TIDMSOLG
RNS Number : 2405L
SolGold PLC
29 April 2020
29 April 2020
SolGold plc
("SolGold" or the "Company")
Further Metallurgical Test Work Continues to Add Improvements
and Modelled Revenue Increases at Alpala
The Board of Directors of SolGold (LSE & TSX: SOLG) is
pleased to provide an update on the ongoing comprehensive
metallurgical test work programme underway at the Company's
flagship Alpala copper-gold porphyry Project in northern
Ecuador.
Following the completion of further metallurgical test work at
Alpala, the Company has received the Phase 2 Test Work Report by
ALS Metallurgical Laboratories, Canada. Phase 1 and 2 together
represent an evaluation of the metallurgy for the whole planned
mine life of the Alpala deposit.
Improved recoveries in metallurgical tests across all valuable
minerals indicate a potential increase in the revenues from the
Alpala project. Results from these metallurgical test programmes
form important elements of the Pre-Feasibility Study ("PFS")
currently underway. Phase 2 allowed SolGold to conduct flowsheet
optimisation testing followed by flowsheet development.
Highlights of the Phase 2 metallurgical test-work:
-- Life of mine increase in gold recovery by 7% compared to
results of the Preliminary Economic Assessment ("PEA") filed on 19
November 2019
-- Ability to produce 26%-30% copper concentrate (plus gold and
silver) for modelled life of mine
-- Low deleterious elements in concentrate for life of mine,
such as arsenic, bismuth, cadmium, fluorine and others (see
glossary)
-- All composite samples from Phase 2 (as in Phase 1) responded
well to conventional froth floatation with high valuable metal
recovery rates overall
-- Mineralogical testing confirmed that the copper sulphide
mineral was substantially chalcopyrite
The Phase 2 test work programme following the PEA, builds on
initial previously reported Phase 1 test work (PEA) and
includes:
-- Confirmatory tests on samples representative of the initial ten years of the mine life
-- Expansion of tests with a focus on years ten to twenty of the mine life
-- Tests to evaluate performance on lower grade material in the later mine life (after year 20)
The Phase 2 test work programme was based upon further composite
samples from 785 metres (1,437kg) of core from previous diamond
drilling at the Alpala project. This generated a total of 33
variability composites (each comprising 24 metres of core) as well
as four master composites. The master composites represent low,
medium (x2) and high grade feed material. To date, a total of 1,265
metres (2,417kgs) of core has been analysed and metallurgically
assessed as part of both Phase 1 and Phase 2 of the metallurgical
programme, comprising 53 variability samples and seven master
composites.
Table 1 below shows the full spectrum of project feed grades
covered in both Phase 1 and Phase 2.
Please click on the PDF to view the full announcement:
http://www.rns-pdf.londonstockexchange.com/rns/2405L_1-2020-4-28.pdf
Figure 1: Composite feed grades for Phase 1 (PH1) and Phase 2
(PII) test programmes.
Mine Years Composite Feed Grade
Cu Ag Au
% g/t g/t
---- ---- ----
PH1-HG 2.02 4.2 3.12
-------------------------- ---- ---- ----
Phase 1 Report
(Years 1-10) PH1-IG 1.18 2.2 2.61
---------- ---- ---- ----
PH1-LG 0.79 1.6 0.47
-------------------------- ---- ---- ----
PII-LG 0.21 1.0 0.12
-------------------------- ---- ---- ----
Phase 2 Report
(Years 1-49) PII-MG1 0.42 1.0 0.18
---------- ---- ---- ----
PII-MG2 0.63 1.5 0.36
-------------------------- ---- ---- ----
PII-HG 1.53 5.5 1.13
-------------------------- ---- ---- ----
Note: indicated sample position in the 50Mt/a fast ramp up case
as per PEA
Figure 2: Graph showing metallurgical samples over modelled mine
life
Commenting on the results, Nicholas Mather, SolGold's Chief
Executive Officer commented:
"Despite current disruptions due to COVID-19, the SolGold team
continues to progress large scale metallurgical test work at
Alpala. The results of this are being used to assess potential
refinements to the flowsheet and our operating and capital cost
estimates as well as improvements in revenues generated by upgraded
recoveries. In addition, these results continue to demonstrate the
high-quality of Alpala concentrate and form an important part of
our current offtake negotiations with leading traders and
smelters."
Greg Harbort, General Manager of Process and Metallurgy
said:
"The comprehensive test programme completed thus far has once
again produced encouraging results. The flotation tests have
demonstrated the ability to produce a high grade dominantly
chalcopyrite concentrate throughout the modelled mine life and
confirms the Alpala project to be a very low deleterious content
deposit. Variability test work conducted so far has shown that
production can occur effectively at any point on the grade-recovery
curve, positioning the modelled mine robustly in terms of possible
concentrate market changes."
Background to Phase 2 Metallurgical Test Work
In Phase 2, efforts were focused on optimising the process
flowsheet using the test results of the four master composites,
prepared from the 33 variability samples. The developed flowsheet
was then applied to the 33 individual variability samples. Locked
cycle tests were initially run with water sourced from site, and no
water recycle. Locked cycle tests have for several decades, been
the industry standard method used to simulate plant operation (with
regard to recirculating loads, water quality and reagent usage) and
optimal metallurgical recovery circuit design.
The tests were then repeated with recycled water to simulate
process water use on site. This produced eight sets of locked cycle
results, with feed grades varying from 0.21% Cu to 1.53% Cu.
Recovered copper concentrate grades ranged from 25.7% to 30.1%
copper content. Gold in the concentrate varied from 10.3 g/t to
16.7 g/t, and silver from 45 g/t to 93 g/t. Extended analysis
showed very low deleterious elements in the concentrate (Figure 6),
well below any applicable penalty limits.
SolGold considers that following suitable regrind and cleaning
stages, it may be possible to produce a saleable magnetite
concentrate. Tailings from each of the rougher flotation
variability tests were subjected to Davis Tube Recovery tests to
evaluate the potential for magnetite recovery. The tests were
conducted at the 'as received' grind size (typically 150 um) at a
magnetic intensity of 4,000 Gauss. Magnetite recoveries were
calculated based on the flotation feed mineralogy. The results
indicate that at a feed grade of greater than 2.5% magnetite, a
concentrate grading >40% magnetite can be produced. Magnetite
recoveries (to concentrate) averaged 85%. SolGold is continuing to
evaluate by-product magnetite recovery.
Figure 3: Composite recoveries and concentrate grades (based on
test work mass balance) for Phase 1 and Phase 2 test
programmes.
Phase Sample Recovery Concentrate Grade
Cu Au Ag Cu Au Ag
% % % % g/t g/t
----------------------------- ---- ---- ---- ------ ------ ------
1 Low Copper Master Composite 86.0 78.7 56.3 30.4 28.3 45.0
----------------------------- ---- ---- ---- ------ ------ ------
Intermediate Copper Master
1 Composite 92.5 81.2 74.2 28.4 46.2 39.0
----------------------------- ---- ---- ---- ------ ------ ------
1 High Copper Master Composite 93.1 85.8 78.8 30.7 41.0 58.0
----------------------------- ---- ---- ---- ------ ------ ------
Low Grade Master Composite 78.2 50.1 26.8 28.5 10.3 48.0
----------------------------- ---- ---- ---- ------ ------ ------
Medium Grade Master Composite
2 No 1 83.3 68.7 62.3 29.5 10.4 52.0
(Fresh
site water)
----------------------------- ---- ---- ---- ------ ------ ------
Medium Grade Master Composite
No 2 87.7 63.6 62.4 27.2 10.7 46.0
----------------------------- ---- ---- ---- ------ ------ ------
High Grade Master Composite 94.9 70.0 56.4 29.7 16.1 93.0
----------------------------- ---- ---- ---- ------ ------ ------
Low Grade Master Composite 81.8 46.5 19.3 27.9 10.5 47.0
----------------------------- ---- ---- ---- ------ ------ ------
Medium Grade Master Composite
2 No 1 83.3 67.1 26.6 28.0 10.8 53.0
(Fresh
water/
no water
recycle)
----------------------------- ---- ---- ---- ------ ------ ------
Medium Grade Master Composite
No 2 86.0 65.7 60.5 25.7 10.9 45.0
----------------------------- ---- ---- ---- ------ ------ ------
High Grade Master Composite 94.8 75.9 79.3 30.1 16.7 91.0
----------------------------- ---- ---- ---- ------ ------ ------
Flotation Recovery
A substantial focus of SolGold's Phase 2 test work centred on
adjustments to the flotation circuit design and reagent regime in
order to increase gold recovery.
Phase 2 locked cycle testing of the Alpala ores indicates a 7%
increase in life of mine gold recovery compared to the PEA. As
indicated in Figure 4, substantial improvements in recovery are
expected to be achieved from year twenty onwards.
Predicted copper recoveries were consistent with the Phase 1
(PEA) predictions for years 1 to 10, but approximately 1% lower
over years 10-30. Overall this represents a 0.51% decrease in
copper recovery compared to modelled recoveries referred to in the
PEA.
Tailings from the cleaner cells were collected into ten
composites and subjected to bottle roll cyanidation test work to
evaluate the extraction of copper, gold and silver in an effort to
further enhance recoveries of these metals.
An additional two composites were used to evaluate recoveries
from biological and thiosulphate leaching. The grade of the
cyanidation composites varied from 0.29 g/t Au to 2.68 g/t Au, with
gold extraction from the cleaner tailing, based on a 72-hour
residence time, varying from 46% to 88% from cleaner cell
tailings.
Leach enhancement via an acid wash increased gold extraction to
between 58% and 89% from the cleaner cell tailings. Twenty-one days
biological oxidation followed by cyanidation increased the gold
extraction to 93%. Cyanide consumption ranged between 0.8 kg/t and
6.2 kg/t.
Figure 4: Flotation gold recovery showing improved benefit in
the mid-late life period of the mine.
Figure 5: Flotation copper recovery consistent with predicted
performance to PEA.
Figure 6: Extended Analysis - Locked Cycle Test Copper
Concentrate Quality (Phase 2 Report)
Element Symbol Units Sample
LG MG1 MG2 HG
T54 Cycle T50/55 T52/56
V+VI Copper V+VI Copper V+VI Copper T53/57
Con Con Con V+VI Copper
Con
------------- ------------- ------------- --------------
Antimony Sb g/tonne 7.1 2.4 4 15
Arsenic As g/tonne 18 21 92 70.5
Bismuth Bi g/tonne 5.3 6.3 8.0 9.4
Cadmium Cd g/tonne 12.6 4.6 9.1 16.3
Chlorine Cl g/tonne <50 <50 <50 <50
Copper* Cu % 27.9 28.8 26.4 29.9
Fluorine F g/tonne 60 55 60 <20
Gold* Au g/tonne 10.3 10.6 10.8 16.4
Iron* Fe % 28.0 28.9 30.7 30.5
Lead Pb g/tonne 533 83 88 148
Magnesium Mg % 0.30 0.18 0.21 0.05
Mercury Hg g/tonne <1 <1 <1 <1
Organic
Carbon TOC % 0.11 0.08 0.06 0.04
Selenium Se g/tonne 110 135 140 180
Silver* Ag g/tonne 47 53 46 92
Sulphur(S)* S % 32.8 33.9 35.4 36.0
Tellurium Te g/tonne 7.8 5.35 7.9 10.1
Zinc Zn g/tonne 1260 260 785 2420
-------- --------- ------------- ------------- ------------- --------------
Source: ALS Phase 2 Report 2020
Notes: a) *Cu, Fe, Au, Ag and S assays were taken from locked
cycle test assays completed at ALS Metallurgy Kamloops, Canada;
results for other metals were sourced from assays completed at ALS
Geochemistry in North Vancouver, Canada.
b) Values indicate averages of determinations completed on
individual concentrates from each locked-cycle test.
c) Complete multi-element ICP analyses along with other external
concentrate assays can be located in Appendix V - Special Data in
the full ALS Phase 2 Report
d) Details of extended analysis as included in the full ALS
Phase 2 Report
Further Planned Test Work
As part of the PFS (and ultimate DFS), SolGold continues to
advance its metallurgical test work programme. This includes plans
for a bulk sampling programme to generate 20 to 30 tonnes of
material for pilot plant evaluation. This will include vendor
thickening and filtration tests, transportable moisture limits
(TML) for shipment, rheology tests for concentrate and tailing
pipelines and further tailing characterisation work. In addition,
selected sample will be used for crushing tests and pyrite
concentrate will be produced for further leach evaluation. If
warranted, tailings will be evaluated for more detailed magnetite
recovery. The Company will provide a further update on this in due
course.
SolGold's on site operations in Ecuador are currently halted in
an effort to reduce the potential transmission of COVID-19. SolGold
continues to actively monitor all its employees. Health and safety
are top priorities for the Company and SolGold will continue
supporting its employees and local communities where possible in
their efforts to curtail the spread of the virus.
By order of the Board
Karl Schlobohm
Company Secretary
Glossary
Chalcopyrite: CuFeS(2) and the main copper ore mineral
accounting for approximately half of all copper production
Cleaner: final section of flotation recovery circuit, focussing on increasing concentrate grades
Comminution: section of the mineral processing circuit that
reduces the size of the ore fragments to a suitable size for
flotation
Deleterious elements: elements that reduce product saleability
such as arsenic, bismuth, cadmium, chlorine, fluorine, mercury,
selenium, tellurium and uranium
Locked cycle : a repetitive batch used to simulate a continuous
metal recovery circuit
Rougher: initial section of a flotation recovery circuit,
focusing on maximising metal recovery at variable concentrate
grades.
Qualified Person:
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.
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.
CONTACTS
Nicholas Mather Tel: +61 (0) 7 3303 0665
SolGold Plc (Chief Executive Officer) +61 (0) 417 880 448
nmather@solgold.com.au
Karl Schlobohm
SolGold Plc (Company Secretary) Tel: +61 (0) 7 3303 0661
kschlobohm@solgold.com.au
Ingo Hofmaier
SolGold Plc (GM - Project & Corporate Tel: +44 (0) 20 3823 2131
Finance) ihofmaier@solgold.com.au
Gordon Poole / Nick Hennis
Camarco (Financial PR / IR) Tel: +44 (0) 20 3757 4997
solgold@camarco.co.uk
Ross Allister / David McKeown Tel: +44 (0)20 7418 8900
Peel Hunt (Joint Broker and Financial
Advisor)
solgold@peelhunt.com
James Kofman / Darren Wallace Tel: +1 416 943 6411
Cormark Securities Inc. (Financial Advisor)
dwallace@cormark.com
Follow us on twitter @SolGold_plc
ABOUT SOLGOLD
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.
Dedicated stakeholders
SolGold employs a staff of 737 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 86 geologists, of whom 30% are female, 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 50km(2) .
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$3.5m.
Advancing Alpala towards development
The resource at the Alpala deposit boasts a high-grade core
which is targeted to facilitate early cashflows and an accelerated
payback of initial capital. SolGold is currently assessing
financing options available to the Company for the development of
the Alpala mine following completion of the Definitive Feasibility
Study.
Mineral Resource Estimate #3:
-- Mineral Resource of 2,663 Mt @ 0.53% CuEq for 9.9 Mt Cu, 21.7
Moz Au and 92.2 Moz Ag in the Measured plus Indicated
categories.
-- Mineral Resource of 544 Mt @ 0.31% CuEq for 1.3 Mt Cu, 1.9
Moz Au and 10.6 Moz Ag in the Inferred category
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
1,923,321,033 fully-paid ordinary shares and 185,162,000 unlisted
options exercisable at various prices ranging from 25p to 60p and
expiring between July 2020 and November 2024.
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.
See www.solgold.com.au for more information. Follow us on
twitter @SolGold_plc
CAUTIONARY NOTICE
News releases, presentations and public commentary made by
SolGold plc (the "Company") and its Officers may contain certain
statements and expressions of belief, expectation or opinion which
are forward looking statements, and which relate, inter alia, to
interpretations of exploration results to date and the Company's
proposed strategy, plans and objectives or to the expectations or
intentions of the Company's Directors. Such forward-looking and
interpretative 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 interpretations
and forward-looking statements.
Accordingly, the reader should not rely on any interpretations
or forward-looking statements; and save as required by the exchange
rules of the TSX and LSE or by applicable laws, the Company does
not accept any obligation to disseminate any updates or revisions
to such interpretations or forward-looking statements. The Company
may reinterpret results to date as the status of its assets and
projects changes with time expenditure, metals prices and other
affecting circumstances.
This release may contain "forward--looking information" within
the meaning of applicable Canadian securities legislation.
Forward--looking information includes, but is not limited to,
statements regarding the Company's plans for developing its
properties. Generally, forward--looking information can be
identified by the use of forward-looking terminology such as
"plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such words
and phrases or state that certain actions, events or results "may",
"could", "would", "might" or "will be taken", "occur" or "be
achieved".
Forward--looking information is subject to known and unknown
risks, uncertainties and other factors that may cause the actual
results, level of activity, performance or achievements of the
Company to be materially different from those expressed or implied
by such forward--looking information, including but not limited to:
transaction risks; general business, economic, competitive,
political and social uncertainties; future prices of mineral
prices; accidents, labour disputes and shortages and other risks of
the mining industry. Although the Company has attempted to identify
important factors that could cause actual results to differ
materially from those contained in forward-looking information,
there may be other factors that cause results not to be as
anticipated, estimated or intended. There can be no assurance that
such information will prove to be accurate, as actual results and
future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue
reliance on forward--looking information. The Company does not
undertake to update any forward-looking information, except in
accordance with applicable securities laws.
The Company and its officers do not endorse, or reject or
otherwise comment on the conclusions, interpretations or views
expressed in press articles or third-party analysis, and where
possible aims to circulate all available material on its
website.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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