Patagonia Gold Regulatory News (PGD)

8 Feb 2005 07:00

Patagonia Gold PLC08 February 2005 8 February 2005 Patagonia Gold Plc DRILLING AND EXPLORATION UPDATE Patagonia Gold Plc ("Patagonia Gold") is maintaining a high level of explorationactivity in southern Argentina and Chile with a total of eleven explorationteams, supported by two consultants, operating in the Chubut, Rio Negro andSanta Cruz Provinces of Argentina and in southern Chile. Patagonia Gold is conducting exploration on 55 properties, covering 3,717 squarekilometres, of which the principal ones are: Argentina Crespo Project: The drill programme initiated in early 2004 on the Cabana Zonereturned significant gold intersections. Significant drill hole intersections not previously reported include: Drill Hole From Intersection Gold Metres Metres g/t (ppm)CR-69 7.0 3.0 14.5CR-70 14 2.0 7.1CR-70 28 5.6 10.2CD-86 58.5 1.5 4.5CD-86 65.2 1.8 4.0 The high gold values encountered were subsequently established to be associatedwith supergene enrichment and were generally restricted to the intersection ofthe two main structures with the remainder of the zone returning lower grades. Work is continuing on other prospective areas at Crespo. Results from the property wide stream sediment sampling programme has led to thediscovery of three new prospective zones of veining, Western veins, Lazo and theNorthern vein zone. The latter zone, discovered only in the past two weeks, hasso far been mapped for a strike length of 2.2 kilometres. Initial sampling onthese zones has established grades of up to 14g/t gold. In addition a geophysical survey is currently being conducted over an extensivepaleosurface which could represent the upper level of a complete epithermalsystem. Environmental Impact Studies (EIS) for these areas are currently being preparedahead of a scout drilling campaign scheduled to be carried out in the secondquarter. Property 36: exploration has identified multiple veins over a large area on thisproperty, with surface samples returning values of up to 3.7g/t Au 269g/t Ag. An EIS has been submitted to the Rio Negro Province and, on receipt of theapproval, a 2,000m scout drill programme will commence. A geophysical survey iscurrently being conducted to establish the possible presence of buried drilltargets. The Gastre Block: consisting of 6 cateos covering 550 square kilometres, islocated in north central Chubut within the proven mineralised belt extendingfrom IMA's Navidad silver project in the south east to Aquiline's tenementscontaining the Calcatreu gold project in the northwest. This property is currently being explored by two teams led by ConsultingGeologist Christopher Cooper, who was involved in the discovery of the worldclass epithermal gold vein, Galadriel Sur, at Esquel. Prospecting has returned rock sample values of up to 5g/t Au and 50g/t Ag Cerro Colorado: acquired late last year, is located in the Andean cordillera tothe south of Esquel and contains an extensive area of alteration of the typeassociated with high sulphidation gold systems. Sampling to date by PatagoniaGold has returned values over 5g/t Au. The main zone, outcropping over an areaof 700m by 300m, is currently being evaluated by Nick Callan, an independentconsultant geologist. The Carrenleufu Block: consisting of 6 cateos covering 600 square kilometres, isalso located in the Andean cordillera to the south of Esquel and containsJurassic volcanics and structures favourable for hosting gold deposits. Aproperty wide stream sediment sampling programme, nearing completion, hasreturned initial results of up to 6g/t gold indicating the highly anomalouscharacter of the area. Mapping and detailed sampling of the anomalous drainageswill now be conducted by two exploration teams. Chile Coyhaique Project: Intensive property wide exploration of the Coyhaique Projectconducted over the past 16 months, including drilling of the four main veins,has failed to meet expectations. Our target at Coyhaique was to identify a substantial economic deposit. Resultsto date have not provided sufficient confidence to continue with this projectwhilst there are many other prospective areas in Patagonia Gold's portfolio yetto be explored. Accordingly, WestMag Ltd, has been advised that Patagonia Gold no longer wishesto proceed with the option to purchase the Coyhaique mining concessions. Geological management and exploration teams are concentrating on targetgeneration and exploration in the Cordilleran areas of both Argentina and Chile.Exploration of other prospective properties held by Patagonia Gold iscontinuing: Cerro Aguja in southern Chile, a high sulphidation gold system,where the central diatreme breccia has now been accessed and sampled; therecently acquired Puerto Ibanez properties in southern Chile where initialsampling has returned grades of over 2g/t gold and 1225g/t silver and in SantaCruz on property 29, where extensive areas of epithermal veining has beenidentified and sampled. New ZealandNegotiations for the sale of HPD-New Zealand have been terminated. PatagoniaGold will continue to explore and add value to this portfolio of highlyprospective properties. Bill Humphries said; "I am very happy with the progress and results that ourexploration team achieved in 2004 and look forward to this year withanticipation that our exploration efforts will be rewarded." For more information please contact Bill Humphries / Richard Prickett Leesa PetersPatagonia Gold Plc Conduit PRTel: + 44 (0)20 7409 7444 Tel: +44(0)20 7618 8708www.patagoniagold.com /+44(0)781 215 9885 END This information is provided by RNS The company news service from the London Stock Exchange