Erris Resources upbeat despite disappointment at two projects

Europe-focussed mineral exploration company Erris Resources updated the market on the Centerra-funded exploration programmes in Sweden on Thursday, reporting that at the Brännberg Project, a total of 14 holes totalling 2,681.7m were drilled between July and September, with full results received during November into early December.

The AIM-traded firm said the drilling tested the down dip and along-strike continuations of mineralisation intersected in historic drilling by Beowulf Mining.

Drilling also tested new ground magnetic anomalies and IP chargeability anomalies.

All holes encountered “strong” alteration zones and traces of mineralisation, including veinlets and disseminations of arsenopyrite and chalcopyrite.

Gold was associated with a stockwork of sheeted quartz-arsenopyrite veins and the increased vein density in BB001 and BB004 may be related to a localised kink on a main NW-trending structure, Erris explained.

The core of the mineralised zone had “significant” intersections over a strike of 150m, while mineralisation was open at depth with copper and arsenic increasing down dip.

Drilling to date had only tested approximately 900m along a single corridor within the 5,285Ha permit block.

Erris said drill results confirmed that there was a gold system at Brännberg that warranted further work.

The project was located 10.8km from the active Maurliden Mine, and 6.2km from a closed mine.

Centerra Gold had elected not to continue drilling on the Brännberg Project due to the mineralised system not demonstrating the size to host a greater-than-one-million ounce gold deposit.

The project now reverted back 100% to Erris Resources, and the company said it would undertake follow up work to determine the resource potential of the project and consider whether it could be advanced on its own or potentially in partnership with a junior gold developer.

At the Käringberget Project, a ground EM survey carried out in February failed to identify any conductors that warranted drill testing, with the planned drill programme reduced to two exploration holes.

The company said the two holes were drilled to test magnetic anomalies identified during a ground magnetometer survey.

It explained that the holes failed to intersect significant mineralisation with the anomaly caused by disseminated pyrrhotite barren of gold and base metals.

Centerra Gold had also made the decision not to advance that project based on the results to date, with Erris in agreement on the limited potential of the project once the magnetic anomalies had been tested.

No further work would be carried out, and the ground would be relinquished.

Erris Resources did announce that Centerra Gold had elected to continue its generative agreement with the company covering Sweden, however, and had also expanded the programme into Finland.

Under the terms of the agreement, Centerra Gold was committed to spend $0.25m on generative exploration work in 2019, with the option to elect individual projects to earn a 70% interest by spending $3m, as to 51% by spending $1m and an additional 19% by spending $2m.

“While the results at Brännberg did not return the potential for a plus million ounce gold deposit in line with Centerra's size criteria, there is still potential for a smaller gold deposit that could be suitable for a small to mid size gold producer,” said Erris chief executive officer Anton du Plessis.

“This is low cost exploration whereby targets are tested in a rapid and efficient way, and if they do not deliver the required criteria we move onto the next target.

“As part of this ongoing exploration work, we are delighted to continue our strategic alliance with Centerra Gold and have its support as we continue to generate new exploration opportunities in Northern Sweden and expand the remit into Finland for 2019.”

Du Plessis said the continuation of the Centerra programme acknowledged the cost-efficient testing of targets by Erris, and the ability to continue to generate new targets, which he said was a “key factor” for exploration success.

“We remain focused on creating shareholder value through commercial discovery of base or precious metal assets in proven mineral districts and in favourable European jurisdictions and look forward to updating the market as we advance the 2019 programmes.”