Australian Solomons Gold Limited
TSX : SGA

Australian Solomons Gold Limited

October 08, 2009 08:30 ET

Australian Solomons Gold: Charivunga Gorge Exploration Supports Conceptual Super Pit Mining Scenario

TORONTO, ONTARIO--(Marketwire - Oct. 8, 2009) -

THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Australian Solomons Gold Limited ("ASG" or the "Company") (TSX:SGA) is pleased to announce the completion of the 4-hole drilling program at Charivunga Gorge, to further test for potential open-cut deposits. Although assays are yet to be received visual and geological logging of each of the holes has provided more confidence of the open-cut potential of the Charivunga Mineralised Zone ("CMZ"). Highlights include visible gold in two of the four holes, most notably in the final hole where significant grades are expected.

As can be seen from the diagram below, the mineralisation intersected in the current drilling program is well outside the current pit designs. A "Super Pit" in this region alone would add significantly to the mineable resource, encompassing the known resources in Namachamata and Kupers, the deeper Charivunga Gorge mineralisation and this most recent discovery. The internal study aimed at seeing whether a "Super Pit" concept could be applied at Gold Ridge continues and is gathering increased validity.

Charivunga Gorge Open Pit Potential - Exploration Program August – October 2009

The drilling program designed to evaluate the Charivunga Gorge Open Pit potential has been completed and geological logging has recognised excellent mineralogy, most notably in the final hole of the program (DDH180) where abundant visible gold was observed in a 1m intersection (see photo below) amongst a much wider mineralised zone. All the holes showed consistent altered zones containing varying amounts of sulphides and continuing over good widths. A more detailed geological description of each hole is below along with a diagram showing the most recent hole locations, the currently proposed open pit outlines and the deeper Charivunga Gorge Mineralised Zone.

All the indicators lead us to conclude that there are significant mineralised zones outside of the currently proposed open cuts and recognised resource.

The first hole in the program (DDH177), located 50m south and 180m east of DDH178, intersected a strong argillic altered volcanoclastic sequence with abundant , disseminated pyrite, and minor quartz-carbonate-base metal sulphide +/- visible Au veining from the surface to a depth of 70m. Further zones of disseminated sulphide mineralisation and argillic alteration were reported down hole.

The second hole in the program, DDH178, intersected a sequence of weakly altered and mineralised volcanoclastics intercalated with numerous fine grained tuffaceous horizons. The five fault zones identified are more strongly mineralised with up to 3% disseminated pyrite. Due to access constraints this hole was collared 50m west of the planned location and may have missed the target mineralised zone.

The third hole in the program, DDH179 was collared on the west side of Charivunga Gorge 100m north and 50m east of DDH178. The hole intersected a sequence of volcanic breccia with intercalated lapilli tuff and minor siltsone. Strong argillic alteration with co-incident strong disseminated sulphide (pyrite) mineralisation was noted at 56 – 61m, 85 – 100m and 104 – 177m. The remainder of the hole exhibited propylitic alteration with weak sulphide mineralisation (pyrite to 0.5%). Numerous faults / fractures were observed, mainly within the argillic alteration zones, often containing up to 5% disseminated fine grained pyrite.

The last hole of the program, DDH180, was collared on the west side of Charivunga Gorge, 50m south west of the planned Namachamata Pit. Due to access issues the actual collar location was 45m west and 45m north of the planned location and in order to intersect the target zone, the hole was drilled vertically. The hole intersected a sequence of hydrothermal collapse breccia (0 – 22m), and volcanic breccia with intercalated tuff and minor bedded siltstone (22m – EOH). Strong disseminated sulphide mineralisation (3 – 5% pyrite) is present to 255m. The collapse breccia intersected 0-22m displays strong argillic alteration and intense fracturing. Further moderate to intense argillic alteration zones are present in the vicinity of fractures and faults to 255m. Visible gold (21 fine grains) was noted in near vertical quartz-pyrite veins from 195-196m.

To view an image of "Identification of visible gold noted in DDH 180", please visit the link below:

http://media3.marketwire.com/docs/ddh_180.pdf

To view a map of "Charivunga Mineralised Zone", please visit the link below:

http://media3.marketwire.com/docs/namach_map.pdf

Qualified Person

The Technical and scientific information contained in this news release was reviewed by Tony Field, BSc Geology, ASG's Exploration Manager and the Qualified Person as defined by National Instrument 43-101 of the Canadian Securities Administrators responsible for the exploration program.

About ASG

ASG is developing the Gold Ridge Project, a former producing mine, located on Guadalcanal in the Solomon Islands. The mine operated from August 1998 to June 2000 and produced approximately 210,000oz gold during this period. ASG acquired the project in May 2005 and has completed a Feasibility Study to redevelop the Gold Ridge Project. ASG is currently working on finalising the financing plan in preparation for this redevelopment task. ASG is currently working on finalising the financing plan in preparation for this redevelopment task and is expected to commence operations during Q1 2011. The Gold Ridge Project has a Measured and Indicated Resource base of 1.6 million ounces with an Inferred category of a further 0.5 million ounces. On September 17, 2009 ASG announced that Allied Gold Limited ("Allied Gold") will make an agreed off-market takeover offer for all the shares of ASG (the "Offer"). The Offer was made on October 2, 2009. ASG shareholders who accept the Offer will receive 0.85 Allied Gold shares for every share of ASG held. The Offer remains subject to certain conditions and there is no certainty that the Offer will be successful. Full details of the Offer are contained in a Bidder's Statement and Offer to Purchase which has been filed on ASG's profile on www.sedar.com.

Cautionary Statement Regarding Forward-Looking Information

All statements, trend analysis and other information contained in this press release relative to markets for ASG's trends in resources, recoveries, production and anticipated expense levels, as well as other statements about anticipated future events or results constitute forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect" and "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions. Forward-looking statements are subject to business and economic risks and uncertainties and other factors that could cause actual results of operations to differ materially from those contained in the forward-looking statements. Forward-looking statements are based on estimates and opinions of management at the date the statements are made. Some of these risks, uncertainties and other factors are described under the heading "Risk Factors" in the Company's annual information form available on www.sedar.com. ASG does not undertake any obligation to update forward-looking statements even if circumstances or management's estimates or opinions should change. Investors should not place undue reliance on forward-looking statements.

ABN 96 109 492 373

The Toronto Stock Exchange has neither approved nor disapproved the contents of this press release.

Contact Information

  • ASG:
    David Roach
    Chief Executive Officer
    (617) 3624-9000
    Email: David.Roach @solomonsgold.com.au
    or
    Investor Relations:
    Rebecca Greco
    ASG Investor Relations Manager, Toronto
    (416) 839 8610
    Email: Rebecca.Greco@solomonsgold.com.au