of mining engineering, management and consulting experience,graduated as a mining engineer from the Cambourne School of Mines and is amember in good standing with the Institute of Materials, Mining and Metallurgyand a UK Chartered Engineer. Ovoca Resources Plc is an international exploration company with dual listing in London (OVG.L) and Ireland (OVX.IR), exploring for Precious and base metals in Russia, Sweden and Ireland For further information please visit www.ovocagold.com or contact: Leonid Skoptsov - Ovoca Gold Plc Nick Bias / Alex Buck - Buck Bias (UK PR)Tel + 7 (0)495 648 2646 Tel: +44 (0)7887 920 530 / +44 (0)7932 740 452Email: leonid.skoptsov@ovocagold.com Email: nick@buckbias.com / alex@buckbias.com John Frain - Davy John O'Connor - Ovoca Gold PlcTel : +353 (0)1 679 6363 Tel: +353 (0)1 633 0523Email: john.frain@davy.ie Email: john.oconnor@ovocagold.com This information is provided by RNS The company news service from the London Stock Exchange