Noricum Gold “Significant drilling intercepts, Board strengthened, MOU signed nearby”

Noricum Gold Limited LON:NMG has given DirectorsTalk its interim results for the six-month period ended 30 June 2016. 

 

Highlights

 

·     Significant drilling intercepts at the Kvemo Bolnisi East project, including 33m @ 1.04% Cu from surface and23.2m @ 2.8% Cu from 89.8m

 

·     Board strengthened by appointment of Dr Neil O’Brien and Mr Peter Damouni, both with significant experience in developing and financing mining projects

 

·     Memorandum of Understanding (‘MoU’) signed with owner of the nearby gold and copper mining operationJSC RMG Gold and JSC RMG Copper (‘RMG’) to outline mining and processing arrangements for future production

 

Chairman’s Statement

 

Noricum has 50% ownership and operational control of the Bolnisi Copper and Gold Project in Georgia. Our exploration activities during the period indicate that the Bolnisi project has the potential to host several significant deposits which materially advances the potential scale of a mining operation.

 

The Bolnisi district could support a large mining operation for the following key reasons.

 

GEOLOGY: Bolnisi is an 861 sq. km project located on the prolific Tethyan Belt in the same geological environment as well-known high grade copper-gold deposits across the Turkish border.

 

EXTENSIVE DATABASE: Noricum has inherited an extensive data base with 70 years of Soviet-era exploration data now being digitised and interpreted to confirm and prioritise exploration targets towards early drill-testing.

 

INFRASTRUCTURE: The Bolnisi district of Georgia already has several producing mines, a well-developed infrastructure, including good road and rail links and access to cheap (hydroelectric) power.

 

GEORGIA: The Georgian mining code is being updated to comply with best international standards and the Georgian government is supportive of the development of new mines.

 

The vast historic exploration database enables us to quickly prioritise targets and minimises the need for lengthy grassroots exploration over our large licence area. Through analysis and interpretation of this data we have identified two prominent target areas with outcropping and near surface oxide gold mineralisation (Kvemo Bolnisi and Tsitel Sopeli) and confirmed a new area of sulphide copper-gold mineralisation at Kvemo Bolnisi East (‘KB East’).

We are encouraged by our drill results at KB East with significant new copper and gold intersections as detailed in our announcement of 11 August 2016.  These suggest four distinct potential resource types: (i) outcropping and near surface oxide gold mineralisation (with potential for small scale production); (ii) high-grade near-surface copper mineralisation (with potential for low-cost leaching); (iii) structurally controlled chalcocite and high grade copper mineralisation to depths of over 100m; and (iv) extensive broad sections of copper sulphide mineralisation open to depth (bulk tonnage targets). The geology is similar to our joint venture partner’s nearby Madnueli Deposit, which has historic production of 85Mt of copper ore at an average 1.0% Cu and 1g/t Au, and has a current mine life of approximately 15 years.  In this context, we recently announced an initial exploration target of between 50Mt and 70Mt @ grades between 0.30% Cu and 1.00% Cu and 0.1 to 1 g/t Au for copper sulphide mineralisation and 0.5 to 5 g/t Au for oxide gold resources.

We have made significant progress in negotiations to work with our JV partner to deliver near term production. We have negotiated an MoU with RMG (our partner’s production company), to outline mining and processing arrangements for the future production of precious and base metal ores mined from our licence area.   We anticipate future contract mining and processing costs of around US$600 oz Au assuming an average grade of 1 g/t Au.  Access to RMG’s processing facilities would significantly reduce both capital expenditure and the timeframe to production.

On 1 July 2016 we announced a non-binding and mutually advantageous agreement with our partner, Caucasian Mining Group (‘CMG’), to jointly evaluate and develop the David Garedji Copper-Gold Prospect on CMG’s nearby mining and exploration licence with resources calculated on Soviet standards of: 460,000 oz gold @ 4.6 g/t; 740,000 oz silver @7.3 g/t; 50,000 t copper @ 1.6% plus associated lead and zinc.

Corporate and Financial Review

During the reporting period, we strengthened our in-country team with the appointment of Jim Royall as Chief Geologist.Jim is an exploration geologist with over 23 years in the mining industry and has a strong background in mineral exploration.

On 6 September 2016, we strengthened our Board through the appointment of Dr Neil O’Brien and Mr Peter Damouni as Non-Executive Directors. They bring significant experience in developing and financing mining projects. Dr O’Brien is a recognised authority on the Bolnisi style of mineralisation having completed his PhD on similar types of VMS deposits.

As an exploration and development company which has no revenue we are reporting a loss for the six months ended 30 June 2016 of £497,980 (2015: £271,422), which is in line with our budget.

We are excited by the opportunity for Noricum to play a part in developing the mining potential of Georgia. I look forward to keeping shareholders regularly updated with our progress

 

Michael Hutchinson

Chairman

26th September 2016

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