Mr. Nick Mather reports
CASCABEL EXPLORATION UPDATE
ALPALA DEPOSIT GROWING WITH EXTENSIONS TO RICHER
CORE ZONES AS DRILLING PROGRESSES BEYOND 120,000 m TARGET
The board of Solgold PLC has provided an update on the drilling
programs at Alpala and Aguinaga at the company's Cascabel project in northern Ecuador.
Infill drilling at Alpala Central continues to upgrade the high-grade zone of mineralization,
where early-stage copper- and gold-rich intrusions appear on drill evidence to be more
continuous than previously modelled;
- Extension drilling at Alpala Central continues to deepen, and management believes is
suggestive of, an extension to the high-grade resource along the lower and northeast margins
of the deposit;
- Extension drilling at Alpala Central continues to intersect shallow high-grade mineralization
above the existing resource limits, along the southwest margin of the deposit, in a large lobe
of early diorite intrusion hosting high-grade mineralization to within 450 metres of surface,
approximately 250 m closer to surface than previously modelled;
- Extension drilling at Alpala Northwest and Alpala Southeast also continues to enlarge the
- Exploration drilling at Trivinio reveals a new potential for significant north extensions to the
Aguinaga drilling is progressing with hole 7 under way, as Solgold continues drill testing
Commenting on today's update, chief executive officer Nick Mather said: "We are very pleased with the rate of drilling
completed at Cascabel so far this year. We continue to observe extensive potential resource growth
outside current inferred and indicated resource blocks at Alpala. We expect to deliver a substantial
conversion of previously estimated resource categories to higher grades as drill hole density increases
throughout the deposit area, as well as a significant increase to the resource estimate of the high-grade core at Alpala. A further 70,000 m of drilling has been completed since the development of the
MRE in December, 2017, and significant resource growth is expected in a revised MRE."
The Cascabel project is located on the northern section of the prolific Andean copper belt, renowned
as the base for nearly half of the world's copper production. The project area hosts mineralization 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 in northern Ecuador, an approximately three-hour
drive north of 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-per-cent interest in ENSA (Exploraciones Novomining SA) which holds 100 per cent of the
Cascabel tenement covering approximately 50 square kilometres.
Approximately 124,000 m of diamond drilling have been completed to date on the Cascabel project.
Currently, 12 drill rigs are active on site, with 10 rigs drilling on the Alpala cluster and two rigs
drilling at the Aguinaga prospect. The Cascabel drill program is currently focused on
extending and infilling the Alpala resource, as well as the further drill testing of the rapidly evolving
Aguinaga prospect. Drill testing of the Trivinio target has commenced, whilst numerous other untested
targets at Moran, Cristal, TandayamaAmerica and Chinambicito are flagged for drill testing as overall
program demands allow.
Alpala targeted resource additions and conversions
Assay results from the initial 53,616 m of drilling at Alpala were incorporated into the Alpala maiden
mineral resource estimate (MRE) completed in December, 2017, and announced on Jan. 3, 2018. A
further 70,000 m of drilling have been completed since the development of the MRE, and significant
resource growth is expected in a revised MRE.
Solgold geologists continue to observe extensive potential resource growth outside the current
inferred and indicated resource blocks at Alpala, and expect substantial conversion of previously
estimated resource categories to higher grades as drill hole density continues to increase throughout
the deposit area.
The recent and continuing drilling at Alpala Central is also predicted to significantly increase the resource
estimate of the high-grade core at Alpala. Infill drilling at Alpala Central is expected to upgrade the
high-grade resource, where early-stage copper- and gold-rich intrusions appear on drill evidence to be
more continuous than previously modelled. For example, hole 55R intersected over 1,000 m of intense
and highly visible copper sulphide mineralization, including chalcopyrite, and hole 57 has thus far
intersected over 720 m of very strong highly visible copper sulphide mineralization, including
Extension drilling at Alpala Central continues to deepen and extend high-grade intersections along the
lower and northeast margins of the deposit, whilst drilling at Alpala Northwest and Alpala Southeast
continues to expand the Alpala deposit. For example, hole 41D1D2 has thus far intersected over
300 m of intense visible copper sulphide mineralization, including chalcopyrite. Hole 41D1D1
(abandoned prematurely due to drilling difficulties) assay results returned 431 m at 0.56 per cent copper equivalent, open
at depth (including 247 m at 0.65 per cent CuEq, and 93 m at 0.71 per cent CuEq).
Extension drilling at Alpala Central continues to intersect shallow high-grade mineralization above the
existing resource limits, along the southwest margin of the deposit, in a large lobe of early diorite
intrusion hosting high-grade mineralization to within 450 m of surface, approximately 250 m closer to
surface than previously modelled. For example, hole 60 has thus far intersected over 110 m of intense
visible copper sulphide mineralization, including chalcopyrite. Hole 51 final assay results returned
476 m at 0.75 per cent CuEq (including 194 m at 1.28 per cent CuEq and 52 m at 3.51 per cent CuEq).
Extension drilling at Alpala Northwest and Alpala Southeast also continues to enlarge the Alpala
deposit. For example, hole 49 final assay results returned 444 m at 0.83 per cent CuEq (including 268 m at 1.12 per cent
CuEq and 120 m at 1.57 per cent CuEq) and hole 53 has intersected over 400 m of visible copper mineralization
and over 190 m of strong highly visible copper mineralization.
Exploration drilling at Trivinio prospect recently revealed a new potential for major north extensions to
the Alpala deposit. Final assays from the tail of hole 49 returned 292 m at 0.6 per cent CuEq (including 174 m at
0.71 per cent CuEq).
Highlights from recent visual inspections of drill core and assayed drilling results at Alpala include:
- Hole 55R (Alpala Central): over 1,000 m of intense highly visible copper sulphide mineralization,
- Hole 57 (Alpala Central): over 720 m of strong highly visible copper sulphide mineralization,
including chalcopyrite (drilling continues);
- Hole 41D1D1 (Alpala Central): 431 m at 0.56 per cent CuEq including 247 m at 0.65 per cent CuEq, and 93 m at
0.71 per cent CuEq (open at depth);
- Hole 41D1D2 (Alpala Central): over 300 m of intense visible copper sulphide mineralization,
including chalcopyrite (drilling continues);
- Hole 42D2 (Alpala Central): 240 m at 0.90 per cent CuEq (including 52 m at 1.63 per cent CuEq);
- Hole 60 (Alpala Central): over 110 m of intense visible copper sulphide mineralization, including
- Hole 51 (Alpala Central): 1,046 m at 0.48 per cent CuEq (including 476 m at 0.75 per cent CuEq, 194 m at 1.28 per cent CuEq
and 52 m at 3.51 per cent CuEq);
Hole 52 (Alpala Central): 202 m at 0.44 per cent CuEq (including 106 m at 0.67 per cent CuEq);
- Hole 49 (Alpala Northwest): 444 m at 0.83 per cent CuEq (including 268 m at 1.12 per cent CuEq and 120 m at
1.57 per cent CuEq);
- Hole 53 (Alpala Southeast): over 400 m of visible copper mineralization, and over 190 m of strong
highly visible copper mineralization;
- Hole 49 tail (Trivinio): returned 292 m at 0.6 per cent CuEq (including 174 m at 0.71 per cent CuEq).
Drill hole assays have been received for over 97,000 metres of drilling to date, whilst over 26,500 m
of drilling have assays pending. Recent construction of an in-country certified preparation facility by ALS
Global is expediting assay turnaround. Final assay results for all drilling to date at Cascabel have come
from ALS Laboratories in Lima, Peru.
Quality assurance/quality control protocols in place at Solgold's Cascabel project are in accordance with the National Instrument
43-101 guidelines. Solgold conducts routine database validation and validation of sample results from
drilling using certified reference material (CRM), blanks and duplicate samples. SRK has assessed these
results and is of the opinion that assay data for the drilling and sampling have appropriate accuracy and
precision. The sample preparation and analysis of drill core and channel samples collected during the
company's drilling and exploration program have been reviewed independently by SRK Exploration. The
review of sample preparation, sample and data security procedures, and assaying employed, SRK is of
the opinion that they are consistent with industry-best practices and are suitable for use in a mineral
Aguinaga drilling program
Aguinaga drilling is progressing with hole 7 under way, as Solgold continues drill testing the five targets
identified at Aguinaga. The drilling program at Aguinaga is only in initial stages. Drilling thus far has
intersected mineralized host rock, intramineral dikes, and late dikes and breccias and the source
mineralizing intrusion has yet to be encountered.
The mineralization intersected in drilling at Aguinaga thus far has similarities to that discovered at
surface in rock saw channel samples that returned an open-ended, rock saw channel sample result of
nine m at 1.51 per cent CuEq (1.01 per cent Cu, 0.79 g/t Au).
Solgold geologists believe that the initial drilling at Aguinaga confirms the potential for a second large
porphyry deposit at Cascabel, thus far demonstrating a vertical column to the mineralizing system of
more than 600 m, and a width of approximately 320 m.
Highlights from assayed drilling results thus far at Aguinaga include:
- Hole 1 (Aguinaga): 218 m at 0.45 per cent CuEq (including 122 m at 0.52 per cent CuEq);
- Hole 2 (Aguinaga): 172 m at 0.42 per cent CuEq (including 46 m at 0.63 per cent CuEq).
Market abuse regulation (MAR) disclosure
Certain information contained in this announcement would have been deemed inside information for
the purposes of Article 7 of the regulation (EU) No. 596/2014 until the release of this announcement.
Information in this report relating to the exploration results is based on data reviewed by Jason
Ward ((CP) BSc, Geol), exploration manager, global, of the company. Mr. Ward is a member of the
Australasian Institute of Mining and Metallurgy, holds the designation MAusIMM (CP), and has in excess
of 20 years of experience in mineral exploration and is a qualified person for the purposes of the relevant
London Stock Exchange and Toronto Stock Exchange rules. Mr. Ward consents to the inclusion of the information in the form and context in
which it appears.
Notes to editors
Solgold is a Brisbane, Australia-based dual London Stock Exchange- and TSX-listed (SOLG on both exchanges) copper gold
exploration and future development company with assets in Ecuador, Solomon Islands and
Australia. Solgold's primary objective is to discover and define world-class copper-gold deposits. The
board and management team have substantial vested interests in the success of the company as
shareholders as well as strong records in the areas of exploration, mine appraisal and
development, investment, finance, and law. Solgold's experience is augmented by state-of-the-art
geophysical and modelling techniques, and the guidance of porphyry copper and gold expert Dr. Steve
In October, 2017, at the Mines and Money Americas Conference in Toronto, Solgold's Mr. Mather
won the award for the CEO of the Year, Exploration, Latin America. Solgold won the Exploration
Award for Latin America and Ecuador won the Country Award for Latin America. Each party then duly
won the 2017 award for each respective category on a global basis at London Mines and Money on Nov. 30, 2017.
The company announced $54-million (U.S.) in capital raisings in September, 2016, involving Maxit Capital LP,
Newcrest International Ltd. and DGR Global Ltd., and a $41.2-million (U.S.) raising in June of 2017 largely from
Newcrest International with $1.2-million (U.S.) raised from Ecuadorean investors. All of these raisings were
undertaken at substantial premiums to previous raisings. In November, 2017, Solgold raised a further
45 million pounds sterling at 25 pence per share, placed with institutions and Newcrest pursuant to their anti-dilution
rights. Solgold currently has circa $80-million (U.S.) in available cash to continue the exploration and appraisal
of its flagship Cascabel project, and with which to conduct regional exploration programs on its 73 other
100-per-cent-owned projects in its wholly owned subsidiary companies.
Craig Jones joined the Solgold board on March 3, 2017, nominated to the board of Solgold by
Newcrest Mining, now a 14.54-per-cent shareholder in Solgold. Mr. Jones is a mechanical engineer and is
currently the executive general manager of WafiGolpu (NewcrestHarmony joint venture). He has held
various senior management and executive roles within the Newcrest Group, including general manager
of projects, general manager, Cadia Valley operations, executive general manager, projects and asset
management, executive general manager, Australian and Indonesian operations, executive general
manager, Australian operations and projects, and executive general manager, Cadia and Morobe
Mining joint venture. Prior to joining Newcrest, Mr. Jones worked for Rio Tinto.
Cascabel, Solgold's 85-per-cent-owned world-class flagship
coppergold porphyry project, is located in northern Ecuador on the underexplored northern section
of the richly endowed Andean copper belt. Having fulfilled its earn-in requirements, Solgold is a
registered shareholder with an unencumbered legal and beneficial 85-per-cent interest in ENSA (Exploraciones
Novomining SA) and approximately 5 per cent of TSX Venture Exchange-listed Cornerstone Capital Resources, which holds the remaining 15 per cent of ENSA, the Ecuadorian registered company which
holds 100 per cent of the Cascabel concession. Subject to the terms of existing agreements, Cornerstone is
debt financed by Solgold for its share of costs to completion of a feasibility study.
In terms of repayment, Solgold shall receive 90 per cent of Cornerstone's share of earnings or dividends from
ENSA or the tenement to which Cornerstone would otherwise be entitled until such time as the
amounts so received equal the aggregate amount of expenditures incurred by Solgold that would have
otherwise been payable by Cornerstone, plus interest thereon from the dates such expenditures were
incurred at a rate per annum equal to Intercontinental Exchange London Interbank Offered Rate plus 2 per cent until such time as Solgold is fully
The investments by Newcrest for 14.54 per cent of Solgold endorses Ecuador as an exploration and mining
destination, the management team at Solgold, the dimension, size and scale of the growing Alpala
deposit, and the prospectivity of Cascabel and its multiple targets. The gold endowment, location,
infrastructure and logistics are important competitive advantages offered by the project. Cascabel is
characterized by 15 identified targets, world-class drilling intersections over one kilometre in length
at potentially economic grades, and high copper and gold grades in richer sections, as well as logistic
advantages in location, elevation, water supply, proximity to roads, port and power services; and a
progressive legislative approach to resource development in Ecuador.
To date, Solgold has completed geological mapping, soil sampling, rock saw channel sampling,
geochemical and spectral alteration mapping over 25 square kilometres, along with an additional nine square kilometres of induced
polarization, and 14-square-kilometre Magnetotelluric "Orion" surveys over the Alpala cluster and other targets at
Aguinaga, Parambas, TandayamaAmerica, Moran and Chinambicito.
Solgold has completed approximately 124,000 m of drilling and expended over $110-million (U.S.) in Ecuador,
which includes Cascabel exploration, regional exploration, corporate costs and investments into
Cornerstone. This has been accomplished with a work force of up to 260 Ecuadorean workers and
geoscientists, and six expatriate Australian geoscientists. The results of all holes drilled and assayed to
date have produced some of the greatest drill hole intercepts in porphyry copper-gold exploration
history, as indicated by hole 12 (CSD16012) returning 1,560 m grading 0.59 per cent copper and 0.54 g/t gold
including, 1,044 m grading 0.74 per cent copper and 0.54 g/t gold. Intensive diamond drilling is planned for the
next 12 months with up to 12 drill rigs operational.
Solgold has drill tested nine of 15 copper-gold targets delineated in the 50-square-kilometre tenement with a focus on
Alpala and Aguinaga.
The company and its external consultants prepared an initial mineral resource estimate at the Cascabel
project in December, 2017. The
mineral resource estimate was completed from 53,616 m of drilling in mid-December 2017, the cut-off
date for the maiden resource calculation. The company has now drilled approximately 124,000 m as at the date of this announcement. There remains strong potential for further growth from
more recent drilling results, and continued rapid growth of the deposit.
The company is currently planning further metallurgical testing and completion of an independent
preliminary economic assessment and prefeasibility studies at Cascabel. Solgold is investigating both
high-tonnage open-cut and underground block caving operations, as well as a high-grade/low-tonnage
initial underground development toward the economic development of the copper-gold deposit(s) at
Drill hole intercepts have been updated to reflect current commodity prices using a data aggregation
method defined by copper-equivalent cut-off grades and reported with up to 10 m internal dilution,
excluding bridging to a single sample. Copper-equivalent grades are calculated using a gold conversion
factor of 0.63, determined using an updated copper price of $3 (U.S.)/pound and an updated gold price
of $1,300 (U.S.)/ounce. True widths of downhole intersections are estimated to be approximately 2,550 per cent.
Following a comprehensive review of the geology and prospectivity of Ecuador, Solgold and its
subsidiaries have several applications for additional exploration licences in Ecuador over a number of
promising porphyry copper gold targets throughout the country.
Solgold, through its four subsidiary companies, has 100-per-cent ownership of extensive concession areas
throughout Ecuador. Each subsidiary company has technical teams led by experienced senior
geologists on the ground, prospecting granted tenements and collecting baseline data, whilst regional
geophysics surveys are being planned. Significant copper occurrences have been identified at
numerous projects to date, including La Hueca, Machos, Rio Armarillo, Sharug, Porvenir and Timbara.
In Queensland, Australia, the company is evaluating the future exploration plans for the Mt. Perry,
Rannes and Normanby projects, with drill testing of the Normanby project planned for the coming
quarter. Joint venture agreements are being investigated for a joint venture partner to commit funds
and carry out exploration to earn an interest in the tenements.
Solgold retains interests in its original theatre of operations, Solomon Islands in the southwest Pacific,
where the Kuma prospect on the island of Guadalcanal exhibits surface lithocap characteristics which
are traditionally indicative of a large metal-rich copper gold intrusive porphyry system.
Solgold intends to apply its intellectual property and experience developed at Cascabel to target
additional world-class copper-gold porphyries within Ecuador and at Kuma in the Solomon Islands.
Solgold is based in Brisbane, Queensland, Australia. The company is listed on the LSE and TSX, with
both exchanges using the ticker code: SOLG.
We seek Safe Harbor.
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