Significance of gold in Cyprus VMS exploration
Chesterfield Resources Plc, the mineral exploration company, is pleased to provide an update on the significance of gold in its copper exploration prospects in Cyprus in the light of recent increases in the gold price.
Since Chesterfield first drilled notable gold intersections in Cyprus in late 2018, the gold price has risen by 40%, which has emphasized the importance of finding and developing new gold-rich copper deposits. The company’s technical team has just completed an evaluation of its Cypriot exploration licences in terms of their potential for gold. Based on numerous gold encounters in the area, the team has concluded that that the company’s Troodos West licenses cover an unusually gold-enriched VMS (volcanogenic massive sulphide) belt, capable of producing a clean gold-rich copper concentrate. As such, gold is likely to be a significant revenue metal contained within copper-zinc sulphide resources.
· During the mining boom in Cyprus of the 1960s and 1970s, the price of gold was pegged at just $35 per ounce and so was uneconomic to produce. The mining industry was largely halted by the Turkish invasion of 1974, a period which coincided with the start of a great gold bull run. This eventually saw the value of gold increase by fifty times. Because of lingering about geo-political concerns, Cyprus was not re-visited by explorers in light of its gold potential. As such, Cyprus has not traditionally been associated with gold exploitation in combination with copper.
· During its recent appraisal, the Chesterfield technical team identified significant enrichment of gold, in association with VMS type sulphide occurrences, at five locations over a 4km strike length on a major prospective structure. On the same structure, 7km south-east of this zone, another gold occurrence in association with VMS sulphide has also been identified.
· Significant gold intercepts were also encountered during Chesterfield’s diamond drilling campaign of late 2018, including 29.8m at 1.1g/t Au, 27.9m at 0.97g/t Au and 10.5m at 3.8 g/t Au. Percussion drilling earlier this year encountered further gold enrichment in association with buried VMS sulphides at the Hillside target. Rock chip assays revealed significant intersections of zinc-rich VMS sulphides containing >1 g/t Au.
· Cypriot deposits are capable of producing clean, gold-rich copper mineral concentrates that are in increasingly high demand from smelters globally.
· The technical team has determined that gold has the potential to have a large beneficial economic impact from a significant VMS copper-gold discovery in Cyprus. It is noteworthy that gold oxide was briefly mined, on a relatively small scale, in Cyprus just before and during World War II. Even so, in 1938 gold exports were worth the equivalent of $46m at today’s valuations.
Martin French, Executive Chairman of Chesterfield commented, “It is noteworthy most of the targeted drilling for copper conducted by Chesterfield to date has encountered gold, often in quantities that have surprised us. Secondly, archival work also highlights multiple gold encounters.
After a strong performance in 2019, gold has jumped another 12 % since the start of this year. While the price of gold is notoriously difficult to predict, it is a reasonable assumption that uncertainty about the ramifications of the Covid-19 pandemic will persist through this year. The price of gold is therefore likely to remain robust. The company has had a number of investor enquiries about the significance of its gold intercepts and potential for copper-gold exploration in Cyprus. After an evaluation exercise, the technical team has concluded Cyprus offers a higher than average gold content when compared to other VMS camps globally, and we therefore expect gold to be a significant contributor in our polymetallic targets.
We are looking forward to resume testing several of these targets with percussion drilling when the easing of Covid-19 restrictions permit. The percussion drilling will allow us to accurately vector our follow-up diamond drilling programme. There is a considerable body of evidence for us to expect gold to be an important component of the programme.”
Historical context: Cyprus missed the global boom in gold exploration
Cyprus has not previously been considered as a location for gold mined in association with copper, because its mining boom of the 1960 and 1970s coincided with the period when gold was pegged at a price of just $35 per ounce, and gold was then uneconomic to produce. The Turkish invasion of Cyprus in 1974 effectively halted the industry when, just a few years earlier, the gold peg had been released sparking the great bull run in gold that was to see it value increase by fifty-fold in 40 years. Gold’s current price is $1,736 per ounce.
From the mid-1970s onwards the world witnessed a gold exploration boom. At that time, Cyprus was considered geo-politically risky and relatively small scale, while a small number of junior explorers drilled in Cyprus in the noughties, their exploration operations were relatively short-lived for a variety of financial reasons. Consequently, Cyprus VMS copper deposits have not been comprehensively evaluated for their gold potential in the modern era.
Numerous gold encounters at Troodos West
With a greatly improved understanding of VMS deposits, the introduction ofmodern low-level gold analytical techniques and the gold price approaching its historic highs, it has been a timely exercise for the company’s technical team to run an appraisal of Cyprus’s gold prospectivity.
Within Chesterfield’s Troodos West license block over a minimum 4km strike length there are at least five known VMS prospects and deposits from which gold-rich samples have been collected. From north to south these sample points are:
Double 7 prospect: In 2018, Chesterfield diamond drill intercepts of sulphide mineralization 11.1 and 18.9m thick grading 1.29 g/t Au with sample intervals up to 2.99 g/t Au, in association with anomalous zinc and copper values;
Kinousa Underground Mine (historic): A gossan on surface (after VMS sulphides) contains higher gold values (2.57 and 6.48 g/t Au);
Pournaji prospect: An extension of Double 7-KinValley mineralized trend. Several 2019 dump and grab samples collected by Chesterfield returned higher gold values including 2.82 and 5.59 g/t Au in association with anomalous Cu and Zn values
Loana prospect (historic): In 1981, a UN drillhole intercepted 10m of zinc-copper rich sulphides, including 6m grading 3.89 g/t Au;
Hillside prospect: In 2020, Chesterfield percussion drillholes intercepted significant intersections of zinc-rich VMS sulphides containing >1 g/t Au.
About Chesterfield Resources Plc
Chesterfield Resources is a copper-gold exploration and development Company active in Cyprus. The Company strategy is to generate value for shareholders by discovering and developing multiple deposits to production. Chesterfield is in the advanced stage exploration in on its Troodos West licence area, and has a large bank of licence areas elsewhere in Cyprus, either granted or under application.
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