Solomon Gold (LON:SOLG) said the first hole of 2012 at the Hambusimaloso prospect at the Mbetilonga project in the Solomon islands has reached 400 metres and is expected to be sunk to 700m.

MBT008 is targeting previous trenching results, including 80m at 1.76 per cent copper, and 30 metres at 0.88 per cent copper, and if it is successful, a second hole will be drilled.

The news was part of a wider update on activities at the firm's Guadalcanal joint venture (GJV) between the company and Newmont Mining's subsidiary - NVL Solomon Islands Ltd.

Newmont is funding the exploration activities and is earning 70 per cent in the joint venture. Last year, it spent US$7.91 mln, with US$4.92 mln expected in 2012.

Solomon said that last year saw activity across four of the five prospecting licences - the focus being on the Sutakiki and Mbetilonga licences.

At Sutakiki, the firm said exploration was underway. The project has thrown up "outstanding" results previously, at Taborora, where Solomon hit 354 metres at at 0.5g/t gold and 0.13 per cent copper.

In 2011, at Taborora, two holes intersected significant gold and copper, including 259m at 0.28g/t gold and 0.11 per cent copper from 362m to the end of hole at 621 metres in hole SUT001.

Recent work has provided definitive evidence of a gold-copper porphyry mineral system at Taborora and that targets exist below the historical drilling, and potentially in adjacent positions, said the company.

Other exploration within the GJV tenements includes the preparation for a sampling programme within the Central prospecting licence.

The company told investors: "Solomon Gold is encouraged by these results and will provide further updates as data are received. Joint venture meetings are now being held quarterly and the Solomon Gold team is taking active interest in the development and implementation of the exploration programme."

Solomon Gold’s (AIM: SOLG) joint venture partner Newmont Mining Corporation (NYSE: NEM) plans to spend US$4.9 million on exploration in 2012 on the Solomon Islands projects, starting with a new drill program at the Mbetilonga Project.

The joint venture is following up on highly copper anomalous results from trenching, including 80 metres at 1.76% copper, and 30 metres at 0.88% copper. 

The results were returned from within a coincident 600 metre diameter copper-molybdenum-bismuth soil geochemical anomalous zone.

Historical holes, drilled by Solomon Gold in 2006, intersected up to 0.76% copper in what is believed to be a cover sequence with local supergene copper development.

The first diamond drill hole for 2012, at the Hambusimaloso Prospect, has reached a depth of about 400 metres and, subject to geological evaluation, is expected to be drilled to 700 metres.


Sutakiki Project

Meanwhile, exploration has also begun at the Sutakiki Project.

Indicating the prospectivity of the area, historical drilling at the Taborora Prospect returned a broad intersection of 354 metres at 0.5 grams per tonne (g/t) gold and 0.13% copper.

In the current exploration phase, Newmont is following up two drill holes completed at the prospect in the 2011 field season which again intersected broad widths of gold and copper.

Results from one hole included 259 metres at 0.28g/t gold and 0.11% copper from 362 metres to the end of hole.

Recently completed re-logging of this hole and petrography has provided definitive evidence of the presence of a gold-copper porphyry mineral system at Taborora.

This work also supports current interpretations that drill targets exist at depth below historical drilling, and potentially in adjacent positions. 

Further geological mapping has been completed at several prospects within the Sutakiki Project and this is currently being interpreted.


Solomon-Newmont Joint Venture

Newmont is funding exploration activities and is earning a 70% interest in the Guadalcanal Joint Venture.

The joint venture is between Solomon Gold and Newmont subsidiary NVL Solomon Islands. 

During 2011 the joint venture partners undertook exploration activities on four of the five Prospecting Licenses. 

The main focus was on the Sutakiki and Mbetilonga projects. Expenditures by Newmont during 2011 were US$7.91 million.

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Solomon Gold (LON:SOLG) has added to its project portfolio by acquiring the right to buy up to 85 per cent in a highly prospective gold-copper-silver project in Ecuador.

The company has signed a binding letter of intent with Cornerstone Capital Resources (CVE:CGP) over its 5,000 hectare Cascabel gold-copper-silver property. Field work is expected to kick off in May with Solomon looking to move the project towards the drilling stage "as soon as possible".

The project is located in northern Ecuador within the Andean western cordillera, which Solomon said hosts “numerous Tier 1 world class copper-gold deposits” through Chile, Peru, Ecuador and Colombia.

These projects include the Junin copper-molybdenum deposit with a resource of 982 million tonnes at a grade of 0.89 per cent copper and the La Colosa gold deposit, which hosts 468 million tonnes at 0.86 grammes per tonne (g/t) gold.

Under the terms of the deal, Solomon can buy a 65 per cent stake in the project by making a series of private placements in Cornerstone totalling C$850,000 and spending US$7.8 million on exploration over four years.

Solomon can earn an additional 20 per cent by funding further work towards completion of a bankable feasibility study, which has been capped at US$20 million.

The Cascabel project area contains copper and gold anomalism in soil and rock chip sampling and, according to Solomon, could potentially accommodate a large discovery.

Solomon will initially be targeting a copper and gold mineralisation with grades of up to three per cent copper and 5.9 g/t gold that has been mapped over an area of 3x2 kilometres.

“The Cascabel property demonstrates all the features that we would like to see in an early stage gold-copper porphyry project, and to partner with a highly respected company such as Cornerstone enhances the probability of success,” said chief executive of Solomon Gold Malcolm Norris.

Gold-Copper Opportunities

Solomon Gold is undertaking a comprehensive review of new gold-copper opportunities in the southeast Australasian region and in Central and South America.

The company recently acquired three new early stage exploration properties with low minimum spend requirements in the Solomon Islands.

The licences, which span 389 square kilometres, have returned encouraging gold geochemical and geological results, including anomalous gold from stream sediment sampling, during early stage exploration.

Solomon Gold (LON:SOLG) has acquired three new early stage exploration properties in the Solomon Islands.

It bought Honiara Holdings Pty Ltd, which owns the properties, for A$50,000. According to Solomon, the licences have low minimum spending requirements.

The prospecting licences span a 389 square kilometre area. The company says that early stage exploration has already been completed and it returned encouraging results.

Solomon’s exploration team plans to follow up the initial work during the second quarter of this year.

The company owns a portfolio of exploration assets in the Solomon Islands and in Australia, they are a mix of wholly owned projects and joint ventures.

At Rannes project in Queensland, one of the more advanced project’s in the portfolio, a new resource estimate is expected in the coming weeks.

It will follow the last estimate, in November 2011, which took the resource to 812,000 ounces of gold equivalent.  Solomon has a 2 million ounce target for the project.

The group is also exploring for gold on the Solomon’s Fauro and Guadalcanal islands. 

2012 Exploration Program

Exploration work in the Rannes Project area in 2012 will include:

- Further resource drilling at Kauffmans and Crunchie;
- Drilling at Double Scoop and Porcupine and addition of these to the resource inventory;
- Drill testing of the multitude of surface anomalies in the vicinity of the main prospects; and
- Exploration throughout the 30 kilometre long belt, comprising additional soil sampling and geophysical surveys to define additional targets for drilling.

The breakdown of the resource is 25.5 million tonnes at 1.0g/t gold equivalent for 812,307 ounces of contained gold equivalent (486,935 gold ounces and 13.01 million silver ounces).

Importantly, the resources are all close to or at surface which may potentially lead to a low stripping ratio at Rannes.

Solomon's share price shot up around 50% overnight after it unveiled the upgrade to the market.

Highlighting how quickly Solomon is moving the project forward, the latest upgrade follows hot on the heels of the September upgrade, which boosted ounces by 24%.

Drilling at Rannes continues at Kauffmans, Crunchie , Shilo, Double Scoop and Nicks Prospects, with a total project-to-date discovery cost just A$6.70 per ounce.

Malcolm Norris, chief executive, commented “The board is highly encouraged by today’s further resource estimate upgrade.

"Exploration also continues at the 21 other nearby prospects, which have been identified in the Rannes Project area, with the aim of delivering the company’s objective of defining two million ounces of gold equivalent."

The project is located around 150 kilometres west of the major central Queensland port city of Gladstone.

Meanwhile it says that drilling continues at the project towards a 2 million ounce target. Rannes is found in central Queensland, Australia.

"The board is highly encouraged by today's resource estimate upgrade,” said chief executive Malcolm Norris.

“Drilling continues at the Kauffmans, Crunchie, Shilo, Double Scoop and Nicks prospects with shallow, percussion drilling and deeper diamond drilling. 

“Exploration also continues at the 21 other nearby prospects, which have been identified in the Rannes project area, with the AIM of delivering the company's objective of defining two million ounces of gold equivalent.”

Solomon reported that the Rannes gold resource has been increased from 675,779 to 812,000 ounces.

The project’s total inferred mineral resource is now estimated at 25.5 million tonnes grading 1.0 grams per tonne gold equivalent. The upgrade included an extra 102,000 ounces at the Kauffmans prospect and an additional 34,000 ounces at the Crunchie prospect.

It said that the additional resource ounces are associated with deeper resources from a number of good intersections at depth.  

Solomon added that the mineralisation component remains open at depth, to the north, east and south. And drilling in the deepest hole has still only tested to a depth of 240 metres below surface, it added. 

Solomon said that its total discovery cost to date is A$6.70 an ounce. Additionally it explained that the project may potentially have a low stripping ratio because the resources are all close to or at surface.

In today’s statement chief executive Malcolm Norris also highlighted that Nick Mather continues to play an active role in the company.

"The board is also delighted that Nick Mather, who stepped across from his former role as CEO to executive director in October this year, remains fully involved with the day-to-day running of the company,” he said.

“With Nick's knowledge and support, the team look forward to driving towards the stated target of 2 million ounce gold equivalent in inferred resources at Rannes, and in contributing to the strategic direction of Solomon Gold and assessing growth opportunities for the company."

At 13:00 on AIM Solomon Gold shares were up 3.375p, or 38 per cent, trading at 12.25p each.

Resources currently defined at Crunchie, Kauffmans, Brother and Cracklin Rosie Prospects should be amenable to open-pit mining and processing in a central plant, subject to the outcomes of a feasibility study, the group added.

The bank said that recent drill results at its Rannes project in Queensland demonstrate that the firm can build up gold resources here and at other sites nearby.

Meanwhile, the Solomon Islands – where drilling at the firm’s Fauro 100% owned Fauro project shows mineralisation with multi-million dollar potential – is “highly prospective for gold and any significant find would be transformational”, said Fairfax.

At Guadalcanal in the Solomon Islands, a joint venture agreement with Newmont Mining “has potential for substantial discovery”, said the bank.

Newmont, which has the right to earn 51% by spending US$6 million over three years and 70% by spending US$12 million over six years, is attempting to identify a mineralised system that contains multimillion ounce gold potential.

Fairfax said that it was using Solomon’s 100% owned Rannes project as a floor to its valuation of the company.

“Applying a simply US$100 per ounce valuation on the gold prospect in Rannes of 543,858 ounces of gold equivalent, we get US$54 million for the project or £0.12 per share.” it said.

“If Rannes grows to the two million ounce target, then our valuation could grow substantially from here.”

Fairfax said that Mount Perry, Solomon’s other 100% owned project in Queensland, could show similar value to Rannes, while Fauro and Guadalcanal potentially could be worth US$22 million and US$17 million to the company.

Taking these figures into account, Fairfax has set a price target for the shares of £0.32.

Solomon’s shares last traded at around half this target.

The bank said that recent drill results at its Rannes project in Queensland demonstrate that the firm can build up gold resources here and at other sites nearby. Meanwhile, the Solomon Islands – where drilling at the firm’s Fauro 100 per cent-owned Fauro project shows mineralisation with multi-million dollar potential – is “highly prospective for gold and any significant find would be transformational”, said Fairfax.

At Guadalcanal in the Solomon Islands, a joint venture agreement with Newmont Mining “has potential for substantial discovery”, said the bank. Newmont, which has the right to earn 51 per cent by spending US$6 million over three years and 70 per cent by spending US$12 million over six years, is attempting to identify a mineralised system that contains multimillion ounce gold potential.

Fairfax said that it was using Solomon’s 100 per cent-owned Rannes project as a floor to its valuation of the company. “Applying a simply US$100 per ounce valuation on the gold prospect in Rannes of 543,858 ounces of gold equivalent, we get US$54 million for the project or 12 pence per share,” it said. “If Rannes grows to the two million ounce target, then our valuation could grow substantially from here.”

Fairfax said that Mount Perry, Solomon’s other 100 per cent-owned project in Queensland, could show similar value to Rannes, while Fauro and Guadalcanal potentially could be worth US$22 million and US$17 million to the company.

Taking these figures into account, Fairfax has set a price target for the shares of 32 pence.

At lunchtime today, Solomon’s shares were trading 1.2 per cent lower at 16.05 pence each.

Shares in Solomon Gold (LON: SOLG) spiked 11 per cent in early trade after the group revealed some encouraging early results from the Mbetilonga Project on the Solomon Islands.

The highlights included a 24 metre section from drill hole MBT001 that returned 0.23 per cent copper and a 46 metre section from MBT002 containing 0.25 per cent copper. 

This second hole on the Vuanimaho Prospect also returned 0.34 grams per tonne of gold.

The update was provided by a subsidiary of Newmont Mining, Solomon’s partner in the Guadalcanal Joint Venture.

It revealed that a new porphyry target is emerging at the Hahala Prospect, in the western section Mbetilonga.

“Frequent sampling results of one per cent copper, up to a maximum of 22.8 per cent copper have been returned,” Solomon said today.

Separately, drilling has been completed and assay results are pending for MBT003 and MBT004 holes at the Havehahala Prospect, while drilling continues on MBT005.

At 10.15 am the shares were changing hands at 20.7 pence, up 2.08 pence, and in the past year the stock is up almost 230 per cent.

The main catalyst for that share price movement has been the Fauro Island project, which was fast-tracked last October following a £15 million City fundraiser.

Solomon believes Fauro has the potential to host a world class gold deposit, similar to the massive Lihir mine, which holds one of the world's largest gold resources.

This morning the company announced a resource upgrade for the Rannes project, taking the resource a fifth of the way to its 2 million ounce target.

It announced a maiden 203,000 ounce gold resource for the Kauffmans prospect. The total resource at the Rannes project - which comprises a series of prospects in central Queensland - has almost doubled to 404,000 ounces.

“Today’s resource announcement is a substantial step forward and marks the potential for economic mine development,” Fairfax analyst John Meyer said in a note to clients. 

“Investors are now seeing strong progress both in Australia and in the Solomon Islands with the promise of more to come.”  

In the Solomon Islands the company has a number of projects, the most advanced are the joint venture with Newmont Mining (NYSE:NEM) on Guadalcanal and its wholly-owned exploration project on Fauro Island.

With a particularly bullish take on Solomon’s ongoing development Meyer said: “While many explorers are slow to progress a rare few appear to make progress on all fronts. We wonder if the team at Solomon ever sleep when looking at the results and progress being made.” 

Meyer adds: “If every exploration company was as driven as Solomon Gold then the world might not suffer commodity shortages and there would be much less opportunity for investors.”

Indeed the company has a very busy calendar at the moment.

On Guadalcanal Newmont kicked off a new drill programme earlier this month. The programme will include 5,600 metres of drilling and it will cost Newmont, who is earning into a 70 percent stake, around US$6 million.

Meanwhile at Fauro, the project that sparked a 100-plus percent spike to the shares on surface sampling results last year, a 9,900 metre drill programme is also underway. Early drill results from the first hole have already confirmed a down-dip extension of gold-bearing veins that were outcropping in surface trenching.

Now following this morning’s resource update Solomon plans to carry-out geophysical surveys at Kauffmans to select near-term drill targets.

The Rannes project is made up of three main areas: Rannes Central, Police Camp Creek and Brother & Cooper. 

The Crunchie, Homestead and Kauffmans prospects are more advanced parts of the Central Rannes area, which also includes the Cracklin Rosie and Porcupine Pie prospects.

“Step-out drilling from known gold mineralised zones, are planned with a view to increasing the resource in the Central Rannes Area. Porcupine Pie, Crackling Rosie and Shilo are the prime new resource targets,” Nicholas Mather said.

At Kauffmans, Solomon has now defined an inferred mineral resource of 7.7 million tonnes grading 0.82 grams per tonne gold equivalent, for 203,000 of contained gold equivalent. Furthermore it highlights that there are multiple prospects that are in close proximity to Kauffmans that provide ‘excellent potential’ for a significant expansion to the existing resource.

“The Kauffmans prospect should be mineable by open cast making the mining simpler and it is possible that a strike length of some 1.5km may emerge if mineralisation joins with Homestead and Shilo gold prospects nearby,” Meyer said.

“Management are targeting an ambitious 2 million ounces resource within the Rannes prospect area which if economically mineable could transform the company from explorer to miner within relatively short order.”

The analyst rates Solomon as a ‘buy’, although with so many moving parts he said it is difficult to give the company a formal valuation.

Meyer told Proactive Investors that he believes the new Kauffmans resource is worth around US$20 million at this stage, by giving a US$100 an ounce for the 203,000 inferred ounces of gold - although he acknowledged that this may be a slightly forward looking. 

This morning the shares gained a modest 1 penny a share, about 3.6 percent, to trade at 28.75 pence a share. At this level the entire company is worth just over £81 million.

The new Kauffmans resource doubles Rannes’ total inferred resource to 404,000 ounces.

Kauffmans form parts of a cluster of prospects within 5 kilometres of the Crunchie project – which are collectively known as the Rannes project. Solomon reported a 201,648 ounces gold equivalent maiden resource at Crunchie back in June 2010.

At Kauffmans it has now defined an inferred mineral resource of 7.7 million tonnes grading 0.82 grams per tonne gold equivalent, for 203,000 of contained gold equivalent.

Furthermore it highlights that there are multiple prospects that are in close proximity to Kauffmans that provide ‘excellent potential’ for a significant expansion to the existing resource.

By 10:00 am the shares gained 1 penny, about 3.6 percent, to trade at 28.75 pence a share.

Solomon aims to expand the Rannes resource to at least 2 million ounces.

The Rannes project is made up of three main areas: Rannes Central, Police Camp Creek and Brother & Cooper. 

The Crunchie, Homestead, Kauffmans prospects are more advanced parts of the Central Rannes area, which also includes the Cracklin Rosie and Porcupine Pie prospects.

“With the upgraded Inferred Resource at Crunchie, the total Inferred Resource for Rannes has doubled and is now 404,000 ounces,” Nicholas Mather said.

He adds: “The trend of increasing gold grade and gold to silver ratio with depth as evident at Cracklin Rosie, and in the quartz and carbonate veins seen at Kauffmans-Homestead, will drive exploration in deeper drilling below 200 metres.

“The company plans to undertake further geophysical surveys to identify additional epithermal vein mineralisation at depth which will be drill tested in the near term.

“Step-out drilling from known gold mineralised zones, are planned with a view to increasing the resource in the Central Rannes Area. Porcupine Pie, Crackling Rosie and Shilo are the prime new resource targets.”

This is the project that sparked a 100-plus percent spike to the shares after encouraging surface sampling last year. Solomon is now carrying out a more extensive exploration programme with a 9,900 metre drilling campaign.

The first hole, tagged FDDH001, was drilled to 625 metres on Fauro’s Meriguna prospect. Solomon already has assays for the first 83 metres. 

At a depth of 28 metres the hole cut 10 metres grading 2.93 grams per tonne gold including 1 metre with 24.7 grams per tonne. Then at 60 metres the hole intersected 6 metres grading 1.1 grams per tonne gold.

Solomon said the hole was targeting sub-surface extensions of the high grade gold seen in surface trench results.

Although the rest of the assays are still pending Solomon highlighted that it intersected the down-dip extension of gold-bearing veins, which were outcropping in surface trenching, near the bottom of the hole around 600 metres, as expected.  

“(We are) encouraged by the mineralisation and alteration patterns diagnostic of porphyry systems, seen in the core from FDDH001,” chief executive Nicholas Mather said.

“The gold results coincide with elevated concentrations of copper, zinc, mercury and tellurium. The elevated mercury and tellurium are considered typical of high level veins and suggests that the boiling zone where higher gold grades are expected, is deeper.”  

Solomon is now drilling the second hole in the programme, and it awaits the assay results for the remaining 542 metres of FDDH001.

Meanwhile it has also begun a geophysical survey - inverse polarisation (IP) - over the prospects on the Fauro licence area. 

The survey will cover 11 square kilometres, exploring all the prospects that Solomon has identified as ‘electromagnetic anomalies’ - Ballyorlo, Kiovakase, Meriguna, Bataha, Ballteara and Northern Fauro.

It will survey the Ballyorlo prospect first, with the aim to define drill targets. Solomon plans to drill the first hole at Ballyorlo once it has complete three hole at Meriguna.

Previously surface sampling has shown encouraging copper and molybdenum results, plus gold credits. Among 57 samples, the best copper result was 0.20 percent and the best molybdenum result 0.43 percent, while Gold in soils peaked at 3.1 grams per tonne.

The programme will include 5,600 metres of drilling and it will cost Newmont, who is earning into a 70 percent stake, around US$6 million.

Additionally Solomon revealed that rock chip samples from the Mbetilonga project on Guadalcanal returned high grade copper and gold results.  The samples came from the Kolokepi and Ngalimane prospects.

“The best copper result was 40.7 percent, the best gold result was 159 grams per tonne and the best silver result was 1,190 grams per tonne.  2,510 parts per million molybdenum was found in one sample,” chief executive Nicholas Mather said.

He adds: “The Mbetilonga project is highly regarded and exhibits numerous areas of very high copper and gold mineralisation coincident with porphyry style magnetic signatures.”

Newmont has been drilling on the Mbetilonga project area since January 2011. Its first hole is testing the Vuanimaho prospect and it is currently being drilled at a depth of 400 metres.

“The Vuanimaho, Kolokepi and Ngalimane prospects lie in the eastern corridor, a 3 kilometre long zone of highly altered and mineralised rocks on the eastern side of Mbetilonga,” Mather said.

The partners have also been drilling at the Chikora prospect in Guadalcanal’s Koloula Valley. A drill programme began therer in August 2010 and this morning Solomon revealed some of the results.

Results from the first two drill holes include 152 metres at 0.25 percent copper and 135 metres at 0.25 percent copper. Furthermore the company said that it now has a new geological interpretation of Chikora.

“The Chikora mineralised system now appears to be defined laterally with the causative porphyry intrusion postulated at depth ...  The further work program for Chikora has not yet been finalised,” Mather said.

He adds: “The 2011 work program presented by Newmont will be focused on drill testing the porphyry and epithermal copper gold targets at Mbetilonga, and the porphyry and skarn targets at Sutakiki.  

“Field work will be conducted to advance the Kuma projects, and a prospectivity assessment of the Central project will be made by reconnaissance BLEG sampling.  

“In addition, interpretation of the Chikora/Levisivisi data will be finalised and a minor field mapping program may be undertaken at the Mbina prospect.”