Patagonia Gold Regulatory News (PGD)

16 Nov 2005 07:01

Patagonia Gold PLC16 November 2005 PATAGONIA GOLD PLC Trading Symbol PGD.L PURCHASE OPTION AGREEMENT FOR KEY PROPERTIES IN CHUBUT PROVINCE, ARGENTINA. •Patagonia Gold Plc ("Patagonia Gold") has entered into a Purchase Option agreement with Meridian Gold Group companies (MGG), for the exclusive right to acquire up to 100% of their exploration properties, Mina Cherque 1 and Cateo Canadon Verde, located in the Chubut Province. •Initial results from sampling along the Western vein system predominantly within the newly acquired Mina Cherque 1 property, has returned high-grade values of up to 64.80 grams per ton (g/t) gold and up to 213g/t silver. •Approvals have been received from the Chubut Mines Directorate for two Environmental Impact studies, submitted to support proposed drill programmes on the Crespo Project. Mina Cherque 1 (Cherque), Expte: 13745/01 Tehuelches Region covering 23.3 squarekilometres, is strategically situated within Patagonia Gold's highly prospectiveCrespo project, located in south western Chubut 200 kilometres south of Esquel. The Crespo project, covering 600 square kilometres, is host to numerous lowsulphidation epithermal vein systems discovered by Patagonia Gold's explorationteams including; Cabana, Jasper, El Lazo and Northern, where ongoing explorationand drilling has established the presence of widespread, high-grade, goldmineralisation. A property wide stream sediment survey together with the interrogation of highdefinition satellite imagery identified a strong anomaly in the central westernregion of the Crespo project, which led to the discovery of the 'Western' veinsystem. Mapping to date has defined this vein system for over 880 metres mostlywithin the Cherque property. Results from a sampling campaign along the vein system has returned high gradevalues with 5 samples reporting greater than 10 g/t gold, the highest being64.80 g/t gold and 5 samples reporting greater than 50 g/t silver, the highestbeing 213 g/t silver. The entire north-south corridor through Cherque, between the previouslydiscovered Northern vein system and the Western veins to the south, exhibitsstrong hydrothermal alteration and contains many, as yet untested, quartz veinsand silicified structures.Approvals have been received from the Chubut Mines Directorate for two of theEnvironmental Impact studies (EIS) submitted to support the proposed drillingcampaigns on the El Lazo veins and the 'Paleosurface' area on the CrespoProject. The EIS for drilling of the Northern and Western Veins is beingprepared for submittal in early December. The agreement provides for Patagonia Gold to spend US$ 600,000 on explorationstudies over a maximum period of 4 years to earn a 60% interest in the property.At that juncture, a Joint Venture (JV) could be formed to advance the property,or alternatively, MGG could retain a 2% net smelter return (NSR) in which casePatagonia Gold would be required to spend a further US$ 400,000 over a maximumperiod of 3 years to earn the remaining 40% interest. Cateo Canadon Verde, File 14,218/01 Languineo Region covering 15 squarekilometres, is strategically situated within Patagonia Gold's highly prospectiveCarrenleufu Block, located in the Andean cordillera along the border with Chilein south western Chubut. The Carrenleufu Block, covering 560 square kilometres, is in the early stages ofexploration with a first pass drainage sampling survey being completed earlierthis year before the onset of winter. Results from the survey were highlypromising with several panned concentrates from waterways returning values of upto 6 g/t gold. Exploration of these anomalous drainage areas will focus onidentifying the source of the gold mineralization. The agreement provides for Patagonia Gold to spend US$ 240,000 on explorationstudies over a maximum period of 4 years to earn a 60% interest in the property.At that juncture a JV could be formed to advance the property or, alternatively,MGG could retain a 2% NSR in which case Patagonia Gold would be required tospend a further US$ 160,000 over a maximum period of 3 years to earn theremaining 40% interest. ENDS For more information, please contact: Richard Prickett / Bill Humphries Anthony Cardew/Tim RobertsonPatagonia Gold Plc Tel: +44 (0) 20 7930 0777Tel: + 44 (0)20 7409 7444 Fax: +44 (0) 20 7925 0647www.patagoniagold.com Email: tim.robertson@cardewgroup.comTrading Symbol PGD.L This information is provided by RNS The company news service from the London Stock Exchange