Solomon Gold (LON:SOLG) told investors that Newmont Mining Corporation (NYSE:NEM) has decided to proceed to the second phase of the Guadalcanal joint venture.
The mining major has now spent US$8.4 million – exceeding the US$6 million threshold for the Phase 1 earn-in - on the JV and as a result it has now earned its 51 percent stake in the project.
Notably Newmont has reached this milestone earlier than required under the JV agreement, signed in March 2009.
Newmont now has another 2 years to take its total spend up to US$12 million in Phase 2, so it can earn the full 70 percent stake in the project. However it expects to achieve this by the year’s end. It has a US$6.04 million budget for 2011’s work programme on Guadalcanal.
Work is currently focused on the Vuanimaho porphyry targets and several prospects within the Mbetilonga tenement, with Newmont drilling on the former while it is mapping and sampling the latter. The 2011 budgeted work programme includes 5,600 metres of drill, 3,500 metre of this will be carried out on Mbetilonga.
At Vuanimaho Newmont said it has encountered alteration, magnetite, silica veining and sulphide contents that were increasing at depth in the two holes drilled so far. Core samples have been sent for assay.
Meanwhile in the ‘eastern corridor’ between the Kolokepi and Vuanimaho areas of the project Newmont has found extensive strong copper arsenic and gold mineralisation, in rock chip and soil samples. Near Ngalimane Creek rock chip samples had up to 159 grams per tonne gold, 1,200 part per million silver, and 40 percent copper, which according to Newmont indicates a high sulphidation system related to an intrusive source.
Also it said that it found up to 2,500 parts per million molybdenum with strong gold and copper. It is strongly indicative of an intrusive porphyry copper molybdenum gold source.
It has modelled a strong magnetic anomaly at Ngalimane, it said it was a pipe like structure and it is interpreted to be a porphyry.
Elsewhere it found ‘curved magnetic anomalies’ at Havehahala, which are interpreted to be skarn targets.
An induced polarisation (IP) survey is currently underway and early results indicate structural features coincident with the strongly anomalous copper gold arsenic soil samples in the Eastern corridor. As well as an ‘electrically chargeable body coincident with strong electromagnetic conductor’ west of Vuralamgomma, which it is interpreting as a zone of sulphide mineralisation in a clay filled shear zone.
It is continuing to test a 11 square kilometre zone in eastern Mbetilonga using IP. Additionally it said that mapping and sampling continues to define new drill targets into the Hambusimaloso and Vatuchichi areas.
UK broker Fairfax said in its 'Morning View' report that it views the latest sampling results as good news and is look forward to further progress on the Guadalcanal joint venture.
"The consistent reporting of very high grade samples from the Solomon Islands indicates the region’s prospective potential. Ongoing drilling at Fauro on the Meriguna prospect could start to give the company tangible value," the broker added.