Option to Acquire 80% of Scottish Gold Project
Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.
Erris Resources plc / EPIC: ERIS.L / Market: AIM / Sector: Mining
10 December 2019
Erris Resources plc
("Erris Resources" or the "Company")
Agreement Signed with GreenOre Gold Plc for Option to Acquire 80% of Scottish Gold Project
Erris Resources, the European focused mineral consulting and exploration company with a portfolio of zinc and base metals projects in Ireland and gold projects in Scandinavia, is pleased to announce that it has entered into an option agreement (the "Option Agreement") with GreenOre Gold plc ("GreenOre") giving Erris Resources the option to acquire 80% of the Loch Tay gold and associated base metals project (the "Loch Tay Project" or the "Project") in Perthshire, Scotland.
· Option Agreement signed with GreenOre to explore for gold on the area covered by the Loch Tay Licence in Perthshire, central Scotland, conditional on the conclusion of due diligence by Erris Resources
· Project area comprises 237 square kilometres of highly prospective ground within the Grampian Gold Belt
· Two priority target areas, Ardtalnaig and Glen Almond, identified as having excellent gold potential based on the presence of historic workings, mineralised outcrops and alluvial gold occurrences
o 10 gram nugget in the Glen Almond river within the Glen Almond target area discovered in July 2019 by a team from the University of Leeds
· Option Agreement provides Erris Resources with a low risk option for discovery on an exciting and new gold project within a stable jurisdiction
· Erris Resources maintains its robust cash position with approximately €1.6 million cash held at end November 2019
· Erris Resources continues to review projects in low risk jurisdictions internationally that fit its investment criteria
Erris Resources CEO, Anton du Plessis, said, "We are delighted to have signed the Option Agreement with GreenOre to advance highly prospective gold targets in central Scotland. This gives us exposure to new gold targets that have not previously been tested, but which are located in the highly prospective Grampian Gold Belt that already hosts some important gold deposits such as Curraghnihalt (6.09 Moz at 13.6g/t Au), which was acquired by New York-based Orion Resource Partners in a C$537m buy-out of TSX/AIM-listed Dalradian Resources in June 2018, and Cononish, which is only 40 kms away and that aims to pour its first gold next year. Cononish has measured and indicated resources of 246,000 oz grading 14.3 g/t Au. Importantly, land access agreements have already been signed, which allow work to proceed on the priority targets with the aim of advancing exploration to drill target definition in 2020."
Erris Resources and GreenOre entered into an Option Agreement on 9 December 2019 to explore for gold on the area covered by the Loch Tay Licence in Perthshire, Central Scotland. The Option Agreement is conditional, inter alia, on the satisfactory conclusion by Erris Resources of a due diligence review of the Project.
The Project area comprises 237 square kilometres of highly prospective ground within the Grampian Gold Belt, a region of Dalradian rocks, which host several significant mineral occurences and deposits of high-grade gold, base metals and baryte across Northern Ireland and Scotland. Grampian gold deposits include the Curraghinalt deposit in Northern Ireland (6.09 Moz at 13.6g/t Au) and the Cononish deposit in Scotland (266 KOz at 13.4 g/t Au).
An initial due diligence review, which involved preliminary prospecting and mapping by Erris Resources, has identified two priority target areas, Ardtalnaig and Glen Almond, as having excellent gold potential based on the presence of historic workings, mineralised outcrops and alluvial gold occurrences.
The main terms of the Option Agreement are as follows:
· The Option Agreement is conditional on Erris Resources issuing an option notice to GreenOre following satisfactory completion by Erris Resources of a due diligence review of the Project by no later than 18 January 2020 (the "Option Notice").
· Following the issue of the Option Notice, Erris Resources will have the option to earn 80% of the Loch Tay Project consisting of the Loch Tay Mines Royal Option from GreenOre by defining a minimum inferred resource of 250,000 ounces gold, to be defined by an Independent Competent Person, within four years of the date of the Option Notice.
· Upon defining 250,000 ounces within the required time frame, the ownership of the licence shall be allocated as to 80% Erris Resources and 20% GreenOre and any subsequent funding shall be on a pro-rata basis.
· In the event of either party failing to fund their respective portion, they will be diluted according to a standard industry formula. If either party shall dilute to less than 10% then that party shall forfeit all ownership and be entitled to a 2% Net Smelter Return Royalty ("NSR").
· Erris Resources shall have the option to purchase 50% of the NSR for US$1M at any time prior to a production decision on the project.
· Erris Resources will be the operator and will manage the exploration programme.
Targets on the Loch Tay Project
Following the initial due diligence review by Erris Resources including the review of 87 samples previously collected by GreenOre, two new target areas for gold have been outlined on the Ardtalnaig and Glen Almond estates approximately 17-20km southwest of Aberfeldy. The licence area hosts several significant mineral occurrences and historic workings for silver, lead and copper. The proximity to the Loch Tay Fault, a major crustal scale fault zone, is considered an important control on the mineralisation in the licence area.
Ardtalnaig Target: In the Ardtalnaig area, small-scale workings for lead, which are hosted in felsites, have been mapped and include several trenches and a possible adit with associated dumps. The felsites intruded the Dalradian schists following the main regional metamorphic events such that they are unaffected by deformation. The felsites are interpreted to be part of a sill complex and are essentially subvolcanic rhyolite intrusives; elsewhere in the licence area, outcropping flow banded rhyolite has been found which resembles the felsite. The felsites indicate the presence of late-orogenic magmatic activity which could have driven hydrothermal activity and mineralisation of gold and base metals. Recent sampling by GreenOre has yielded high-grade gold associated with quartz-stockwork breccias within these felsites. Quartz stockworks in felsite containing variable amounts of galena, sphalerite and baryte have been found within an area of intermittent outcrop measuring 1.7km x 1km while mineralised boulder trains increase the length of the zone to approximately 2.4km. The stockwork zones are thought to range from 0.5m to several metres in width and there could be several parallel structural zones present based on the distribution of mineralised boulders. The trend of the mineralised zones is approximately 160 degrees and is consistent with other occurrences in the wider licence area. Samples taken by GreeOre from the historic workings returned encouraging results for gold, silver lead and zinc. Two samples from separate workings returned the following: sample K06789 - 5.97g/t Au, 8.9g/t Ag, 2.21% Pb and 4.2% Zn and sample K24526 - 7.58 g/t Au, 16.9 g/t Ag, 4.43% Pb and 3.99% Zn. A boulder sample taken uphill from the workings returned a result of 8.74g/t Au, 11.85g/t Ag and 1.66% Pb. Most samples show strong correlations between gold, lead and baryte. The sulphides occur in vuggy quartz veins and stockworks indicative of shallow epithermal-style mineralisation. Further mapping, rock sampling and soil surveys are planned. The association of mineralisation with felsites and major structures in the area is important and this will guide exploration going forward.
Glen Almond Target: Some vein outcrops and alteration zones consisting of silicification of pelites and psammites were discovered in the Glen Almond area which is located 6.6km south of Ardtalnaig. The prospect lies 2.5km east-southeast of the Coire Buidhe silver mine, one of the more significant historic mines in the region where up to 18 veins were worked for high-grade silver associated with lead in argentiferous galena. In addition, a team from the University of Leeds which is studying alluvial gold, discovered a 10 gram nugget in the Glen Almond river within the Glen Almond target area in July 2019. The nugget is thought to be proximal to source due to its shape and association with quartz crystals which were still attached. A total of 77 fine gold grains were panned at a downstream site in Glen Almond as part of the same regional alluvial gold study. Further prospecting and mapping is required to locate the source of alluvial gold and expand the potential of the prospect.
The licence area, including the two main prospects, has good access, nearby infrastructure and is located in a region which has seen acceptance for mining projects. Recently, operations at the Cononish deposit owned by Scotgold (43 km to the west) commenced and a planning application was approved by Perth and Kinross Council in September 2016 for the Duntanlich baryte mine 25km to the northeast which is owned by M-ISWACO, a Schlumberger company. The Foss baryte mine located 18km to the northeast will be winding down operations once Duntanlich is in production. Initial land access agreements have been signed by GreenOre with the two landowners at Ardtalnaig and Glen Almond.
The Company believes that the joint venture terms with GreenOre give Erris Resources a low risk option for discovery on an exciting and new gold project within a safe jurisdiction. Erris Resources believes that the Loch Tay Project has significant potential for discovery of an economic gold resource and, following successful conclusion of its remaining due diligence review and conclusion of the Option Agreement, Erris Resources will advance the Project diligently with this aim in mind. Further information including maps for the Project will be provided on the Erris Resources website following this announcement.
At the end of November 2019, the Company held approximately €1.6 million in cash and maintains a disciplined approach to expenditure on its 100%-owned projects. The Board and Management continue to review projects in low risk jurisdictions internationally that fit its investment criteria in order to identify new assets for the Company.
The technical information in this announcement has been compiled on behalf of Erris Resources by Aiden Lavelle. Aiden Lavelle (BSc (Hons), MSc, MIGI, P.Geo) is Erris' chief operating officer. Mr Lavelle has sufficient experience relevant to the style of mineralisation and type of deposit under consideration, and to the activity which he is undertaking to qualify as a Competent Person in accordance with the guidance note for Mining, Oil & Gas Companies issued by the London Stock Exchange in respect of AIM Companies, which outlines standards of disclosure for mineral projects. Mr Lavelle consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.
For further information visit www.errisresources.com or contact:
Anton du Plessis /Aiden Lavelle
Erris Resources plc
+353 (0) 94 902 8481
David Hart/Liz Kirchner
Allenby Capital (Nominated Adviser)
+44 (0) 20 3328 5656
Shard Capital (Joint Broker)
+44 (0) 20 7186 9952
Zoe Alexander/Andy Thacker
Turner Pope Investments (TPI) Ltd (Joint Broker)
+44 (0) 20 3657 0050
Isabel de Salis/Gaby Jenner
St Brides Partners (Financial PR)
+44 (0) 20 7236 1177
Erris Resources plc (EPIC: ERIS.L) is an AIM quoted, European focused, discovery driven consulting and exploration company. Supported by the Canadian mining major, Osisko Gold Royalties, which has a 18.9% interest in the Company. The Company has an established portfolio of zinc and base metals assets in Ireland and gold projects in Sweden, Finland and Norway which it is looking to further build on. Led by a highly qualified team with extensive corporate and sector experience, Erris's strategy is to create shareholder value through commercial discovery of base or precious metal assets in proven mineral districts and in favourable European jurisdictions.
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