5 Aug 2013 08:49
Regency Mines Plc
("Regency" or the "Company")
Update on the Red Sea Concession, Sudan
05 August 2013
Regency Mines plc, ("Regency" or "the Company"), the mining exploration and mineral investment company with interests in nickel and other minerals in Australia and Papua New Guinea is pleased to announce an update on its agromineral exploration in Sudan, a project where Regency has farm-in rights under an option agreement with International Mineral Resources (Agrominerals Sudan) Ltd ("IMRAS").
Highlights
·; 6 gypsum targets identified at surface with combined exploration target potential tonnage estimates of 16 - 808Mt* of gypsum.
·; Evidence of potassium-rich evaporites (potash) discovered in historic borehole logs proximal to the Red Sea concession area.
·; Area Of Interest, prospective for potash, identified in the south of the concession area.
·; Further exploration fieldwork planning underway to define a potential potash exploration target and further delineate identified gypsum targets.
Between 27th June and 10th July 2013, a team led by Regency geologists spent 4 days in the field carrying out preliminary exploration on the ground at the IMRAS-held Red Sea concession. A further 10 days were spent conducting investigations at the offices of the Geological Research Authority of the Sudan ("GRAS") and meeting with officials from the Ministry of Minerals in Khartoum. Prior to and after the field trip, over 60 combined work-days were spent at the London office, completing extensive desk-top studies and literature reviews of the known geology of the area, and report-writing. This work also included GIS compilation of available geospatial data for the concession.
The concession is the subject of a farm-in agreement between International Mineral Resources (Agrominerals Sudan) ("IMRAS") and Regency Mines PLC ("Regency"), who currently have three primary concession areas for agromineral exploration; Jebel Abyad (Block Phos 7), Abu Hashem (Block Phos 7b) and Red Sea (RS 9).
The Red Sea concession is located 200km north of Port Sudan in the Red Sea State. Direct access to the concession is via a well maintained asphalt highway which runs north, from Port Sudan, towards the Egyptian border and the flat topography of the general terrain allows for off-road navigation to most locations within the area.
The primary aim of the field programme was to identify and define potential evaporite targets (gypsum and potash) exposed at surface within the concession area via geological mapping and sampling. Prior to the field trip, Regency geologists analysed key information from satellite imagery in the form of Landsat 7 images across the concession. From this detailed topographic information and geo-referenced geological maps were produced.
Field studies consisted of regional scale geological mapping and sampling over widely spaced traverses and geochemical analysis using a Niton XL3t GOLDD+ series handheld XRF analyser. Mapping was completed at a 1:25,000 scale, during which field descriptions were recorded at 90 locations and 35 samples were taken from outcrops of interest. As a preliminary indication of the gypsum quality present across the area, handheld XRF analyses were carried out on all samples. Full wet chemical assay results are expected in late September, from which it will be possible to calculate the gypsum purity. Further results are to follow.
Six gypsum targets were identified on the ground, three of which are located within the main area examined during the recent field programme; Akiti North, Akiti South, Akiti South West (see Figure 1). The Shinab, Imama Valley and Imama West targets lie further to the north and, given time constraints, were only investigated briefly on this occasion.
FIGURE 1: Map of the field area showing the location of field studies (red crosses). Target areas shown in orange and green. Red dashed box shows potash Area Of Interest. WGS84 UTMZ37N
While it was not possible to determine the maximum preserved thickness of the gypsum units, a minimum thickness of 0.9m was observed at outcrop. According to published literature (Whiteman, 1971), the maximum possible thickness of the gypsum sequence across the concession area is 54m. Using these values as maximum and minimum parameters, exploration target potential tonnage estimates for all six gypsum targets were calculated and range between 16 - 808Mt*.
The gypsum is believed to belong to the Dungunab Formation, a Miocene age sedimentary sequence known to contain evaporite rich horizons. Historical wells drilled for petroleum exploration in the 1960s by AGIP Mineraria Ltd intercepted over 700m of evaporites in the Dungunab-1 borehole, just south of the Red Sea concession area. Information acquired during the recent visit to the GRAS offices in Khartoum includes well log-summary reports of the Dungunab-1 borehole which describe extensive halite and anhydrite formations, locally rich in potassium (potash).
While no potash or halite was identified at surface during the field visit, the AGIP Mineraria Ltd reference, along with the structural and stratigraphical interpretations made whilst on the ground, indicate a potential potash Area Of Interest (AOI) in the south of the concession area where the halite sequence may be close to the surface. The field work completed by the Regency geologists has led to a reinterpretation of the known geological information across the concession and a more accurate understanding of the local evaporite sequences has allowed for the definition of a solid potash exploration target (see Figure 2).
FIGURE 2: Target and AOI map of the area. Gypsum exploration targets are shown by orange (moderate priority) and green (low priority) circles. Red dashed circle represent the potash AOI. Landsat 7 lithology band composite false colour image 531 as a background. WGS84 UTMZ37N http://www.rns-pdf.londonstockexchange.com/rns/9340K_1-2013-8-5.pdf
Future Work
The next stage of exploration at the Red Sea will include further field work in the Area Of Interest in the south of the concession with a view to defining a potential potash exploration target. The six gypsum exploration targets identified during this field trip will be further examined and evaluated in order to determine the total thickness of the units. The work is likely to include additional geological mapping, sampling and geochemical analysis, and a possible drill and/or trenching programme to fully delineate the extent and thickness of the gypsum and reveal any halite potential if none is exposed at surface within the concession. An application has been submitted to the Ministry of Minerals for a southerly extension of the current concession area.
Enquiries:
Andrew Bell 020 7747 9960 or 07766 474849 Chairman Regency Mines plc
Sandra Spencer 020 7747 9960 or 07757 660 798 Investor Relations Regency Mines plc
Colin Aaronson / David Hignell 020 7383 5100 NOMAD Grant Thornton Corp Finance
Nick Emerson 01483 413500 Broker SI Capital Limited
The information in this report that relates to geology is based on information reviewed by Mr Gary Hurst (MSc), who is a Fellow of The Geological Society of London and Member of The Society of Economic Geologists. Mr Hurst is an employee of Regency Mines plc and has sufficient experience which is relevant to the style of mineralisation under consideration, and to the activities being undertaken. Mr Hurst has reviewed the information in this announcement and consents to the inclusion of the information in the form and context in which it appears
* It is common practice for a company to comment on and discuss its exploration in terms of target size and type. In accordance with Clause 18.1 of the JORC Code however, the Company notes that such information relating to Exploration Targets must be expressed so that it cannot be misrepresented or misconstrued as an estimate of Mineral Resources or Ore Reserves. Furthermore, The Company recognises that the terms Mineral Resource(s) or Ore Reserve(s) must not be used in this context; and that any statement referring to potential quantity and grade of the target must be expressed as ranges and must include (1) a detailed explanation of the basis for the statement, and (2) a proximate statement. Exploration Targets are reported in accordance with Section 18 of the JORC Code and for the avoidance of doubt, Regency notes:
o The potential quantity as reported in respect of the Exploration Targets are conceptual in nature;
o There has been insufficient exploration to define a Mineral Resource; and
o It is uncertain if further exploration will result in the determination of a Mineral Resource.