Agricola Resources plc
LSE : AGRI

June 12, 2008 03:00 ET

INTERSECTS COPPER-GOLD MINERALISATION IN DIAMOND DRILLING

                                                   
                                                   
                                                                                            12/06/2008
                                                   
                                                   
                                                                             GB0003046835/GBP/PLUS-exn
                                                   
                                                   
                                                   
                      AGRICOLA INTERSECTS COPPER-GOLD MINERALISATION IN DIAMOND DRILLING
                                   AT THE BALLEK JOINT VENTURE, SWEDEN
                                                   


   SUMMARY:

   *       Agricola Resources plc has obtained archive data which shows that historical drilling from
        the Lulepotten  deposit  in  the Ballek Copper-Gold-Uranium Joint contains  zones  of  copper
        -gold mineralisation that may have sufficient grade and width to be amenable to economic 
        extraction through underground bulk mining.
   
   *        Agricola  has also released assay results from recent diamond drilling that tested  nearby
        geophysical targets on the Ballek Project.
        
   *        The best assay in Agricola's drilling is from drill hole BAL0003 where a 12m zone averaged
        0.34% Cu and 1.40 g/t Au, including a 3m zone containing 0.94% Cu and 4.41 g/t Au.

        This mineralisation is considered to be similar to Lulepotten which is approximately 2km along
        strike from BAL0003. The mineralisation consists of fracture-hosted copper sulphides and gold
        within hydrothermally altered meta-volcanic rocks.
        
   *        Agricola  plans to undertake further drilling along the Lulepotten mineralised trend in
        preparation of an initial resource estimate consistent with the standards set out under JORC
        classification.
   
   *        Agricola Resources is earning a 51% interest in the Ballek JV from Beowulf Mining plc by
        completing an agreed work programme of ground geophysics and drilling by December 2008, and can
        increase this to a 70% interest through an additional USD $500,000 exploration expenditure.
        

Ballek JV Exploration Update

The  directors of Agricola Resources have advised that the initial diamond drill testing  of  multiple
geophysical targets at the Ballek Copper-Gold-Uranium joint venture project in the  municipality  of
Arjeplog, Northern Sweden (See www.agricolaresources.com Figure 1) has been  completed. A program
comprising four diamond drill holes for a total of 1,617m drilling has intersected significant copper-
gold mineralisation in two of these holes. These intersections are apparently similar to the style of
mineralisation known at the nearby Lulepotten Copper-Gold deposit, where previously completed drilling
by the Geological Survey of Sweden (SGU) defined a zone of copper sulphide mineralisation locally in
excess of 20m true thickness and over a strike length in excess of 1,000m. The Lulepotten deposit is
also located on the Ballek JV exploration licences that Agricola is currently earning a 51% interest 
in.

Project Overview

The Ballek Copper-Gold-Uranium joint venture project contains a large regional gravity anomaly and  an
associated magnetic anomaly detected by airborne geophysical surveying (Figure 2). Three dimensional
inversion modelling of the gravity and magnetic data by Agricola confirmed a series of three-
dimensionally co-incident mass (gravity) and magnetic anomalies. Field inspection of limited outcrop
close to these anomalies identified andesitic volcanic rocks with widespread epidote  and  magnetite
alteration, and locally marked by the presence of blebs and veinlets of copper sulphides (chalcopyrite
and  bornite). Inspection of historical drill core from the Lulepotten Copper-Gold deposit, which
occurs  along strike from one of the geophysical anomalies, identified veins and narrow zones of
magnetite-actinolite-chalcopyrite breccias. These geophysical and geological observations are
consistent with iron-oxide copper-gold ("IOCG") styles of mineralisation similar to those found in the
Cloncurry District of Queensland in Australia (e.g. Ernest Henry mine).

Lulepotten Copper-Gold Deposit

The  Lulepotten Copper-Gold deposit occurs along the contact between a granitoid and a package of
intercalated mafic to felsic meta-volcanic rocks and is located on the Ballek JV exploration licences
that Agricola is currently earning a 51% interest in (see website Figures 2 and 3). The host rocks are
strongly foliated, and the mineralised zone apparently follows the local schistosity which strikes
SW-NE and dips steeply to the NW. Sulphide mineralisation within the deposit comprises a zone of
steeply dipping veinlets and disseminated chalcopyrite plus bornite, with lesser chalcocite and
pyrite. The observed alteration and mineralisation assemblages are considered to be consistent with
iron-oxide copper-gold ("IOCG") styles of mineralisation.

During the period 1960 to 1971, 77 diamond drill holes were completed in the SW part of the project
area for approximately 17,500m of drilling on a nominal 40m by 40m grid spacing. These drill  holes,
which are currently stored at the SGC core archive in Malå, tested the deposit to a maximum depth of
about 200m below surface, and over a strike length of about 500m (see  website  Figure 3,4).
Historical assay results which have been located in the SGU archives (see website for cross sections
in Figure 5 and Figure 6), suggest that the mineralisation locally has sufficient width, grade and
continuity to have potential as an underground bulk mining target.

Results of Agricola Drilling

A reconnaissance diamond drilling programme commenced at the Ballek project on 5th January 2008 to
test a number of targets prioritised on the results of ground magnetic and induced polarisation/
resistivity surveys completed in December 2007. Four diamond drill holes for a total of 1,617m
drilling have been completed to date (see Table 1, website Figure 2).

Table 1:  Ballek JV Drilling Summary

    Hole ID          Collar Coordinates (RT90 2.5 gon V)         Azimuth       Dip      Depth (m)         Comment
                    North (m)         East (m)       RL (m)                                                   
 BAL0001            7,333,605        1,610,783        513          180         -88          444.7        Completed
 BAL0002            7,330,998        1,609,901        480          090         -88          316.0        Completed
 BAL0003            7,328,702        1,607,520        429          090         -88          360.0        Completed
 BAL0004            7,322,724        1,612,548        465          000         -88          496.0        Completed
 Total                                                                                    1,616.7     

The wide-spaced drill holes have intersected a sequence of predominantly intermediate to mafic
metavolcanic rocks. In hole BAL0001 the host rocks are overprinted by epidote-magnetite and minor
hematite alteration showing evidence of multiple phases of hydrothermal alteration, and locally
contain minor blebs and disseminations of copper sulphides. In contrast, holes BAL0003 and BAL0004
intersected zones of fracture-hosted copper sulphide mineralisation that is considered to be similar
to the known mineralisation at the Lulepotten deposit ( see website Figure 2).

Significant assay results have been reported for drill holes BAL0003 and BAL0004 (see Table  2). In
hole BAL0003, fracture-hosted bornite plus chalcocite (minor  chalcopyrite) mineralisation was
intersected between 57m and 78m downhole. Hole BAL0004 contained a wide zone of local fracture-hosted
sulphide mineralisation between 138m and 220m downhole, with narrow higher grade zones (Table  2). In
both drill holes, mineralised fractures cut the drill core at low angle to the core axis and are
inferred to be sub-parallel to the steeply dipping meta-volcanic stratigraphy. Consequently, the true
widths and orientations of the mineralised zones are not known.

Table 2:  Summary of Assay Results

    Hole ID         From (m)        To (m)       Length (m)            Grade                        Comment
                                                                Cu (%)     Au (g/t)                    
 BAL0001                -              -             -             -           -       No significant results
 BAL0002                -              -             -             -           -       Not sampled
 BAL0003              62.0           63.0           1.0          0.28        1.33      Bornite and chalcocite veinlets
                      67.0           79.0           12.0         0.34        1.40
                 including 67.0      70.0           3.0          0.97        4.41
                    and 71.0         72.0           1.0          0.14        0.99
                    and 76.0         78.0           2.0          0.28        0.84
 BAL0004              149.0          151.0          2.0          1.30        0.40      Chalcopyrite and borite(minor
                      194.0          196.0          2.0          1.25        0.28      chalcocite) veinlets

Half-cut core samples through the logged mineralised zones were taken at a commercial facility in
Malå, Sweden. Sample preparation was undertaken by ALS Chemex in Piteå, Sweden, and analysis of the
samples was completed by ALS Chemex in Perth, Australia. Quality control and quality assurance of the
assay results has been undertaken with standards, blanks and repeat samples.


Future Exploration

Mineralisation at Lulepotten is open at depth and along strike. Drill hole BAL0003 reported above,is
located approximately 2 kilometres along strike to the SW from the Lulepotten deposit. The geological
similarity of the style of mineralisation intersected in this hole suggests that there may be
significant untested potential along the structure, which is interpreted to have an overall strike
length in excess of 5,000 metres. Furthermore, the occurrence of copper sulphides in BAL0004 suggests
that repetitions of the Lulepotten-style mineralisation may be possible in other parts of the project.

An induced polarisation (IP) survey completed by Agricola in late 2007 detected the Lulepotten
mineralisation, which is characterised by a marked increase in conductivity and IP response. Hole
BAL0003 was drilled to test a similar geophysical response. This gives the company confidence that
ground geophysics can used to identify prospective zones that can be prioritised for drill testing.

Agricola advises that compilation of historical geological, assay and drilling data from the
Lulepotten deposit is currently in progress. Further drilling is planned to evaluate the full extent
of the Lulepotten system, to include collection of adequate information to prepare an initial resource
estimate consistent with the JORC classification system.

Background

Energy Ventures holds a 29.9% interest in Agricola and has a further 46.78 million options exercisable
at £0.01 (46% equity interest fully diluted). Agricola has signed an option and earn-in agreement with
Beowulf  Mining plc, the AIM listed copper, gold and uranium explorer, on the Ballek 2, 3, 4 and 5
exploration permits that covers 110 square kilometres of Arjeplog County of Northern Sweden.

Agricola is earning a 51% interest in the Ballek exploration permits by undertaking ground geophysical
surveys  followed  by  3,200 metres of diamond drilling by December 31, 2008. To date Agricola has
completed the ground geophysical surveys and 1,617 metres of diamond drilling. Agricola's interest
can be increased from 51% to 70% through funding a further USD $500,000 of exploration expenditure.
Further information on the Agricola and its projects may be found at www.agricolaresources.com..

The Directors of the Issuer accept responsibility for this announcement.

Information in this report relating to Exploration results is based on information reviewed by Mr
Lachlan Reynolds (an employee of Energy Ventures Ltd) who is a member of The Australasian Institute of
Mining and Metallurgy. Mr Reynolds has sufficient experience which is 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 under the 2004 Edition of the Australasian Code for reporting of
Exploration Results, Mineral Resources and Ore Reserves. Mr Reynolds consents to the inclusion of the
data in the form and context in which it appears.

For further information contact :-

Dr Robert Young          Tel +44 (0)1353 649 701

Mr Barry Hocken          Tel +44 (0)20 7628 5582

Contact Information

  • Agricola Resources plc