REG - SolGold PLC - Cascabel Exploration Update - Tandayama-Ameríca

SolGoldAnnouncement

02/12/2021 07:00

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RNS Number : 2706U  SolGold PLC  02 December 2021

2 December 2021

SolGold plc

("SolGold" or the "Company")

Drilling Update: Tandayama-Ameríca, Cascabel Project

 

The Board of Directors of SolGold (LSE & TSX: SOLG) is pleased to provide
a drilling update on its Tandayama-Ameríca ("TAM") porphyry copper-gold
deposit at the Cascabel project in northern Ecuador.

The TAM deposit contains a maiden Mineral Resource Estimate ("MRE") of 233Mt @
0.33% CuEq( 1 )  for 0.53Mt Cu, and 1.20Moz Au in the Indicated category,
plus 197Mt @ 0.39% CuEq for 0.52Mt Cu, and 1.24Moz Au in the Inferred
category. The TAM deposit lies approximately 3km north of the Alpala deposit
that comprises 2,663 Mt at 0.53% CuEq( 2 ) in the Measured plus Indicated
categories and contained metal content of 9.9 Mt Cu, 21.7 Moz Au and 92.2 Moz
Ag( 3 ) at the Company's Cascabel project, held by Exploraciones Novomining
S.A. ("ENSA"), an 85% owned subsidiary of SolGold.

HIGHLIGHTS

 

Ø A total of approximately 26,000m of diamond drilling from 33 drill holes
has now been completed at the TAM deposit, equating to an additional c.4,000m
of resource extension and geotechnical drilling completed since the recent
release of the TAM maiden MRE on 19 October 2021.

Ø The ongoing drilling points to further potential resource growth, with
final assay results from holes 19-24 extending mineralisation potentially
mineable by both open pit and underground bulk mining methods.

Ø Highlights of assays received from holes 19-24 include:

·   Hole 24: 568m @ 0.50% CuEq( 4 )  including 220m @ 0.71% CuEq and 64m @
1.01% CuEq

·   Hole 23: 156m @ 0.37% CuEq including 48m @ 0.92% CuEq

·   Hole 19: 455.7m @ 0.26% CuEq (open at depth) including 304m @ 0.31%
CuEq and 48m @ 0.43%CuEq

 

Ø Recent assays bode well for future resource growth in the southeast quarter
of the open pit resource area and particularly in the east and southeast depth
extensions of the potential underground resource area where the highest-grade
mineralisation encountered thus far remains open.

Ø Highlights of assays received from holes 14-18 (included in the MRE)
include:

·   Hole 18: 186.0m @ 0.28% CuEq including 116m @ 0.36% CuEq

·   Hole 17: 346.0m @ 0.29% CuEq including 90m @ 0.41% CuEq

·   Hole 16: 193.2m @ 0.55% CuEq including 152m @ 0.65% CuEq

·   Hole 15: 191.0m @ 0.31% CuEq including 119m @ 0.38% CuEq

·   Hole 14: 530.5m @ 0.21% CuEq including 70m @ 0.34% CuEq

 

Ø Drilling continues at TAM utilising four diamond drill rigs. The Cascabel
project is still growing, and the additional resources being identified at TAM
provide a strategic fit towards the development of the Cascabel property as a
whole. Further updates to the Cascabel resource base are planned.

 

( 1  )Cut-off grades have been developed independently for open pit mining
methods and underground bulk mining methods. Cut-off grades and copper
equivalency used for reporting were base d on third party metal price
research, forecasting of Cu and Au prices, and a cost structure from mining
studies data available at the time.  Costs include mining, processing and
general and administration (G&A).  Net Smelter Return (NSR) includes
metallurgical recoveries and off-site realisation (TCRC) including royalties
and utilising metal prices of Cu at US$3.30/lb and Au at US$1,700/oz. The
cut-off grade for potentially open pittable material has been calculated at
0.16% CuEq using a copper equivalency factor of 0.632 (whereby CuEq = Cu + Au
x 0.632)., while the cut-off grade for material potentially mineable by a bulk
underground mining method such as block caving has been calculated at 0.28%
CuEq using a copper equivalency factor of 0.654 (whereby CuEq = Cu + Au x
0.654).

( 2  )Alpala MRE was reported at a cut-off grade of 0.21% copper equivalent
(CuEq) using a copper equivalency factor of 0 613
(whereby               CuEq = Cu + Au x 0.613).  Cut-off grades
and copper equivalency used for reporting were based on third party metal
price research, forecasting of Cu and Au prices, and a cost structure from
mining studies data available at the time. Costs include mining, processing
and general and administration (G&A).  Net Smelter Return (NSR) includes
metallurgical recoveries and off-site realisation (TCRC) including royalties
and utilising metal prices of Cu at US$3.40/lb and Au at US$1,400/oz.

( 3 ) See "Cascabel Property NI 43-101 Technical Report, Alpala Porphyry
Copper-Gold-Silver Deposit - Mineral Resource Estimation, January 2021" with
an Effective date: 18 March 2020 and Amended Date: 15 January 2021 (the
"Amended Technical Report"), filed at www.Sedar.com (http://www.Sedar.com) on
January 29, 2021.

( 4  )Significant down-hole drill intercepts at TAM are reported using a data
aggregation method based on copper equivalent (CuEq) cut-off grades with up to
10m internal dilution, excluding bridging to a single sample and with minimum
intersection length of 50m. Copper equivalency factor of 0.632 is used
(whereby CuEq = Cu + Au x 0.632) and is based on third party metal price
research, forecasting of Cu and Au prices, and a cost structure from mining
studies data available at the time. Costs include mining, processing and
general and administration (G&A).  Net Smelter Return (NSR) includes
metallurgical recoveries and off-site realisation (TCRC) including royalties
and utilising metal prices of Cu at US$3.30/lb and Au at US$1,700/oz.

 

References to figures relate to the version visible in PDF format by clicking
the link below:

http://www.rns-pdf.londonstockexchange.com/rns/2706U_1-2021-12-1.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/2706U_1-2021-12-1.pdf)

 

FURTHER INFORMATION

The TAM deposit lies approximately 3km north of the Alpala deposit, at the
Cascabel project, held by ENSA, an 85% owned subsidiary of SolGold. The
project area lies within the Imbabura province of northern Ecuador
approximately 100 km north of the capital city of Quito and approximately 50
km north-northwest of the provincial capital, Ibarra (Figure 1).

To date a total of approximately 26,000m of diamond drilling has been
completed at the TAM deposit, with drill holes 30-33 currently underway
utilising four diamond drilling rigs (Figure 2). Assay results from Holes
25-33 are pending. An additional c.4,000m of resource extension and
geotechnical drilling has been completed since the release of the TAM maiden
MRE on 19 October 2021.

Holes 1-19 were drilled for resource definition in the central, north, west
portions of the deposit. Holes 20, 21, 22, 27, 30 and 32 were drilled
specifically for geotechnical purposes, targeting the proposed west wall of
the potential pit design. All remaining holes focus on resource extension to
the growing underground resources.

A summary of drilling results achieved since hole 14 are included in Table 1.

The full size and tenor of the TAM system has not yet been tested.
Mineralisation remains open to the south and east and at depth. Further
surface geochemical anomalies to the east of the current drilling area require
drill testing.

The maiden MRE at TAM totals 233Mt @ 0.33% CuEq for 0.53Mt Cu, and 1.20Moz Au
in the Indicated category, plus 197Mt @ 0.39% CuEq for 0.52Mt Cu, and 1.24Moz
Au in the Inferred category.

The TAM maiden MRE dataset comprised 17,535m of diamond drilling from holes
1-23, 458m of surface rock-saw channel sampling from 72 outcrops, and 14,566m
of final assay results from holes 1-18.

Potentially open pittable Mineral Resources comprise 201Mt @ 0.33% CuEq in the
Indicated category, plus 61.8Mt @ 0.44% CuEq in the Inferred category, at a
cut-off grade of 0.16% CuEq. Potentially open pittable Mineral Resources
include a higher-grade near-surface zone containing 10.6Mt @ 0.41% CuEq and
5.1Mt @ 0.45% CuEq that should support early cash flows and accelerate pay
back of initial pre-production capital for the Cascabel Project.

Mineral Resources potentially mineable by underground bulk mining methods
comprise 32Mt @ 0.35% CuEq in the Indicated category, plus 135.2Mt @ 0.37%
CuEq in the Inferred category, at a cut-off grade of 0.28% CuEq.

Mineral Resources potentially mineable by underground bulk mining methods
include a higher-grade core, that remains open to the east, southeast and at
depth, containing 16.4Mt @ 0.43% CuEq in the Indicated category, plus 70.4Mt @
0.46% CuEq in the Inferred category, at a cut-off grade of 0.28% CuEq.

The estimation process followed the Canadian Institute of Mining, Metallurgy
and Petroleum (CIM) "Estimation of Mineral Resources and Mineral Reserves Best
Practice Guidelines" (CIM, 2019). The Mineral Resource Estimate is stated in
accordance with CIM Definition Standards (CIM, 2014) and Canadian National
Instrument 43-101 (NI 43-101).

 

Figure 1: Location of TAM, Alpala and Aguinaga deposits at the Cascabel
project.

Figure 2: Comparative plan (TOP) and section (BOTTOM) views of TAM MRE dataset
(LEFT) and the current additional drilling achieved (RIGHT).

Plan view (TOP LEFT) shows TAM maiden MRE assays from holes 1-18 and surface
rock-saw channel samples from 72 outcrops. Plan view (TOP RIGHT) shows
additional assays received from holes 19-24, as well as black drill traces of
holes 25-32 that have assays pending.

Section view (BOTTOM LEFT) looking north, with unlimited window thickness,
showing the potential open pit and underground optimisation shapes identified
at TAM in relation to the additional drilling completed thus far at TAM.

Table 1: Selected intercepts achieved in drill holes 14-24 at the TAM deposit,
Cascabel.

 

Certain information contained in this announcement would have been deemed
inside information.

Qualified Person:

 

Information in this report relating to the exploration results is based on
data reviewed by Mr Jason Ward ((CP) B.Sc. Geol.), the Chief Geologist of the
Company.  Mr Ward is a Fellow of the Australasian Institute of Mining and
Metallurgy, holds the designation FAusIMM (CP), and has in excess of 20 years'
experience in mineral exploration and is a Qualified Person for the purposes
of the relevant LSE and TSX Rules.  Mr Ward consents to the inclusion of the
information in the form and context in which it appears.

 

Information in this report relating to the Mineral Resource Estimate was
reviewed by Dr Andrew Fowler. Dr Fowler is a Chartered Professional Member of
the Australasian Institute of Mining and Metallurgy and has in excess of 20
years' experience in Mineral Resource Estimation, open pit mining, underground
mining and mineral exploration. He is an independent Qualified Person for the
purposes of the relevant LSE and TSX Rules. Dr Fowler consents to the
inclusion of the information in the form and context in which it appears.

 

 

By order of the Board

Dennis Wilkins

Company Secretary

 

CONTACTS

 

 Dennis Wilkins

 SolGold Plc (Company Secretary)                                                  Tel: +61 (0) 417 945 049

 dwilkins@solgold.com.au (mailto:dwilkins@solgold.com.au)

 Ingo Hofmaier

 SolGold Plc (Acting CFO)                                                         Tel: +44 (0) 20 3823 2130

 ihofmaier@solgold.com.au (mailto:ihofmaier@solgold.com.au)

 Fawzi Hanano / Lia Abady

 SolGold Plc (Investors / Communication)                                          Tel: +44 (0) 20 3823 2130

 fhanano@solgold.com.au (mailto:fhanano@solgold.com.au) / labady@solgold.com.au
 (mailto:labady@solgold.com.au)

 Tavistock (Media)

 Jos Simson/Gareth Tredway                                                        Tel: +44 (0) 20 7920 3150

 

Follow us on twitter @SolGold_plc

 

ABOUT SOLGOLD

SolGold is a leading resources company focussed on the discovery, definition
and development of world-class copper and gold deposits. In 2018, SolGold's
management team was recognised by the "Mines and Money" Forum as an example of
excellence in the industry and continues to strive to deliver objectives
efficiently and in the interests of shareholders. SolGold is aggressively
exploring the length and breadth of this highly prospective and gold-rich
section of the Andean Copper Belt which is currently responsible for c40% of
global mined copper production.

The Company operates with transparency and in accordance with international
best practices. SolGold is committed to delivering value to its shareholders,
while simultaneously providing economic and social benefits to impacted
communities, fostering a healthy and safe workplace and minimizing the
environmental impact.

Dedicated stakeholders

SolGold employs a staff of over 800 employees of whom 98% are Ecuadorean. This
is expected to grow as the operations expand at Alpala, and in Ecuador
generally. SolGold focusses its operations to be safe, reliable and
environmentally responsible and maintains close relationships with its local
communities. SolGold has engaged an increasingly skilled, refined and
experienced team of geoscientists using state of the art geophysical and
geochemical modelling applied to an extensive database to enable the delivery
of ore grade intersections from nearly every drill hole at Alpala. SolGold has
over 80 geologists on the ground in Ecuador exploring for economic copper and
gold deposits.

About Cascabel and Alpala

The Alpala deposit is the main target in the Cascabel concession, located on
the northern section of the heavily endowed Andean Copper Belt, the entirety
of which is renowned as the base for nearly half of the world's copper
production. The project area hosts mineralisation of Eocene age, the same age
as numerous Tier 1 deposits along the Andean Copper Belt in Chile and Peru to
the south. The project base is located at Rocafuerte within the Cascabel
concession in northern Ecuador, an approximately three-hour drive on sealed
highway north of the capital Quito, close to water, power supply and Pacific
ports.

Having fulfilled its earn-in requirements, SolGold is a registered shareholder
with an unencumbered legal and beneficial 85% interest in ENSA (Exploraciones
Novomining S.A.) which holds 100% of the Cascabel concession covering
approximately 50km(2). The junior equity owner in ENSA is required to repay
15% of costs since SolGold's earn in was completed, from 90% of its share of
distribution of earnings or dividends from ENSA or the Cascabel concession. It
is also required to contribute to development or be diluted, and if its
interest falls below 10%, it shall reduce to a 0.5% NSR royalty which SolGold
may acquire for US$3.5million.

SolGold's Regional Exploration Drive

SolGold is using its successful and cost-efficient blueprint established at
Alpala, and Cascabel generally, to explore for additional world class copper
and gold projects across Ecuador. SolGold is a large and active concessionaire
in Ecuador.

The Company wholly owns four other subsidiaries active throughout the country
that are now focussed on a number of high priority copper and gold resource
targets, several of which the Company believes have the potential, subject to
resource definition and feasibility, to be developed in close succession or
even on a more accelerated basis compared to Alpala.

SolGold is listed on the London Stock Exchange and Toronto Stock Exchange
(LSE/TSX: SOLG). The Company has on issue a total of 2,293,816,433 fully paid
ordinary shares and 34,250,000 share options.

Quality Assurance / Quality Control on Sample Collection, Security and
Assaying

SolGold operates according to its rigorous Quality Assurance and Quality
Control (QA/QC) protocol, which is consistent with industry best practices.

Primary sample collection involves secure transport from SolGold's concessions
in Ecuador, to the ALS certified sample preparation facility in Quito,
Ecuador. Samples are then air freighted from Quito to the ALS certified
laboratory in Lima, Peru where the assaying of drill core, channel samples,
rock chips and soil samples is undertaken. SolGold utilises ALS certified
laboratories in Canada and Australia for the analysis of metallurgical
samples.

Samples are prepared and analysed using 100g 4-Acid digest ICP with MS finish
for 48 elements on a 0.25g aliquot (ME-MS61). Laboratory performance is
routinely monitored using umpire assays, check batches and inter-laboratory
comparisons between ALS certified laboratory in Lima and the ACME certified
laboratory in Cuenca, Ecuador.

In order to monitor the ongoing quality of its analytical database, SolGold's
QA/QC protocol encompasses standard sampling methodologies, including the
insertion of certified powder blanks, coarse chip blanks, standards, pulp
duplicates and field duplicates. The blanks and standards are Certified
Reference Materials supplied by Ore Research and Exploration, Australia.

SolGold's QA/QC protocol also monitors the ongoing quality of its analytical
database. The Company's protocol involves Independent data validation of the
digital analytical database including search for sample overlaps, duplicate or
absent samples as well as anomalous assay and survey results. These are
routinely performed ahead of Mineral Resource Estimates and Feasibility
Studies. No material QA/QC issues have been identified with respect to sample
collection, security and assaying.

Reviews of the sample preparation, chain of custody, data security procedures
and assaying methods used by SolGold confirm that they are consistent with
industry best practices and all results stated in this announcement have
passed SolGold's QA/QC protocol.

The data aggregation method for calculating Copper Equivalent (CuEq) for
down-hole drilling intercepts and rock-saw channel sampling intervals are
reported using copper equivalent (CuEq) cut-off grades with up to 10m internal
dilution, excluding bridging to a single sample and with minimum intersection
length of 50m.

Alpala Copper Equivalency (CuEq) was calculated (assuming 100% recovery of
copper and gold) using a Gold Conversion Factor of 0.613 (CuEq = Cu + Au x
0.613), calculated from a nominal copper price of US$3.40/lb and a gold price
of US$1,400/oz.

TAM open pittable and underground resources were estimated using a Copper
Equivalency (CuEq) calculated from estimated costs, including mining,
processing and general and administration (G&A), whereby Net Smelter
Return (NSR) includes metallurgical recoveries and off-site realisation (TCRC)
including royalties, and utilising the updated nominal copper price of
US$3.30/lb and a gold price of US$1,700/oz to produce a Gold Conversion Factor
of 0.632 (CuEq = Cu + Au x 0.632) for open pittable resources and 0.654 (CuEq
= Cu + Au x 0.654) for underground resources.

 

See www.solgold.com.au (http://www.solgold.com.au) for more information.
Follow us on twitter @SolGold plc

 

CAUTIONARY NOTICE

News releases, presentations and public commentary made by SolGold plc (the
"Company") and its Officers may contain certain statements and expressions of
belief, expectation or opinion which are forward looking statements, and which
relate, inter alia, to interpretations of exploration results to date and the
Company's proposed strategy, plans and objectives or to the expectations or
intentions of the Company's Directors, including the plan for developing the
Project currently being studied as well as the expectations of the Company as
to the forward price of copper.  Such forward-looking and interpretative
statements involve known and unknown risks, uncertainties and other important
factors beyond the control of the Company that could cause the actual
performance or achievements of the Company to be materially different from
such interpretations and forward-looking statements.

Accordingly, the reader should not rely on any interpretations or
forward-looking statements; and save as required by the exchange rules of the
TSX and LSE or by applicable laws, the Company does not accept any obligation
to disseminate any updates or revisions to such interpretations or
forward-looking statements.  The Company may reinterpret results to date as
the status of its assets and projects changes with time expenditure, metals
prices and other affecting circumstances.

This release may contain "forward‑looking information" within the meaning of
applicable Canadian securities legislation.  Forward‑looking information
includes, but is not limited to, statements regarding the Company's plans for
developing its properties.  Generally, forward‑looking information can be
identified by the use of forward-looking terminology such as "plans",
"expects" or "does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not anticipate",
or "believes", or variations of such words and phrases or state that certain
actions, events or results "may", "could", "would", "might" or "will be
taken", "occur" or "be achieved".

Forward‑looking information is subject to known and unknown risks,
uncertainties and other factors that may cause the actual results, level of
activity, performance or achievements of the Company to be materially
different from those expressed or implied by such forward‑looking
information, including but not limited to: transaction risks; general
business, economic, competitive, political and social uncertainties; future
prices of mineral prices; accidents, labour disputes and shortages and other
risks of the mining industry.  Although the Company has attempted to identify
important factors that could cause actual results to differ materially from
those contained in forward-looking information, there may be other factors
that cause results not to be as anticipated, estimated or intended.  There
can be no assurance that such information will prove to be accurate, as actual
results and future events could differ materially from those anticipated in
such statements.  Factors that could cause actual results to differ
materially from such  forward-looking information include, but are not
limited to, risks relating to the ability of exploration activities (including
assay results) to accurately predict mineralization; errors in management's
geological modelling and/or mine development plan; capital and operating costs
varying significantly from estimates; the preliminary nature of visual
assessments; delays in obtaining or failures to obtain required governmental,
environmental or other required approvals; uncertainties relating to the
availability and costs of financing needed in the future; changes in equity
markets; inflation; the global economic climate; fluctuations in commodity
prices; the ability of the Company to complete further exploration activities,
including drilling; delays in the development of projects; environmental
risks; community and non-governmental actions; other risks involved in the
mineral exploration and development industry; the ability of the Company to
retain its key management employees and skilled and experienced personnel; and
those risks set out in the Company's public documents filed on SEDAR at
www.sedar.com (http://www.sedar.com) .  Accordingly, readers should not place
undue reliance on forward‑looking information. The Company does not
undertake to update any forward-looking information, except in accordance with
applicable securities laws.

The Company and its officers do not endorse, or reject or otherwise comment on
the conclusions, interpretations or views expressed in press articles or
third-party analysis, and where possible aims to circulate all available
material on its website.

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