Source - RNS
RNS Number : 8476M
SolGold PLC
18 October 2016

18 October 2016


SolGold plc

("SolGold" or the "Company")


New Drilling Contracts Signed for Cascabel to Underpin Aggressive Four Year Exploration and Appraisal Program.

Drilling Underway.


The Board of Directors of SolGold is pleased to advise that drilling at the Cascabel project is currently underway.  New drilling contracts have been signed and completed for the Company to underpin an aggressive exploration and appraisal program at Cascabel. 




Ø New drilling contracts signed with Hubbard Drilling and Major Drilling for Cascabel exploration appraisal and feasibility programs over the next four years.


Ø Drilling commenced with three rigs on site and a fourth to commence by end of February 2017.  Initial holes CSD-16-018, 019 and 020, will test the deep rich portions of the Alpala Central deposit.


Ø Major drilling track mounted rigs to focus on extension of the Alpala deposit, and are expected to bear the brunt of deep drilling with higher penetration rates, faster access and rig moves between holes.


Ø Major drilling rigs expected to drill to 2,800 metres deep, testing the Alpala deposit a further kilometre below the deepest known mineralisation in the thickest, richest part of the deposit.


Ø Directional drilling equipment under negotiation to effect fewer drilling metres overall, but more drill metres within the deposit itself.


Ø Hubbard Drilling man-portable rigs will be free to test six other defined and priority targets at Moran, Trivinio, Aguinaga, Tandayama - America, Alpala South East and Hematite Hill.


Ø Reduction in drilling costs from previous $670/metre to $370/metre forecast (all-in field and fixed program costs excluding corporate overheads).


Ø Twelve month drill program for 36,000 metres with up to six rigs.  Two year program to end October 2018 for a total of 95,000 metres with up to 10 rigs.






Drilling at Cascabel is underway at initial holes CSD-16-018, 019 and 020 to test deep, rich sections at Alpala Central. 


New drilling contracts have been entered into with both Hubbard Drilling and Major Drilling, underpinning an aggressive exploration and appraisal program which will allow the Company to expand its exploration depths to further test the deepest known mineralisation within the Cascabel concession.


The man portable rigs supplied by Hubbard Drilling and Major Drilling are earmarked to test new drill ready targets at Aguinaga, Moran, Trivinio, Alpala South East, Hematite Hill and Tandayama-America. The new contracts afforded by an increase in the number of rigs and higher efficiencies delivered by improved road access and servicing are expected to reduce overall drill costs including all operational (but not corporate) costs from $670 to $370/metre.


In addition, directional drilling services are currently being negotiated and this is expected to deliver multiple daughter drill holes from each parent hole, facilitating increased frequency of mineralised intercepts, within the Alpala deposit.


SolGold's planned resource statement at Alpala (the most advanced target at Cascabel) has been delayed by the discovery of high-grade mineralisation in Holes 15R2, 16 and 17 at Alpala, extending the immediate resource potential.  The Alpala deposit is open at depth and in the upper extensions, as well as to the north, north-east, south-east and south-west.  This will initially be achieved from intersections targeted in holes 018, 019, 020 which have commenced at Alpala and are targeting lower extensions of the Alpala deposit in the bornite bearing wide centre sections.


A planned 36,000 metre program is envisaged with up to six rigs, including four Major Drilling rigs, in the next 12 months.  Three of these will be track mounted Major-50 rigs with a drill rate of over 40m/per day and depth comparability of 2,800m.  The new Santa Cecila-Carmen Road will provide access to multi-hole pads for the Major-50 rigs and facilitate higher tonnage supplies in, and core out, at a faster rate.  SolGold's geological and logistics team has been boosted to facilitate the increase in drill intensity.


By end of October 2018, SolGold estimates the completion of 95,000m of drilling including testing the targets at Moran, Aguinaga, Trivinio, Alpala South East, Tandayama-America and Hematite Hill.  Ongoing field mapping, sampling and ground magnetics continues to mature these targets and define proposed drill locations.


The coming two year program, with the use of directional diamond drilling techniques, represents approximately four times the drilling metres completed to date at the Alpala deposit drilled over the past four years.  The program will include six additional drill-ready targets.


Commenting on the development, CEO Mr Nick Mather said:

"We are very pleased to have the combined benefits of significant experience at Cascabel from Hubbard Drilling, and the global back-up and capability of Major Drilling.  Hubbard Drilling's performance to date at Cascabel has been impressive, drilling holes to a depth of approximately 2000 metres with a man portable rig.  With a new access road we are now able to get heavier supply loads to, and more core samples out of, site quicker and more safely.  Hubbard Drilling set the depth record at Cascabel, and we hope that Major Drilling can set the speed record.  To date we've not had a lost time injury, and we will strive to continue setting the highest standards in safety."






The Cascabel Project is located in Northern Ecuador, within the northern portion of the Andean copper belt, renowned as the host of 48% of the World's copper production, and numerous Tier 1 global resource assets.


The Directors of SolGold advise that recent geological and geochemical field work in conjunction with updated three dimensional MVI magnetic modelling has now defined fourteen copper-gold porphyry targets within the Cascabel project area in Northern Ecuador.  Proximity to, and geologic similarity with, the growing Alpala porphyry copper-gold deposit suggests that these satellite targets within the Cascabel tenement will yield similar deposits to Alpala Central, the only target drilled to date.  


By order of the Board

Karl Schlobohm

Company Secretary


Qualified Person:


Information in this report relating to the exploration results is based on data reviewed by Mr Nicholas Mather (B.Sc. Hons Geol.), the Chief Executive Officer of the Company.  Mr Mather is a Fellow of the Australasian Institute of Mining and Metallurgy who has in excess of 30 years' experience in mineral exploration and is a Qualified Person under the AIM Rules.  Mr Mather consents to the inclusion of the information in the form and context in which it appears.



Mr Nicholas Mather                                                                                       Tel: +61 (0) 7 3303 0665

SolGold Plc (Executive Director)                                                                                       +61 (0) 417 880 448

[email protected].au


Mr Karl Schlobohm                                                                                         Tel: +61 (0) 7 3303 0661

SolGold Plc (Company Secretary)

[email protected]


Mr Ewan Leggat / Mr Richard Morrison                                                 Tel: +44 (0) 20 3470 0470

SP Angel Corporate Finance LLP (NOMAD and Broker)

[email protected]


Follow us on twitter @SolGold_plc


Figure 1: Location of Cascabel project in northern Ecuador.


Figure 2: Regional Setting of the Cascabel Project, in the northern Andean Copper Belt.





SolGold is a Brisbane, Australia based, AIM‐listed (SOLG) copper gold exploration and development company with assets in Ecuador, the Solomon Islands and Australia.  The Company's primary objective is to discover and define world‐class copper‐gold deposits.  SolGold's Board and Management Team have substantial vested interests in the success of Company, as well as strong track records in the areas of exploration, mine development, investment, finance and law.  SolGold's experience is augmented by state of the art geophysical and modelling techniques and the guidance of Newmont trained porphyry expert Dr Steve Garwin.


From a corporate perspective, SolGold has recently announced capital raisings involving Maxit Capital LP and Newcrest International Ltd, both undertaken at substantial premiums to previous raisings.  Once completed, SolGold will have raised USD48 million in funding to continue the exploration and development of its flagship Cascabel Project.  Also as a result of these raisings, Mr Scott Caldwell (CEO of TSX-listed Guyana Goldfields Inc) joined the SolGold Board on 9 September 2016.  Mr Caldwell is a mining engineer with over 30 years of experience building and operating gold and base metal mines worldwide, including USA, Canada, Russia, Zimbabwe, Chile and Indonesia.


Cascabel, the Company's world class flagship copper‐gold porphyry project, is located in North West Ecuador on the under‐explored northern section of the richly endowed Andean Copper Belt.  SolGold owns 85% of Exploraciones Novomining S.A. ("ENSA") and approximately 11% of TSX‐V‐listed Cornerstone Capital Resources, which holds the remaining 15% of ENSA, the Ecuadorian registered company which holds 100% of the Cascabel concession.


To date SolGold has completed geological mapping and soil sampling over 25km2, along with 23km2 of Induced Polarisation Magnetotelluric "Orion" surveys over the Alpala cluster and Aguinaga targets.  By September 2016, the Company had also completed approximately 23,700m of drilling and expended a total of approximately USD35m on the program, corporate costs and investments into Cornerstone.  Intense diamond drilling is planned for the next 12 months with multiple drill rigs.


Cascabel is characterised by fourteen (14) identified targets, world class drilling intersections over in length, and high copper and gold grades, 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 drill tested only one of the 14 targets, being Alpala with 23,700m of drilling, over 18 holes, 16 of which have intersected the deposit and of these, four have delivered world class intersections, each over 1km in length.


SolGold's planned resource statement at Alpala (the most advanced target at Cascabel) has been delayed by the discovery of high-grade mineralisation in Holes 15R2, 16 and 17 at Alpala, extending the immediate resource potential.  The Alpala deposit is open at depth and in the upper extensions, as well as to the north, north-east, south-east and south-west.  The mineralised zone at Alpala and Moran is closely modelled by magnetic signatures and currently encompasses over 10Bt of magnetic rock expected to be mineralised with copper and gold.


SolGold will drill test other key targets within the Cascabel concession at Aguinaga, Trivino, Moran, Alpala Northwest, Hematite Hill, Alpala Southeast, Cristal, Parambas, Carmen Tandayama-America and Chinambicito.  The Company is planning further metallurgical testing and completion of a conceptual early stage mine and plant design and a scoping study for an economic development at Cascabel.  SolGold is investigating both high tonnage / low-medium grade open cut and underground block caving operations, and a high grade / low tonnage underground development.




Drill hole intercepts are calculated using a data aggregation method, defined by copper equivalent cut-off grades and reported with up to 10m internal dilution, excluding bridging to a single sample.  Copper equivalent grades are calculated using a gold conversion factor of 0.89, determined using copper price of USD2.20/pound and gold price of USD1350/ounce.


Following a comprehensive review of the geology and prospectivity of Ecuador, SolGold and its subsidiaries have also applied for additional exploration licences in Ecuador over a number of additional promising porphyry copper gold targets elsewhere in the Country.


In Queensland, Australia the Company is evaluating the future exploration plans for the Mt Perry, Rannes and Normanby projects.  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, the Solomon Islands in the South West Pacific, where the 100% owned, as yet undrilled, Kuma prospect exhibits surface geological characteristics which are traditionally indicative of a large metal rich copper gold intrusive porphyry system.  SolGold intends in the future to apply intellectual property and experience developed in Ecuador to target additional world class copper gold porphyries at Kuma and other targets in Ecuador and Argentina.


SolGold is based in Brisbane, Queensland, Australia.  The Company listed on London's AIM Market in 2006, under the AIM code 'SOLG' and currently has a total of 1,428,966,605 ordinary shares issued, together with 11,975,884 options exercisable at 28p and 14,975,884 options exercisable at 14p.




The news release may contain certain statements and expressions of belief, expectation or opinion which are forward looking statements, and which relate, inter alia, to the Company's proposed strategy, plans and objectives or to the expectations or intentions of the Company's directors. Such forward-looking 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 forward-looking statements. Accordingly, you should not rely on any forward-looking statements and save as required by the AIM Rules for Companies or by law, the Company does not accept any obligation to disseminate any updates or revisions to such forward-looking statements.


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