SolGold Regulatory News (SOLG)

22 Apr 2008 07:01

Solomon Gold PLC22 April 2008 22 April, 2008 Announcement to London Stock Exchange Solomon Gold plc SOLOMON GOLD SECURES FAURO TENEMENT Solomon Gold Plc (Solomon Gold or the Company) is pleased to announce that ithas been issued with a Letter of Intent to grant a Prospecting Licence to theCompany for the Fauro project area by the Solomon Islands Minister for Mines,Energy and Rural electrification. The Fauro project area is located on the north western end of Solomon Islands onthe island of Fauro, Shortland group of islands, Western Province, immediatelysouth of the Papua New Guinea border and approximately 50 kilometres south eastof the giant Panguna copper gold porphyry deposit on Bougainville Island. FauroIsland lies on the south-east trending volcanic arc that extends from the Tabargroup of islands in Papua New Guinea through the Solomon Islands volcanic chain.Fauro Island exhibits all the favourable characteristics of an area that ishighly prospective for both oxide and epithermal gold mineralisation. The Fauro project area covers an extinct volcanic caldera with extensivelyaltered and brecciated quartz rich intrusive and volcanic rocks. The area hasyielded significant gold anomalies in surface sampling and drilling programsconducted by other explorers, notably BHP in the late 1980s and Western PacificMining Corporation in the late 1990s. In the light of the results of workcarried out initially by the Solomon Islands' Ministry of Natural Resources inthe early 1970s and by these previous explorers Solomon Gold considers the Faurogold project area to have considerable potential for the discovery of both oxideand epithermal gold deposits. The area covered by the Prospecting LicenceApplication measures approximately 70 km2 and is considered by Solomon Gold tobe geologically analogous to the Lihir Island gold mine which has reportedmeasured and indicated resources of approximately 35 million ounces of gold. The issue of the Letter of Intent by the Minister enables Solomon Gold to moverapidly to secure all necessary land access agreements with local landowners onFauro Island, facilitating the grant of a Prospecting Licence. Accordingly theCourt action announced by the Company on March 4th, 2008, is now settled. The Chief Executive of Solomon Gold, Nicholas Mather said: "The Board of Solomon Gold is heartened by the issue of the Letter of Intent forFauro. The project will supplement our ongoing projects on Guadalcanal. TheLetter of Intent vindicates our faith in due process in Solomon Islands, aregion we regard as highly prospective and a great place for mining explorationcompanies to be doing business. The Minister has indicated to us that theGovernment considers the exploration and mining industry to be likely to play avery strong role in the next phase of Solomon Islands' economic renaissance. Broad distribution of gold in soil anomalies, and high grades returned fromstream sediment, outcrop and channel rock chip samples as well as drillintersections point to one or more strongly gold mineralising events on FauroIsland. These results, which have outlined multiple targets, give us greatencouragement to negotiate access agreements with the landowners and start ourexploration programme as rapidly as possible. The Company will make good andrapid use of our operational strengths in Solomon Islands." The BHP work programs yielded gold anomalies from soil, rockchip, channel anddrill core samples on numerous targets over a 16 km2 area interpreted to be theremnant western rim of a volcanic crater which had developed over the upperlevels of a large copper and gold system. Solomon Gold considers the location ofthe project, approximately 50 km south east of the giant Panguna porphyry coppergold deposit on the Island of Bougainville is testimony to the prospectivity ofFauro. The geology of the area indicates that the mineral system has beenexposed at a high level in the gold dominant zone. This level is considered tobe analogous to the depth of exposure for Lihir Island, also in Papua NewGuinea, which hosts approximately 35m ounces in gold resources. Work by earlier explorers on Fauro defined a number of prospects. Three of themore advanced prospects are Kiovakase, Hornbill and Meriguna, key results forwhich are summarised below. The Ballyorlo and Bataha prospects also show highprospectivity based on stream sediment sampling and geology but require furtherwork. Kiovakase Prospect: • 400m x 150m gold in soil anomaly ( > 0.2gpt Au) • Highest gold in soil value of 2gpt Au • Channel sampling in bulldozer cuts returned up to 18m at 1.42gpt Au • Highest grade rock chip sample of 317gpt Au • Best results from the four drill holes completed at Koviakase were: Hole ID Depth m Au gptKD1 16 - 17 0.61KD4 66 - 67 0.54 Hornbill Prospect: • 480m x 400m gold in soil anomaly open to south and west in a silicified dacite host • At least seven sub-parallel zones of gold enrichment • Highest gold in soil value of 22.6gpt • Channel sampling in bulldozer cuts returned up to 30m at 1.42gpt Au with one zone of 2.5m grading 24.60gpt Au • Highest grade rock chip sample of 5.04gpt Au • Two drill holes started by Western Pacific showed significant mineralisation reporting a 0.5m intersection grading 8gpt Au and a 5m zone at 0.32gpt Au. A second hole encountered a pyritic stockwork and terminated in mineralisation at 116m Meriguna Prospect: • 500m x 300m gold in soil anomaly open to south and west • Highest gold in soil value of 1.45gpt Au • Channel sampling in bulldozer cuts returned 30m at 1.6gpt Au, 10m at 5gpt Au and 6m at 4.9gpt Au • Other trench results include: 5m at 3.95gpt Au, 30m at 1.60gpt Au, 4m at 8.74gpt Au, 6m at 2.3gpt Au, 5m at 2.93gpt Au and 6m at 4.90gpt Au. • Reported diamond drill intersections from the Loklokimola area of Meriguna Prospect include: Hole ID Depth m Thickness m Au gptLD1 57 - 58 1 0.66 76 - 77 1 0.58LD2 3 - 16 13 0.95 81 - 83 2 0.73LD3 44 - 45 1 0.73 49 - 53 4 0.55 73 - 75 2 3.00 110 - 111 1 1.88 113 - 114 1 0.63LD4 4 - 6 2 0.94 16 - 18 2 1.43 22 - 24 2 0.91 28 - 32 4 2.52 46 - 48 2 0.59 54 - 57 3 0.79LD5 4 - 6 2 0.55 18 - 24 6 0.85 30 - 44 14 1.06 The historic results indicate the potential for a significant gold resource inoxidised zones close to the surface and Solomon Gold intends to test theseprospects systematically by trenching followed by a shallow and an extensivedrilling program. Deeper drilling will also be undertaken to test systems whichwould have been sources for the oxide zones. The Company intends to commence a program of immediate community liaison onFauro to reinvigorate previously established relationships with a view to accessagreements being executed swiftly. A camp will be established to provide supportfor the geophysical and drilling program to enable rapid follow up of theresults collected by earlier explorers and by the Solomon Islands Ministry ofNatural Resources. About Solomon Gold Solomon Gold holds extensive tenements on the main Island of Guadalcanal,Solomon Islands, for minerals exploration, focusing on copper and gold richporphyry systems and high grade epithermal gold mineralisation. The Companylisted on AIM on 10 February 2006 after a £5m capital raising. The Company hasidentified approximately 30 km2 of mineralisation indicative of significantporphyry copper gold and epithermal gold mineralisation systems and is currentlyconducting a three rig program drilling key targets. Solomon Gold believes thearea located on the southwest Pacific Rim to host potential for the discovery ofa world class copper gold porphyry system similar to other large ore bodies inthe region such as Ok Tedi, Grasberg and Bougainville which host resources inexcess of 40m oz of gold equivalent as gold and copper. The Company is staffedby an active team of expatriate and Solomon Island geologists and field hands,supported by integrated logistics support services. The program is now augmented by the services of two drilling contractorsoperating a total of three rigs for Solomon Gold, and a helicopter servicecontract. In late 2007 the Company announced an intersection of 32m @ 9.45 g/t gold from108m in drill hole SK11 at Sutakiki in the centre of the broadly mineralisedintrusive zone. Two of the three drill rigs are currently active at Sutakiki andthe third is testing targets in the Koloula Valley to the south. In December 2007 Solomon Gold raised a further £3.5m to continue working on theGuadalcanal projects. It is the current intention of Solomon Gold to define a world class porphyrycopper gold deposit with an overprinted high grade epithermal gold deposit andultimately bring it to production. Solomon Gold has access to the requiredexploration, development and financing skills to achieve this goal. The high grade gold mineralisation encountered in the recent drilling atSutakiki is characteristic of high grade gold deposits related to mineralisedtransform structures in Papua New Guinea and the Indonesian archipelago. Qualified Person Information in this report relating to the exploration results is based on datareviewed by Mr Nicholas Mather (B.Sc. Hons Geol.), the Chief Executive Officerof the Company. Mr Mather is a Fellow of the Australasian Institute of Miningand Metallurgy who has in excess of 25 years experience in mineral explorationand is a Qualified Person under the AIM Rules. Mr Mather consents to theinclusion of the information in the form and context in which it appears. By order of the Board DP Cornish Company Secretary Contacts: Mr Duncan Cornish Secretary Tel: +61 7 3303 0660 or dcornish@solomongold.com Mr Stephen Weir RFC Corporate Finance Nominated Advisor Tel +61 2 9250 0048 or Stephen.Weir@rfc.com.au This information is provided by RNS The company news service from the London Stock Exchange