1st Jul 2016 08:07
LONDON (Alliance News) - Stellar Resources PLC Friday said it has secured the competent persons report that assessed the company's acreage over the Dolgellau gold belt and the nearby exploration targets located in Wales.
Stellar Resources shares were down 9.0% to 0.150 pence per share on Friday morning.
The outcome of the report was mixed, suggesting the miner could have targets ready to drill in only ten months time at a relatively small cost, but also warned the project lies within land that is protected and mostly owned by third parties - which could pose a problem for exploration work.
The report reviewed the geology, mineralisation, mining history and exploration history of the area, which Stellar Resources holds an exclusive option over, and assessed if further gold mineralisation within the area was likely.
The report also assessed the land use, ownership and other key stakeholders in the area, and how these factors may influence exploration by the company.
The main element of the area that was evaluated was the historic Clogau St David's mine and the 300 smaller workings and trials in the area.
"Welsh gold bullion is potentially worth a premium to the spot gold price which further enhances the attractiveness of the exploration in this area. This is a key factor in the viability of mining for the type of gold mineralisation found on the gold belt," said the report.
The report has concluded that Stellar Resources has a "high potential" of finding new ghold mineralisation in the area, including near-mine exploration targets and new regional targets that have seen less mining activity but are still considered to be prospective.
However, the report also highlighted possible risks for Stellar that may "hinder or delay" exploration efforts.
The report said landowners pose a risk, as they could potentially prevent Stellar from exploring on their land. Around 75% of the total area is covered by land that is owned by farmers, foresters and residents via freehold with the remainder being owned by the Crown Estate or the Welsh government.
Overall, the report has identified around 50 stakeholder groups.
Exploration could also be hindered in certain areas that are classed as sensitive, such as Sites of Special Scientific Interest, Special Areas of Conservation and areas of cultural significance. The report said there is "a number" of those protected sites within the area.
The last potential risk, a more traditional one for natural resource firms, is the ability to secure planning permission and environmental approval.
However, the report has also warned that gaining those standard permissions may be "more time-consuming or difficult" due to the location within the Snowdonia National Park.
"The success of the new exploration will depend on sound geological knowledge and the application of a detailed systematic exploration programme," the report said.
The report has suggested that Stellar conducts stream sediment sampling, geological mapping, soil sampling, hand auger drilling and geophysical surveying, and considers the drilling targets could be provided within a 10 month period as a cost of GBP350,000 to GBP400,000.
By Joshua Warner; [email protected]; @JoshAlliance
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