Meekatharra update

7 Feb 2006 07:01

Mercator Gold PLC07 February 2006 7th February 2006 • Work commences on Mercator's 100% owned Meekatharra assets • Appointment of Operations Director • Completion of desktop review of 1.9 million ounce resource - three key areas identified for early gold production LONDON - Mercator Gold plc (AIM: MCR) ("Mercator" or "the Company") announces,detailed work has commenced on the mineralised zones at Bluebird, Paddy's Flat,and Meekatharra North. Drilling programmes have been initiated, together with reviews of previousdrilling results and historic reports, to determine and evaluate a timetable forfuture production. Mercator will, as a result of these studies, target asearly as possible a recommencement of profitable and sustainable production. Mercator also announces the appointment, with immediate effect, of Mr DenisGeldard, aged 59, as Operations Director to co-ordinate and manage the Company'smove to gold production. Mr. Geldard is a mining engineer with considerableinternational and Australian gold mining experience. He was previously a SeniorManager in the Iluka Resources Ltd Group in Australia, Indonesia and the USA,and has extensive previous production experience managing gold operations inWestern Australia including the Meekatharra gold belt. From January 1999 untilJanuary 2002 Mr Geldard was the Operations Director of PT Kobe Tin. Commenting on the planned operations, Patrick Harford, MD of Mercator, said: "2006 is set to be a busy and productive year for Mercator. Current drilling andevaluation work will forge the way for an early assessment of sustainableproduction. I am also delighted to welcome Denis Geldard as Operations Directorto co-ordinate the project." Bluebird Evaluating the Bluebird deposit for production is the first priority for theCompany, given its close proximity to the treatment plant and the advancedstatus of this project. Bluebird, the subject of previous drilling, has a current global resource of5,280,000 tonnes @ 1.9 g/t Au for 326,000 ounces. The bulk of these ounces arecontained within five high-grade domains, 1,698,000 tonnes @ 4.5 g/t Au for244,000 ounces, surrounded by a lower grade alteration halo. This resource hasbeen defined over a strike length of 500 metres. Gold mineralisation extends north and south of the current resource with RC anddiamond core drilling planned, in early 2006, to extend the resource alongstrike, and at depth. Resource definition and exploration drilling is planned targeting the Bluebirdlode system immediately north of the existing bluebird pit, and on the EdinHope, and Polar Star lodes to the south. This drilling is aimed at testing gold mineralisation over a strike length of1.8 kilometres with additional work planned on other anomalies with potential tofall within an enlarged open cut. Once this drilling has been completed the entire Bluebird deposit will bemodelled and optimised to evaluate mine viability and processing at theCompany's Yaloginda Treatment Plant, 1.5 km from Bluebird. Paddy's Flat The acquisition of tenements covering the Paddy's Flat area at Meekatharra, (anarea that has historically produced more than 1.9 M oz of gold), presents aunique opportunity for the Company to substantially increase its resource base,and for the long term viability of the Meekatharra operations. Paddy's Flat, about 16 km from the Yaloginda Treatment Plant, has currentindicated and inferred resources of approximately 1.3M oz gold which are intransitional to fresh sulphide ore, with remnant oxide material located betweenthe existing pits. Historic drill intersections that currently lie outside defined resourcesinclude 59m @ 4.1 g/t (VIRCD029) and 85m @ 3.5 g/t (VIRCD033); both holes weredrilled in 2005 with the intersects correlating with a broad alteration zone. An extensive review of drilling results and historic reports is currentlyunderway, along with a review of the geology of the deposits and SpaDiSTManalyses. The current work is being undertaken on the Mickey Doolan, VivianConsols, Mudlode and Prohibition deposits all at Paddy's Flat with detaileddrill targeting to, test mineralisation continuity, expand resources beginmetallurgical test work and resource development in mid-2006. Meekatharra North Meekatharra North comprises major zones of oxide mineralisation locatedapproximately 30km from the Yaloginda Treatment Plant. Current drilling indicates gold mineralisation from surface within an extensivealteration zone. Anomalous gold values are present within the alteration zoneover a strike length of 3 km, with deep weathering potentially indicating lowcost mining. Mineralisation has a current along strike length of 450m, with thedeposit open below 100m vertical depth and along strike to the north. An extensive drilling campaign in excess of 10,000m of RC drilling inconjunction with a Pole-Dipole IP survey is planned for the first half of 2006.The drilling will delineate the full extent of mineralisation, enable thedefinition of a resource and evaluate the viability of open cut mining in oxideores from surface. There are no other details requiring disclosure under the Aim Rules relating tofurther information on the appointment of Denis Geldard, including other publiccompany directorships. Ends For further information please contact: Mercator Gold plcPatrick Harford, Managing Director Tel: +44 (0) 7786 486645Terry Strapp, Chairman Tel : +61 (0) 8 9322 7422Michael de Villiers, Finance Director Tel: +44 (0) 2079291010Dr Julian Vearncombe, Exploration Director Tel: +61 (0) 8 9316 9400E:mail: info@mercatorgold.comwww.mercatorgold.com Beaumont Cornish LimitedRoland Cornish Tel: +44 (0) 7628 3396 Ocean Equities LtdWill Slack Tel: +44 (0) 2077864370 Parkgreen CommunicationsJustine Howarth / Ana Ribeiro Tel: +44 (0) 20 7493 3713 Mercator operates a continuous disclosure policy with respect to explorationresults. Company news releases are based on technical information approved bythe Company's Exploration Director, Julian Vearncombe BSc (Hons), PhD, FGS,RPGeo, FAIG. Information on the acquisition resources was supplied by SBM. This information is provided by RNS The company news service from the London Stock Exchange