Regional Exploration Update - Porvenir ProjectSource: RNS
13 October 2020
("SolGold" or the "Company")
First Drill Hole at Porvenir Intersects 893m of Visible Porphyry Mineralisation.
Second Hole Commenced Closer to Interpreted Core of System.
The Board of SolGold (LSE & TSX: SOLG) is pleased to provide an update on the Porvenir Project, held by Green Rock Resources S.A, a 100% owned and unencumbered subsidiary of SolGold.
Ø PDH-20-001, the first drill hole at the Porvenir Project, at Cacharposa was completed at 909.3m depth, having intersected 893.4m of visual chalcopyrite mineralisation from 15.9m depth, including chalcopyrite percentages of up to an estimated 6.0 % by volume with associated porphyry style total quartz vein abundance of up to a measured 11.7 % by volume. Pyrite and molybdenite mineralisation are also common.
Ø PDH-20-001 tested the eastern limits of the Cacharposa porphyry system and was terminated in weak- to moderate-mineralisation. SolGold geologists interpret that the hole passed across the upper periphery of the core of a large, strongly mineralised porphyry copper-gold system.
Ø PDH-20-002, the second hole at the Porvenir Project, commenced 12 October and is at current depth of 3.0m. PDH-20-002 is being drilled from the same location as PDH-20-001 at a steeper angle of -75 degrees towards the same direction, and is targeted to more fully transect the interpreted core of the system (Figure 2).
Ø The visual estimates of chalcopyrite in PDH-20-001 support a lower probability contour of the 3D geochemical model, and this application now supports the geochemical footprint width of 1000m, and indicates an updated scope for depth continuation of mineralisation of approximately 1000m (Figure 2).
Ø A second drill rig is planned to be mobilised to Cacharposa Creek later this month, and sited approximately 200m west-northwest of PDH-20-001 with a view to test the central and western portions of the system including the potential root of the core of the system, which extends deeper than 1000m as indicated by 3D geochemical modelling.
Ø Mineralisation in Cacharposa Creek is part of a 1700m long northerly-trending mineralised corridor, up to 1000m wide. The mineralisation styles, size and geometry at Cacharposa are consistent with the surface exposure of a vertically extensive, well-preserved porphyry copper-gold system.
Ø Due to highly encouraging visual estimates and a strong correlation between mineralisation, hydrothermal alteration and magnetic susceptibility measurements from the first hole Cacharposa (PDH-20-001) there is growing potential for a large, strongly mineralised porphyry copper-gold system at Cacharposa, SolGold is planning a larger revised 50,000m drilling program.
References to figures relate to the version visible in PDF format by clicking the link below:
Benn Whistler, Technical Services Manager of SolGold said of the mineralisation discovered so far at Cacharposa:
"PDH-20-001 was terminated within weak- to moderate-mineralisation at 909.3m depth. The continuation of visible chalcopyrite mineralisation in the outer (propylitic) zones demonstrate the strong character of the system. Revision of 3D geochemical probability models against down-hole data collected in PDH-20-001, show the potential scope of mineralisation at Cacharposa now covers a footprint area 1.7km long by 1km wide with a modelled root of over 1km deep. Rig 1 has now commenced the second hole, PDH-20-002, and we expect this hole to intersect even longer and stronger mineralisation than the first. Rig 2 is planned to arrive late October, with Rigs 3 and 4 expected to be mobilised from Hubbard Perforaciones Cuenca workshops in November, ahead of Rigs 5 and 6."
Nick Mather, CEO of SolGold, commented on Porvenir and the implementation of SolGold's broader regional exploration strategy:
"The mineral zonation and close correlation between chalcopyrite and magnetite is giving us a lot of confidence in the model and our drillhole target strategy at Porvenir. More broadly, across SolGold's 14 exploration Targets in Ecuador, its increasingly obvious that the gross controls to orebody emplacement in the Ecuadorean sector if the Andean Copper Belt replicate. SolGold's blueprint is rapidly refining in its application to our social, environmental, regulatory and operating processes and SolGold's geological understanding. The cost and time savings and efficiencies Solgold will enjoy as we replicate discoveries are immense. It goes to rapid growth and value creation for SolGold shareholders and Ecuador."
SolGold is continuing to pursue its strategy to become a tier 1 copper producing company through aggressive exploration of its extensive tenement portfolio in Ecuador. The first pass regional exploration program is fully funded until mid- to late-2021.
The Porvenir Project is in Southern Ecuador, some 100 km north of the Peruvian border (Figure 1). The project is situated within the eastern most metallogenic portion of the Ecuadorian sector of the Andean Copper Belt which hosts several of the world's largest and most significant copper and gold deposits in Columbia, Ecuador, Peru, Argentina and Chile, including the Fruta Del Norte gold project owned by Lundin Gold, approximately 100km to the north-northeast.
Drilling commenced at the Cacharposa Target (Cacharposa), within the Porvenir Project area on 15th September 2020 as part of a revised 50,000m drilling program at Porvenir.
PDH-20-001, the first drill hole on the Porvenir Project, at Cacharposa was completed at 909.3m depth, having intersected 893.4m of visual chalcopyrite mineralisation from 15.9m depth, including chalcopyrite percentages of up to an estimated 6.0 % by volume with associated porphyry style total quartz vein abundance of up to a measured 11.7 % by volume.
Visible copper sulphide mineralisation was observed in PDH-20-001 from 15.9m to 909.3m. The dominant copper sulphide mineral observed was chalcopyrite, an important ore-forming copper sulphide mineral containing 34.5% copper. Pyrite and molybdenite are also common. Molybdenite is particularly common in the last 200m of PDH-20-001 and supports alteration indicators that suggest the hole passed into the periphery of a mineralised porphyry copper-gold(-molybdenum) deposit.
Detailed core logging, from the last reported logged depth of 619.0m, to a current logged depth of 909.0m, shows chalcopyrite percentages of up to an estimated 2.6 % by volume with associated porphyry style total quartz vein abundance of up to a measured 5.7 % by volume.
PDH-20-001 tested the eastern limits of the Cacharposa porphyry system and SolGold geologists interpret that the hole passed across the upper periphery of the core of a large, strongly mineralised porphyry copper-gold system. PDH-20-001 passed beneath outcropping surface mineralisation in Cacharposa Creek that returned an open-ended rock-saw channel assay result of 147.8m @ 0.69% CuEq (0.43 g/t Au, 0.37% Cu) including, 82.63m @ 1.08% CuEq (0.71 g/t Au, 0.55% Cu). The results exhibit an approximate 1:1 copper (%) to gold (g/t) ratio and an approximate 1:1 copper to gold ratio is also expected from drill core assays.
PDH-20-002, the second hole at the Porvenir Project, commenced 12 October and is at current depth of 3.0m. PDH-20-002 is being drilled from the same location as PDH-20-001 at a steeper angle of -75 degrees towards the same direction, and is targeted to more fully transect the core of the system (Figure 2).
The visual estimates of chalcopyrite in PDH-20-001 support a larger, lower probability 3D geochemical model, and this application now supports the geochemical footprint width of 1000m, and indicates an updated scope for depth continuation of mineralisation of approximately 1000m (Figure 2). The geochemical probability limits reflect the probability of finding a Yerington like porphyry centre based on the surface geochemical results at Cacharposa and is based upon modelling work performed by Fathom Geophysics.
SolGold geologists are highly encouraged by the tenor of mineralisation in what is interpreted to represent an intersection peripheral to the centre of a highly mineralised porphyry copper-gold system. Geological and rock-alteration vectors drawn from surface rock-saw and drill core observations, including an increasing chalcopyrite to pyrite ratio with depth beneath the discovery outcrop, suggest that more intense copper mineralisation can be reasonably expected deeper, and in the targeted core of the system.
PDH-20-001 has intersected a number of different mineralised intrusive phases and mineralisation styles, exhibiting a wide range of porphyry style veining. The complex multi-phase nature of mineralisation observed in PDH-20-001 is considered favourable to the development of a significant system.
The Cacharposa target is characterised by coincident Cu, Mo, Au and Cu:Zn soil anomalies that lie central to a magnetic high and zone of Mn-depletion in soil (Figure 3). These styles of ground RTP magnetics and geochemical signatures at Cacharposa are characteristic of porphyry copper and copper-gold deposits globally.
Mineralisation in Cacharposa Creek is part of a 1700m long northerly-trending mineralised corridor, up to 1000m wide. PDH-20-001 was collared in mineralisation and approximately 200m north of the centre of coincident soil gold, copper, molybdenum and Cu:Zn anomalies, drilling at a dip of -55 degrees towards the east-southeast (Figure 3). The mineralisation styles, size and geometry at Cacharposa are consistent with the surface exposure of a vertically extensive, well-preserved porphyry copper-gold system.
Due to the highly encouraging visual estimates from the first hole at Cacharposa (PDH-20-001) and growing potential for a large, strongly mineralised porphyry copper-gold system at Cacharposa, SolGold will plan a larger 50,000m drilling program, subject to ongoing positive results.
A second drill rig is planned to be mobilised to Cacharposa Creek later this month and sited approximately 230m west-northwest of PDH-20-001 with a view to test the central and western portions of the system (Figure 3). Planning and logistical work is underway to ramp up drilling by mobilising an additional five drill rigs to site as quickly as COVID19 restrictions allow. The second drill machine is planned to arrive late October, with another 2 machines expected to be finalised for mobilisation from Hubbard Perforaciones Cuenca workshops in November (Figure 4).
Selected examples of mineralisation encountered in PDH-20-001 so far are shown in Figures 5 and 6.
While visual measurements and observations of drill core are extremely encouraging and SolGold believe provide initial validation of the prospectivity of Cacharposa at Porvenir, readers are strongly cautioned that the information in this press release is of a preliminary nature and the visual mineralization observed has not yet been assayed. The intensity of visual mineralisation should not be used to estimate grade or commercial viability at this stage.
Figure 1: Location plan showing Porvenir Project in Southern Ecuador, highlighting the locations of the Cacharposa and Alpala porphyry deposits.
Figure 2: Cross-section looking north-northeast with window thickness of 100m, showing current and planned drill holes. Mineralisation and hydrothermal alteration intersected in drilling so far shows good correlation between down hole geology and 3D magnetic- and geochemical-models. 3D geochemical models are contours of confidence for a porphyry centre based on the zoning of metals at the Yerington porphyry deposit in Nevada, USA. The visual estimates of chalcopyrite in PDH-20-001 support the larger, lower probability contour.
Figure 3: Cacharposa Mineralised Corridor plan view of the Cacharposa Target (formerly Target 15) showing the zone of interpreted coincident soil gold, copper, molybdenum and Cu:Zn anomalies. The current hole path is shown in black with planned drill hole paths shown in green. Future drill holes, aim to intersect two main northwest and northeast-trending vein sets at Cacharposa, and may exceed the planned lengths should mineralization continue at depth. Additional drill holes to those shown, will be planned to extend mineralisation to the south, north and other directions dependant on drill results.
Figure 4: HP Drilling customised man-portable drill rigs at the HP Drilling workshop facility in Cuenca, Southern Ecuador, as SolGold and HP Drilling work together to expand the fleet of diamond drill rigs for exploratory drilling at SolGold's regional projects.
Figure 4: Selected drill-core examples from 619.0- 740m showing disseminated and vein-controlled chalcopyrite-pyrite mineralisation.
Figure 5: Selected drill-core examples from 740m- 909.0m (EOH)0m showing disseminated and vein-controlled chalcopyrite-pyrite mineralisation.
Figure 7: Ground reduced-to-the-pole (RTP) magnetics and geochemical signatures at Cacharposa are characteristic of global porphyry copper and copper-gold deposits. The RTP magnetics exhibit a central magnetic high surrounded by an annular magnetic low (Top Left). Soil Molybdenum geochemistry shows a broad high nested within the magnetic feature (Top Centre) and exhibits good inverse correlation with soil Manganese (Top Right). The coincidence of soil Copper, Gold and Cu:Zn geochemical anomalies (Bottom Left, Centre and Right) are classic signatures of porphyry copper-gold deposits.
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 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.
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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 the largest and most active concession holder in Ecuador and is aggressively exploring the length and breadth of this highly prospective and gold-rich section of the Andean Copper Belt.
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.
SolGold employs a staff of over 700 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 50km2. 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.
Advancing Alpala towards development
The resource at the Alpala deposit contains a high-grade core which will be targeted to facilitate early cashflows and an accelerated payback of initial capital. SolGold is currently progressing its Pre-Feasibility Study and is fully funded through to development decision following the Net Smelter Royalty Financing with Franco-Nevada Corporation for US$100million. Franco-Nevada will receive a perpetual 1% NSR interest from the Cascabel licence area.
SolGold is currently assessing financing options available to the Company for the development of the Alpala mine following completion of the Definitive Feasibility Study.
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 the largest and most active concessionaire in Ecuador.
The Company wholly owns four other subsidiaries active throughout the country that are now focussed on thirteen high priority gold and copper 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 2,072,213,495 fully-paid ordinary shares and 113,175,000 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 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.
Copper Equivalent is currently calculated (assuming 100% recovery of copper and gold) using a Gold Conversion Factor of 0.751 (CuEq = Cu + Au x 0.751), calculated from a current nominal copper price of US$3.30/lb and a gold price of US$1700/oz.
See www.solgold.com.au for more information. Follow us on twitter @SolGold plc
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