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
2 December 2019
Erris Resources plc ("Erris Resources" or the "Company")
Update re Scandinavian gold portfolio and strategic alliance with Centerra Gold
Erris Resources plc, the European focused mineral exploration company with a portfolio of zinc and base metals projects in Ireland and gold projects in Sweden, Finland and Norway, provides an update on its Scandinavian gold portfolio as well as its strategic alliance with Centerra Gold Inc. ("Centerra Gold").
· Centerra Gold terminates its strategic alliance with Erris Resources after almost four years
· Erris Resources remains focused on identifying consulting and exploration partners to advance projects which it believes represent good opportunities for discovery of economic resources
· Erris Resources continues its strategy to generate new targets, apply for 100%-owned permits and carry out cost effective field work to advance projects
· Erris Resources maintains a robust balance sheet with circa €1.6 million cash held at the end of November 2019
Erris Resources CEO, Anton du Plessis, said, "Erris Resources is grateful for the consulting and exploration partnership with Centerra Gold over the past four years, which from our experience is a typical duration for such joint ventures. While we are disappointed that it has ended, we will continue to pursue this type of partnership with other mining partners having demonstrated our consulting expertise in delivering cost-effective exploration.
"Erris Resources retains a portfolio of 100%-owned prospective gold projects in Sweden, Finland and Norway, which it will seek to advance with new partners. These projects include Brännberg in Sweden and Gautelis in Norway with historic drilled gold mineralisation in carbonates."
Centerra Gold Strategic Alliance
Erris Resources and Centerra Gold signed a strategic alliance agreement on 1 January 2016 to explore for gold in Sweden and subsequently expanded into Finland in 2019. Centerra Gold funded generative exploration on more than 30 exploration permits and drilling on three designated projects between January 2016 and November 2019. During this time, the total expenditure on Centerra Gold projects was approximately US$3.4M on which Erris Resources earned consultancy fees of 10% for managing this exploration work. The work resulted in the discovery of several new mineralised zones in outcrop and some significant intersections in drilling. However, drilling did not outline exploration targets meeting the minimum criteria for Centerra Gold to continue funding. In addition, Erris Resources and Centerra Gold reviewed several third party opportunities, however, none were attractive to either party while prospective ground in Finland is tightly held making new applications difficult.
Erris Resources has been informed by Centerra Gold that the strategic alliance agreement has been terminated and consequently funding for generative exploration will cease, the Sakiatieva Project in Finland will not be elected a designated project area ("DPA") and no further expenditure will be made in respect of previously elected DPAs. As of the date of this announcement, Centerra Gold will no longer have any interest in permits held by Erris Resources or its subsidiaries.
Scandinavian Gold Portfolio
Erris Resources retains 100% of several exploration permits in Sweden and Norway and two reservation permits in Finland. The assets include the Brännberg project located in the Skellefte Mining District of North Sweden, which has some significant gold intersections. The drilling funded by Centerra Gold in 2018 outlined a zone of gold mineralisation over 150m of strike which is open at depth with an intersection of 17.2m @ 1.93g/t Au and 0.26% Cu from 160.90m-178.10m in hole BB004. In total, 14 holes for a total of 2,681m were drilled on the project by Erris Resources and fully funded by Centerra Gold. In addition, an IP Survey of 15 line kilometres and 71 line kilometres of ground magnetic data were collected. The significant investment in the project has outlined targets, which remain to be tested and Erris Resources will seek a partner to advance the project.
At the recently acquired Gautelis permit in northern Norway (see announcement dated 9 October 2019), several mineralised occurrences are known including intersections in carbonates of 3m grading 6.66g/t Au from 50-53m and 3m grading 3.3 g/t Au from 44-47m in hole 2-85. The upper 26m of hole 4-84 returned 26m grading 0.58 g/t Au suggesting potential for broad zones of mineralisation in the carbonates. During a ground truthing visit, Erris Resources confirmed the location of several drill collars and took ten rock samples. Results from the samples include 5.7g/t Au from arsenopyrite-rich mineralisation adjacent to the portal of a small historic arsenic mine. A sample of chips from various pieces of dump material outside the mine returned 2.7g/t Au. A sample of schist with pyritic stringers taken 900m south of the historic mine returned 9.7g/t Au while a sample of gossanous bedrock 2.3km to the northeast returned 2.2g/t. Four other samples returned between 18 and 55ppb Au with only two samples returning non-detectable gold.
Results from initial samples taken at the Mauken Project in Northern Norway were disappointing and therefore the permit will be surrendered. Erris Resources will continue to generate new targets, apply for 100%-owned permits and carry out cost effective field work to advance projects. Subsequent work will focus on the most prospective targets with discovery potential in order to build a portfolio of high-quality gold projects.
Erris Resources will continue to market this portfolio to other parties in order to identify new partners to advance the projects. Erris believes that these projects represent good opportunities for discovery of economic resources with further work warranted.
At the end of November, the Company held approximately €1.6 million in cash and maintains a disciplined approach to expenditure on its 100%-owned projects. The Scandinavian gold portfolio has a low holding cost and prospective permits due for renewal in 2020 will be renewed. The Board and Management continue to actively 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
Andy Thacker/Zoe Alexander
Turner Pope Investments (TPI) Ltd (Joint Broker)
+44 (0) 20 3657 0050
Isabel de Salis / Beth Melluish
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.