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Regency Mines to test nickel and gold targets at Lake Johnstone, exploration costs expected at US$0.5 million

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Copper and nickel explorer Regency Mines (AIM: RGM) has commenced detailed planning of an exploration programme in the Lake Johnstone greenstone belt in Western Australia, to test nickel and gold targets based on the results of a SkyTEM aeromagnetic survey carried out in 2008.

The programme will test nickel targets along the magnetic anomaly and gold/base metal targets, starting in January with a ground electromagnetic (EM) geophysical survey to further define the target zone.

This will then be followed by a 4,000m (metre) stage 1 drilling programme in February and a 2,000m stage 2 infill drilling programme in March, to be followed by a 2,000m stage 3 reverse circulation drill programme with EM geophysics in April to test the deeper targets, depending on the results of the previous programmes.

The whole programme is expected to cost US$0.5 million.

The area of the Southern Yilgarn hosts many substantial nickel and gold deposits, but much of the exploration has been concentrated to the west and apart from the Emily Ann and Maggie Hays nickel sulphide deposits to the north, the Lake Johnstone belt has been largely unexplored.

To the north of the drilled area, at Lake Tay, anomalous uranium was recorded during the survey, and the ground is considered highly prospective for gypsum.

Field reconnaissance and sampling programmes for these two commodities will be carried out in tandem with the exploration programme at Area 4.

The company has also said that it has continued to advance work on the Direct Nickel joint venture (JV) project at Botue-Mambare in Papua New Guinea with completion of an independent geological report and imminent completion of an independent technical report, in preparation for listing of the JV assets.

Lake Johnstone is located 600 km (kilometres) away from the Tropicana gold project of AngloGold Ashanti (LSE, ASX: AGG; NYSE: AU), which has a 5.01 Moz (million ounces) gold resource. The Mt Gordon and Tay project comprises two contiguous exploration licences of E63/861 and E63/876 that cover a total of 129 sq km (square kilometres) in the south of the Lake Johnston greenstone belt. Exploration within the Tay drill testing of a number of these anomalies intersected sulphide (pyrite and pyrrhotite) mineralisation, returning intervals including 1m grading at 2.97 g/t (grammes per tonne) of gold.

Results of soil sampling located several gold anomalies to the north of the current Mt Gordon project area, where drilling also outlined an inferred vanadium resource, situated 3 km northwest of the Mt Gordon tenement, of 16Mt (million tonnes) grading 12% titanium, 0.8% vanadium, hosted by the Medcalf Sill.

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Price: 2.85 GBX

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