Noricum Gold agreement to acquire interest in Georgian Copper prospect
Noricum Gold Ltd the European focused base and precious metals resource development company, has today announced that it has entered into a non-binding Heads of Terms agreement with Caucasian Mining Group, its partner in the Bolnisi Copper-Gold Project in Georgia, to jointly evaluate and develop the David Garedji Copper-Gold Prospect situated within CMG’s mining and exploration licence in Georgia. Due diligence will be undertaken ahead of finalisation of the Agreement.
The Company is also pleased to announce that it has raised £1.1 million by way of an oversubscribed placing of 785,714,286 new ordinary shares of no par value in the capital of the Company, with new and existing shareholders, at a price of 0.14 pence per Placing Share.
· Adds significant resources to the Company’s already robust inventory in Georgia and offers a further opportunity to deliver additional precious and base metals production in the medium term
· Successful placing provides the Company with access to this strategic prospect, which management has identified as a strong value opportunity
· An advanced prospect which includes 5.8 km of underground development and over 25,000 metres of diamond drilling
· Existing Soviet Resource of:
* 460,000 oz gold Au at an average grade 4.63 g/t
* 740,000 oz silver Ag at an average grade of 7.3 g/t
* 50,000 t copper Cu at an average grade of 1.57%
* 130,000 t lead Pb at an average grade of 4.13%
* 150,000 t zinc Zn at an average grade of 4.7%
· 30 ore-bearing zones identified with peak mineralised widths of 23m and grades up to 55g/t Au, 253g/t Ag, 21% Cu, 28% Pb and 35% Zn
· Significant expansion potential has been demonstrated by previous work – existing resource relates to a limited area on strike with mineralisation extending to the northeast and south
· David Garedji lies close to the Company’s Bolnisi Copper-Gold Project Bolnisi which has total mineral resources of 980,000 tonnes of contained copper; 6.6 million ounces of gold and 22 million ounces of silver, also in partnership with CMG
Noricum Gold Ltd CEO Greg Kuenzel said, “I would like to thank both our new and existing shareholders for their support in this transaction, which creates multiple benefits for Noricum Gold and accordingly has been in our sights since we acquired the Bolnisi Copper Gold Project 12 months ago.
“Like Bolnisi, David Garedji is advanced, high grade and scalable and as well as increasing our resource inventory substantially, it presents us with a further near-midterm production target to add to the three we have identified from the 17 defined areas we inherited on the acquisition of Bolnisi. We are currently finalising our production and processing agreement with CMG so that we can commence production from our Kvemo Bolnisi starter pit in Q3 2016 and, with this in mind, I hope shareholders will be encouraged by this announcement which represents a strengthening of our professional relationship. We believe that this agreement is a huge step forward for the Company, and with the coming months due to be characterised by production and growth, I look forward to updating the market shortly.”
Due Diligence and Heads of Terms
CMG will allow Noricum, through its Georgian operating vehicle JSC Georgian Copper and Gold, to undertake detailed due diligence over David Garedji before agreeing the final terms of the proposed earn-in.
Due diligence and exploration to be undertaken may include the following:
– Detailed soil geochemistry along the length of the David Garedji deposit and its projected extensions;
– Close-spaced IP resistivity surveys across the area to identify sulphide mineralisation;
– Close-spaced ground magnetic surveys aimed at picking up major structural features;
– Sampling of underground development;
– Underground fan drilling to validate historic intercepts and identify new mineralisation;
– Surface drilling specifically targetting gold-polymetallic mineralisation beneath the barite-silver zone.
Noricum intends to commence detailed due diligence as soon as possible and will focus on the confirming strike extension opportunities as well looking in more detail at the immediate extension potential for gold-polymetallic mineralisation in and around the extensive underground development that already exists at the site.
The final agreement is expected to mirror that currently in place between Noricum and CMG whereby Noricum will agree to an initial spend on exploration and development to earn its ultimate interest in the project. It is expected that any expenditure on due diligence will be offset against the final commitment.
Further Information on David Garedji
During the 1940s and 1950s exploration consisted of 2.6 km of underground development exposed barite-silver and gold – polymetallic mineralisation. 140 diamond drill holes for a total of 16,255m and more than 6,000 cubic metres of surface trenching was also completed.
Exploration was limited to only a small portion of the mineralised structure at David Garedji. The initial focus was on barite-silver exploration resulting in a combined open pittable C1 & C2 Soviet resource of 11 million ounces of silver at an average grade of 1 ounce Ag per tonne and a further 2.3 million tonnes of barite at an average grade of 20% Ba. This resource was found within an area of only 300m by 400m.
A further 3.2 km of underground development and 8,885m of diamond drilling was completed to test for gold-base metal mineralisation beneath the barite-silver ores. A Soviet resource in all categories has been estimated of 3.2Mt at 4.63g/t Au, 7.3g/t Ag, 1.57% Cu, 4.13% Pb and 4.7% Zn for an initial 460,000oz Au, 740,000oz Ag, 50,000t Cu, 130,000t Pb and 150,000t Zn. This resource relates to a limited area of exploration coverage and the mineralisation extends both to the northeast and south of these underground workings.
Within this initial area of exploration completed by previous Soviet expeditions, a total of 30 zones termed “ore-bearing” were identified with peak mineralised widths of 23m and grades as high as 55g/t Au, 253g/t Ag, 21% Cu, 28% Pb and 35% Zn. Nine of these zones are classified as high gold grade zones with grades typically ranging from 3.3 to 14.4g/t Au.
Observations made by CMG are significant and will influence exploration. These include reference to areas reporting significant polymetallic mineralisation but where no gold assays were taken implying the likelihood of additional gold credits once new channel sampling has been completed. A large proportion of historic regional exploration drilling targeting gold-polymetallic mineralisation was done using vertical drillholes whereas CMG conclude that in retrospect the Soviet expeditions should have drilled angled holes to intersect steeply dipping mineralised structures.
The nature of mineralisation means that existing infrastructure owned and operated by Noricum’s partner can be used to process future ores thereby significantly reducing lead- time to production and capital expenditure.
The Placing Shares will rank pari passu in all respects with the existing ordinary shares of no par value in the capital of the Company. Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that Admission will become effective on or around 6 July 2016.
As a result of the issue of the Placing Shares as described above, the issued share capital of the Company now consists of 4,792,485,350 ordinary shares of no par value.
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