Serabi Regulatory News (SRB)

13 Sep 2006 07:01

Serabi Mining plc13 September 2006 SERABI MINING: EXPLORATION UPDATE - SEPTEMBER 2006 Serabi rolls out exploration programme. Results at Jardim do Ouro point togrowing potential near to the Palito operation, while regional exploration getsunderway with a potential new discovery at Sucuba. Serabi Mining plc ("Serabi" or the "Company") reports progress and results fromits exploration programme being carried out across the Company's portfolio ofprojects in the Tapajos region of northern Brazil. Highlights include: Improved exploration facilities, equipment and increased budget provides strong basis for expanded exploration programme Expanded geochemical survey highlights additional targets at Jardim do Ouro which are expected to form the basis for new drill targets Geological survey and geochemistry results indicate new targets at Rio Novo South, 5 km directly along strike of the Palito Main Zone mineralisation Situated near the Palito Mine, drilling of a major coincident geochemical and geophysical anomaly at the Bill's Pipe project intersects massive sulphides, with anomalous gold and copper grades Initial drill results at Ruari's Ridge return attractive gold and copper grades Located 10 km west of Palito, drill results from the recently discovered Sucuba project indicate the occurrence of a poly-metallic deposit Drilling at Pombo confirms the presence of a wide mineralised structure, with indications of porphyry associated alteration at depth This review excludes ongoing geological and drilling work currently beingcarried out on the Palito Main Zone, location of the Company's Palito mine,which will be reported on after the end of the year. Results and Outlook The exploration programme is focused on two strategic goals in order to provideshort/medium and longer term growth potential. Corresponding to this approachthe programme is divided into two areas: 1. Jardim do Ouro - the district immediately adjacent to the Palito mine.Prior to its listing Serabi had identified a number of advanced projects thatshow good resource potential and could become satellite deposits feeding thePalito operation. 2. The Tapajos - the region in which Palito is situated has historicallyhosted extensive artisanal gold production from alluvial and weathered bedrocksources. The region exhibits a wide variety of prospective geological settings,which includes the potential for large tonnage, low-grade style deposits, inaddition to other Palito-type, high-grade gold mineralisation. Jardim do Ouro Situated immediately adjacent to the Palito mine, the focus of the current workprogramme across the Jardim do Ouro district can be summarised as: Additional, detailed geochemistry and geology of known anomalies and projects: Central Jardim do Ouro area, Ruari's Ridge, Chico do Santo Extension of established geochemistry to adjacent areas: Buruti and Kubanacan situated between Palito Main Zone and Rio Novo South. Preliminary geochemistry and geological survey of new targets: Rio Novo South Detailed assessment of known garimpeiro workings: Chico do Santo, Rio Novo South Preliminary drilling of known targets: Bill's Pipe, Copper Hill, Ruari's Ridge and Rio Novo South Geochemistry Detailed infill auger sampling across the main Palito and Jardim do Ouro areahas greatly improved the definition of significant gold anomalies, in particularat Bill's Pipe and Ruari's Ridge. Further evaluation of the anomalies is beingundertaken and where warranted diamond core drill programmes will then beundertaken. Jardim do Ouro - Project locations, geochemistry and geophysical results http://www.rns-pdf.londonstockexchange.com/rns/8633i_-2006-9-12.pdf Some 5 km south-east and on strike from the Palito mine, work has started at theRio Novo South project. An area of previous garimpeiro workings, a detailedassessment and sampling of the old shafts has confirmed the presence ofextensive gold mineralisation. A 20 line-km geochemical survey has recentlybeen completed over the area, identifying widespread gold and copper values attwo locations, which remain open and will now be followed up by additionalgeochemistry and a short drill programme. Rio Novo South - Project location and exploration overview http://www.rns-pdf.londonstockexchange.com/rns/8633i_-2006-9-12.pdf Bill's Pipe Geochemistry, induced polarization and magnetic surveys previously highlightedthe presence of a major anomaly located approximately 0.50 km north of thePalito Main Zone, known as the Bill's Pipe project. A series of trenches acrossthe centre of the anomaly returned good gold grades, which included 2.0 m at17.56 g/t gold and 1.50 m at 10.75 g/t gold: Sample Trench Length (m) Gold Grade (g/t) 09 4.00(1) 9.43 2.00 1.11 21 1.50 4.50 3.50(2) 5.27 22 1.00 2.48 (1) Includes 2.00m @17.56g/t: (2) Includes 1.50m @10.75g/t Following the arrival of additional surface rigs, a limited drill programme wassubsequently carried out at Bill's Pipe, with gold mineralisation encountered onstructures similar to that at the nearby Palito mine. This programme will becontinued, subject to interpretation of the results and further geophysicalwork. Intersection Drill Hole Length (m) Gold Grade (g/t) PDD 212 * 0.51 27.00 0.95 20.70 PDD 215 0.60 2.14 1.99 1.56 PDD 217 1.50 3.77 PDD 236 0.71 5.70 PDD 238 1..50 3.33 * previously announced Bill's Pipe Project - Geochemistry, drill hole and trench locations Bill's Pipe Project - Cross section A looking north west http://www.rns-pdf.londonstockexchange.com/rns/8633i_-2006-9-12.pdf Ruari's Ridge Located 0.50 km south-west of the Palito Main Zone, Ruari's Ridge project is thelocation of a strong gold geochemical anomaly, situated on the flank of asignificant magnetic geophysical high. Drilling has recently started at thislocation, with the first hole encountering massive sulphides at depth andreturning encouraging assay results. The drill programme will be continued totest the strike and depth extensions of the anomaly. Intersection Drill Hole Length (m) Gold Grade (g/t) Copper Grade (%) PDD 255 1.00 6.37 ns 0.62 2.69 0.913 Ruari's Ridge Project - Exploration results and drill hole locations http://www.rns-pdf.londonstockexchange.com/rns/8633i_-2006-9-12.pdf Tapajos For the first time Serabi is able to report progress from the company'sexploration programme outside of the Jardim do Ouro / Palito district in theTapajos region. Sucuba Detailed geochemistry and follow-up drilling has identified a new project areaapproximately 10 km west of Palito. Although nearby, this area has notpreviously been considered part of the established Palito mining district,though any potential resource could easily be transported to Palito forprocessing. Approximately 14 line-km of multi-element geochemistry has identified a numberof gold and copper anomalies, the most significant being an area strikingEast-West, some 800 metres by 150 metres, centred on a small garimpeiro pit.Subsequent drilling has confirmed the occurrence of a poly-metallic structure,which will now be further evaluated along strike and at depth. Regional mapping and geochemistry is underway, with a planned ground magneticsand radiometric survey to better define the geology and potential for similartargets situated at the edge of an inferred magnetic basic intrusion. Intersection Drill Hole Length (m) Au g/t Ag g/t Pb % Zn % FS 001 1.77(1) 6.43 4.38 0.43 0.57 0.50 5.04 ns ns ns 0.93 3.84 ns ns ns FS 002 1.82 3.26 ns ns ns 0.69 5.33 ns ns ns 0.50 1.17 ns ns ns (1) Includes 0.50m @20.42g/t Sucuba Jardim do Ouro and Rio Novo South - Geochemistry overview Sucuba Project - Geochemistry and drill hole locations Sucuba Project - Cross Section looking east http://www.rns-pdf.londonstockexchange.com/rns/8633i_-2006-9-12.pdf Pombo At the end of 2005 Serabi acquired an option over the Pombo project, situated inthe neighbouring state of Mato Grosso, some 500 km south of Palito. Extensivework had already been undertaken at Pombo, which is considered to have a numberof geological similarities with Palito. Serabi has been drilling along the mainWest-East structure, with results confirming extensive gold-coppermineralisation across the central section (FP 001), which included gold valuesof 0.98 m at 13.99 g/t and 0.62 m at 9.83 g/t. Unfortunately due to difficultground conditions a number of early holes were not completed and a largerdrill-rig was relocated to overcome this problem. Drilling has now moved west and east of the central mineralised section, whereinitial holes completed some 100-150 m along strike indicate continuing strongalteration with associated sulphide mineralisation. Drill Hole Intersection Length (m) Au g/t Cu % FP 001 16.41(1) 2.28 0.174 FP 002 6.87 1.12 ns 0.96 2.57 ns FP 004A 1.46 3.72 0.040 (1) Includes 9.95m @ 3.5 g/t Au and 0.230% Cu and 4.46m @ 6.69 g/t Au and 0.505% Cu Pombo Project - Channel samples and drill hole locations Sucuba Project - Cross section A looking north east http://www.rns-pdf.londonstockexchange.com/rns/8633i_-2006-9-12.pdf Two kilometres north of the Pombo main vein, at an area named Guido,hydrothermally altered rocks with disseminated pyrite and chalcopyrite outcrops.The occurrence of abundant magnetite, goethite, hematite and specularite in theassociated veins, indicates that the area could hold potential for porphyrycopper type mineralization. Other Serabi has extensive project interests throughout the Tapajos gold region and isnow embarking on a systematic programme of their evaluation. In this regard afurther assessment of projects has recently commenced in order to refine projectpriorities, using the existing database and, where warranted, on-the-groundgeology and follow-up geochemistry and geophysics. As part of this a preliminaryfield assessment of the Jutai project has recently commenced confirming previousresource estimates in saprolite with preliminary metallurgical work detailingthe metallurgical characteristics of the ore. Previous Rio Tinto workhighlighted a saprolite resource of 4.4 Mt at 0.60g/t gold associated with abasic igneous intrusion. Commenting on the exploration progress made during 2006, Graham Roberts,Chairman of Serabi said: "With an extensive project portfolio and comprehensive facilities nowestablished, the expansion of exploration across Jardim do Ouro and the Tapajosmarks an important phase in the development of Serabi, providing growthpotential in the short, medium and long term. We now expect this programme willgather pace, with the objectives of continuing resource expansion at the Palitomine, starting to define resources on other Jardim do Ouro projects anddelivering outline economic potential at other Tapajos projects." Enquiries Serabi Mining plc Parkgreen CommunicationsGraham Roberts Tel: 020 7220 9550 Simon Robinson 020 7493 3713Chairman Mobile: 07768 902475 Clive Line Tel: 020 7220 9553 Ana Ribiero 020 7493 3713Finance Director Mobile: 07710 151 692 ana.ribiero@parkgreenmedia.com E-mail: contact@serabimining.comWebsite: www.serabimining.com For a full version of this press release please visit our website. NOTES TO EDITORS General Background Notes Since listing on the AIM market of the London Stock Exchange last year the workprogramme initially focussed on expanding the resource base at the Company'smining operation at Palito, successfully achieving a 74% increase on the globalresource at December 31 2005 to 825,900 ounces gold equivalent (see PressRelease, 14 February 2006). In the meantime, management has been active puttingin place the facilities to undertake an aggressive exploration and evaluationprogramme across the Company's extensive regional project portfolio, whichexceeds 100,000 hectares. By the end of the first quarter 2006 the Company hadincreased it's surface diamond drilling capacity and improved the associatedgeological and laboratory facilities, in anticipation of an expansion ofexploration activities which is now taking place at a number of projects. As part of the expanding exploration effort, Serabi took delivery of two newsurface diamond core drilling rigs earlier this year. As a result the companynow owns and operates four rigs, which are currently deployed at Palito, Jardimdo Ouro, the Sucuba project and the Pombo project. Additional crews have beenrecruited and trained to increase rig utilisation. In addition, extensivegeological and geochemical work is underway at a number of locations. Groundmagnetics and radiometric surveys will also be utilised in the future to improvedrill targets. The Tapajos is a major, under-explored mineral province that extends over anarea about the size of Belgium. Artisanal miners ("garimpeiros") are thought tohave extracted up to 30 million ounces of gold from mostly alluvial and surfaceweathered bedrock deposits since the 1970's. The company is currentlyestablishing production at its 100% owned underground Palito Gold Mine. Serabiintends to expand resources organically through its existing project portfolioacross the region. Serabi's portfolio of exploration properties includes a number of relativelyadvanced projects in the Jardim do Ouro ("Garden of Gold") district around thePalito Gold Mine and other projects elsewhere in the Tapajos region, which areat an earlier stage of assessment. Serabi has access to an extensive explorationdatabase from Rio Tinto plc ("Rio Tinto") which covers much of the Tapajosregion. This data continues to be assessed and could form the basis of furtheracquisitions. This information is provided by RNS The company news service from the London Stock Exchange