'PNG Golpu' lookalike for Aussie company

AN Australian junior has reported what it described as one of the “top porphyry copper-gold exploration drill holes in history”.
'PNG Golpu' lookalike for Aussie company 'PNG Golpu' lookalike for Aussie company 'PNG Golpu' lookalike for Aussie company 'PNG Golpu' lookalike for Aussie company 'PNG Golpu' lookalike for Aussie company

The company was Brisbane-based, London-listed SolGold and the project was the Cascabel copper-gold porphyry project, which sits on the Andean copper belt in northern Ecuador.

SolGold holds 85% of the project and is funding 100% of exploration, with Cornerstone Capital Resources holding the minority stake.

The hole at the Alpala zone returned 1338m at 0.49% copper and 0.36 grams per tonne gold, or 0.81% copper equivalent.

The drill hole extended the mineralised zone - which remains open in all directions - by 100m at depth, and 100m to the north and northeast.

Higher grade sections within the hole included 344m at 0.86% copper and 0.68gpt gold, and 750m at 0.67% copper and 0.5gpt gold.

Of the 18 holes drilled to date, 17 have hit mineralisation at an average of 0.37% copper and 0.35gpt gold across a 700m long by 500m wide mineralised zone, with an 1800m vertical extent.

SolGold says five of the holes at Alpala ranked amongst the top porphyry copper-gold exploration drill holes in history.

Executive director Nick Mather said 1300m at 0.81% copper was outstanding.

"The Alpala system is clearly very strong, very rich and very large," he said.

"We have only tested 20% of the surface footprint of the greater Alpala target area.

"The Alpala deposit remains open in all directions and the impressive average across all assayed core of 0.37% copper and 0.35gpt gold indicates that it's a very fertile system.

"We believe that Cascabel is about to reveal some very large targets at significantly higher grades than are usually encountered in a porphyry system."

Yesterday, SolGold released the final assays from the 17th hole, which returned 948m at 0.54% copper and 0.53gpt gold (1.01% copper equivalent) from 330m.

High-grade sections included 562m at 0.7% copper and 0.75gpt gold; 248m at 0.94% copper and 1.36gpt gold; and 136m at 1.28% copper and 2.2gpt gold.

The hole extended Alpala upwards and to the southwest.

Mather said given the high gold content of the system, it was perhaps more appropriate to refer to it as a gold deposit.

"There simply aren't very many gold systems like this in the world that are big rich and predictable," he said.

"Cascabel is certainly unique."

SolGold said Alpala Central showed similarities to Newcrest Mining and Harmony Gold's Golpu deposit in Papua New Guinea.

Further targets have been identified via magnetic modelling, bringing the total number of targets identified to 14 in total. A final version of the model across the entire tenement survey is expected within two weeks.

Golpu has reserves of more than 10 million ounces of gold and nearly 5 million tonnes of copper.

Alpala Central is one of only 14 targets identified at the project to have been drilled so far, and the company is certain the deposit is going to get bigger.

SolGold technical services manager Benn Whistler said the broader Moran-Alpala trend showed similarities to the Hugo Dummett deposit at Oyu Tolgoi in Mongolia.

The $5.3 billion development of the deposit was recently approved by Rio Tinto.

Seven of the 14 targets identified by SolGold are drill-ready.

"The fact that most of these targets have similar geology to the remarkable deposit we are currently drilling at Alpala, and the fact that we are seeing significant similarities with places like Golpu and Oyu Tolgoi is really confirming that not only do we have a world class porphyry at Alpala, but a multi-faceted world class porphyry field on our hands here at Cascabel," Whistler said.

SolGold believes capital costs to develop Cascabel could be billions lower than comparable deposits due to its proximity to hydro power plants, ports, fresh water and sealed roads.

Still, deep holes are expensive and Cascabel is going to cost a huge amount of cash to drill out.

SolGold had less than $A400,000 cash at the end of December.

Earlier this month, ASX-listed resources investor DGR Global (led by Mather), which holds a 16% stake in SolGold, agreed to loan the company up to $7 million to fund Cascabel exploration through to the end of the year.

The loan carries a 9.5% per annum interest rate and is repayable on December 31, or if the capital raises capital.

DGR can also elect to convert all or part of the loan, including accrued interest, into further equity as part of a SolGold capital raising.

DGR's last big success was the takeover of Orbis Gold last year, which netted it $26 million in proceeds.

The company probably shouldn't worry too much about being repaid, as SolGold on Friday announced a private placement with Maxit Capital to raise $US20 million.

The raising will give Toronto-based Maxit a 19.9% stake in SolGold.

SolGold is capitalised at just more than $50 million in London.


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