SUMBA EXPLORATION UPDATE

Transcription

1 ASX RELEASE Tuesday, 23 November 2010 SUMBA EXPLORATION UPDATE Hillgrove Resources Limited (ASX:HGO) today announces a planned airborne geophysical survey, Pelitalira prospect progress and final results from the first phase of diamond drilling on the Masu Project, Sumba, Indonesia. Highlights Drilling of West Vein confirms consistent gold grade and widths down dip: o MADPH022: 3.60g/t Au; o MADPH024: 2.58g/t Au. West Vein remains open along strike and down dip. Trenching within the Masu prospect continues to encounter anomalous gold values. Airborne magnetic and radiometric survey to commence over the Masu corridor December Tanah Daro surface sampling recommenced: o Soil sampling identifies gold anomaly 200m x 300m with values > 1g/t Au; o Rock chip sampling of highly altered, silicified hill identifies additional high grade gold values to 37.13g/t Au and silver values to 406g/t Ag. Figure 1: Sumba IUP and Project Location Tanah Daro Masu IIII ACN Level 41 Australia Square, 264 George Street, Sydney NSW 2000, Australia T F

2 I I I I Page 2. Drilling Initial scout diamond drilling of selected targets within the Masu Project is now complete. Deeper drilling on the West Vein target largely confirmed elevated gold values in trenching and earlier shallow drilling, with better results being: MADPH022: 3.60g/t Au, MADPH024: 2.58g/t Au. The West Vein dips steeply towards the west and remains open at depth and along strike to the north, where it disappears under younger sedimentary cover. Gold mineralisation is hosted in low sulphidation quartz - sulphide epithermal veins. Although open along strike and at depth, the overall grade/thickness properties of the West Vein suggest it would not be of sufficient size to support a standalone gold operation. East Vein sampling has encountered broad, low grade gold values in surface trenching, modest gold grades and widths in shallow drilling but almost universally thin, low gold grades in deeper drilling. Structural interpretation of the East Vein complex shows the vein system flattening out significantly, with a corresponding decrease in observed width and gold grade. No further drilling is proposed on this target at this time, with one drill rig demobilised and the second placed on standby. Drilling will recommence at Masu on completion of the planned geophysical survey and after re-evaluation of all data and thence geochemical sampling of selected targets based on this re-evaluation. Table 1. Masu Significant Trenching Results Hole East North Ag RL Length From To Intercept UTM Z51S UTM Z51S PPM MATRFT g/t Au g/t Au g/t Au g/t Au g/t Au 8 MATRFT g/t Au g/t Au 0 MATRFT g/t Au 6.02 MATRFT g/t Au 6.18 MATRFT100A g/t Au 9 MATRFT g/t Au g/t Au g/t Au 20.8 MATRFT g/t Au g/t Au 0.4 MATRFT g/t Au 8.57 MATRFT g/t Au 2.2 MATRFT g/t Au 3.85 MATRFT g/t Au 6.45 Note: Gold assays determined by averaging up to 3 repeats using 50gm Fire Assay method Silver values calculated from multi element sweep using ICP analytical method Significant intercepts calculated as weighted average, maximum of 2m internal waste at a 0.5g/t Au cut off East Sumba datum: WGS84 Zone 51 Southern Hemisphere Analyses conducted at Intertek Laboratories, Jakarta, Indonesia

3 I I I I Page 3. Trenching Trenching of observed epithermal veins, silicified zones and higher soil gold values is continuing, with significant intersection presented above in Table 1. Mapping and Soil Sampling Regional reconnaissance geological mapping continues to expand the known extent of hydrothermal alteration, quartz veins and silicification along the Masu Corridor. Soil sampling is ongoing over altered volcanic lithology identified through the mapping process. Geophysical Survey An airborne magnetic and radiometric survey is planned to commence over the Masu Project in early December. The geophysical survey is designed to provide a clearer picture on the regional-scale structural picture at Masu, to assess for the presence of favourable structural targets beneath shallow cover and to assess the potential for shallow buried porphyries. Project Review At the invitation of Hillgrove, the Masu Project area has recently been visited by an internationally reputed epithermal gold mineralisation specialist over a six day period with a brief to review existing exploration results and provide comparisons to similar epithermal gold systems in the Pacific Rim. The review concurred with Hillgrove s emerging view that the West and East Veins are intrusion-related low sulphidation epithermal quartz-sulphide Au + base metal occurrences that were unlikely to be of sufficient size to support an economic mining proposition, but that further exploration of the Masu corridor was definitely warranted. Tanah Daro Project Pelitalira Prospect Surface sampling at the Pelitalira Prospect, located in Central Sumba, resumed after the successful completion of land access socialisation. The Pelitalira prospect comprises a prominent hill of silicified, intermediate volcanic lithology cut by quartz lodes in a number of locations. Intense hydrothermal alteration is also evident across the entire prospect area. Soil sampling has to date identified a 200m x 300m gold anomaly grading >1g/t Au, trending WNW where it disappears under shallow cover. Rock chip sampling of altered volcanic lithology and quartz lodes has returned significant gold, silver and in places copper values as presented in Table 2 and Figure 3. These results are very encouraging and support a decision to undertake scout drilling in the near term. Sampling, mapping and planned trenching will continue, in preparation for a planned drilling campaign in Q1, Ground geophysical surveys are under consideration.

4 I I I I Page 4. Table 2: Tanah Daro (Pelitalira Prospect) Significant Rock Chip/Float Sampling Results Sample No Sample Type UTM E UTM N Au g/t Ag g/t Cu % Rock Chip Rock Chip < Rock Chip < Rock Chip < Rock Chip < Float < Rock Chip Rock Chip < Rock Chip < Rock Chip < * Subcrop < * Rock chip < * Rock chip * Rock chip * Float * Float Subcrop < 3189 Float < 3191 Rock chip Subcrop Subcrop Float-near Subcrop < 4404 Float-near TDRK Rock chip < TDRK Rock chip < Note: Gold assays determined by averaging up to 3 repeats using 50gm Fire Assay method Silver, copper, lead values calculated from multi element sweep using ICP analytical method Central Sumba datum: WGS84 Zone 50 Southern Hemisphere Analyses conducted at Intertek Laboratories, Jakarta, Indonesia * Previously announced results Commenting on the results, Hillgrove Managing Director Drew Simonsen said Drilling and sampling has confirmed widespread gold mineralisation across the Masu project area. Although results to date indicate tested targets are relatively small, the Masu corridor is both large and significant, and remains highly prospective for large gold deposit occurrences. Our activity to date is really only just scratching the surface. The more we look, the more we find. With the help of specialists in this type of extensive epithermal mineralogy, Hillgrove has now determined to undertake a geophysical examination of the Masu project area and re-evaluate work and interpretation to date with a view to gaining a deeper understanding of controls on gold mineralisation. In addition, Pelitlaira is shaping up as a very interesting target and we look forward to bringing news of our progress there over the coming months.

5 I I I I Page 5. About Hillgrove Hillgrove is an Australian mining company listed on the Australian Securities Exchange (ASX: HGO) focused on developing its Indonesian and Australian base and precious metals projects. The Company is targeting the discovery of world class epithermal gold and porphyry copper/gold deposits in Eastern Indonesia. Hillgrove s flagship development is the Kanmantoo Copper Mines, located less than 55km from Adelaide in South Australia. Kanmantoo currently hosts a Mineral Resource of 32.2Mt (2.3Mt Measured, 22.5Mt Indicated and 7.4Mt Inferred) grading 0.9% copper and 0.20g/t gold, containing 292,200 tonnes of copper, 191,100 ounces of gold and 3,313,600 ounces of silver. With completion of construction targeted for 2011, Kanmantoo will be a 2.4MT per annum open-cut mine producing approximately 20,000 tonnes of copper in concentrate and 10,000 ounces of gold per annum. The information in this report that relates to Exploration Results is based on information compiled by Mr James Kerr, who is a Member of The Australasian Institute of Geoscientists. Mr Kerr is General Manager, Exploration for Hillgrove Resources and has sufficient relevant experience to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Kerr consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The information in this report that relates to Mineral Resource estimates is based on information compiled by Mr Paul Payne, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Payne is a full-time employee of Runge Limited and has sufficient relevant experience to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Payne consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. For more information contact: Mr Drew Simonsen Mr Jim Kerr Managing Director General Manager - Exploration Tel: Tel:

6 I I I I Page 6. Figure 2: Masu Projects Location Map

7 I I I I Page 7. Figure 3: Pelitalira Prospect Soil and Rock Chip Gold Values Insert

8 I I I I Page 8. Table 3: Masu Project Drill Hole Location and Significant Gold Intersections Hole East UTM Z51S North UTM Z51S RL Depth Dip Azim From To Width MADBD NSI Intercept g/t Au MADLJ MADLJ NSI MADOK Ag g/t MADOK MADOK MADPH NSI MADPH NSI MADPH MADPH MADPH MADPH MADPH MADPH MADPH MADPH NSI MADPH MADPH MADPH MADPH MADPH MADPH MADPH NSI MADPH NSI MADPH MADPH Note: Gold assays determined by averaging up to 3 repeats using 50gm Fire Assay method Silver values calculated from multi element sweep using ICP analytical method Significant intercepts calculated as weighted average, maximum of 2m internal waste at a 0.5g/t Au cut off East Sumba datum: WGS84 Zone 51 Southern Hemisphere Analyses conducted at Intertek Laboratories, Jakarta, Indonesia.

9 I I I I Page 9. Figure 4: West Vein Drill Hole Location Plan

10 I I I I Page 10. Figure 5: East Vein drill Hole Location Plan

11 I I I I Page 11. Figure 6: North Pahandanjal Drill Hole and Trenching Location Plan

12 I I I I Page 12. Figure 7: Okanjara Drill Hole and Trench Location Plan