16th Oct 2006 07:00
To be embargoed until 7.00am 16 October 2006 Conroy Diamonds and Gold P.l.c. ("Conroy" or "the Company") ACQUISITION OF GOLD ASSETS IN FINLAND The Company. proposes to expand its gold exploration interests by acquiringfrom Conroy P.l.c. that company's gold exploration assets in Finland for aconsideration of ¢â€š¬1 million(‚£675,300) to be satisfied by the issue of19,294,286 New Ordinary Shares. These assets include 9 Exploration Licencesheld by Trans-International Mineral Exploration Limited ("TIMEL") a whollyowned subsidiary of Conroy P.l.c., in the Central Lapland Greenstone Belttogether with an extensive geological and geophysical database. The Directorsbelieve that Finland has excellent prospects for gold and is under-explored byworld standards.These gold exploration assets in Finland will supplement the Company's existinggold interests in the Longford-Down Massif in Ireland and will, in thedirectors' opinion, expose Conroy to new and exciting gold explorationopportunities in an area which is highly prospective and is quickly becomingthe location of a burgeoning gold mining and exploration industry in a miningfriendly environment.Most of Finland lies on the so-called Baltic Shield- the ancient cratonic massforming the core of North Western Europe. Although underlain by this majorcratonic mass, Finland has not been subjected to the same exploration effortseen in other shield areas (e.g. Southern Africa, Western Australia, Canada)and gold has been largely produced as a by-product of operations in massivesulphide deposits.Studies by the Geological Survey of Finland ("GTK") have resulted in areappraisal of Finland's gold potential indicating a high potential for gold inCentral Lapland and by 1991 the first gold mine in Finland was in operation.This was followed by the discovery of the Suurikuusikko gold deposit in theCentral Lapland Greenstone Belt, which is estimated to have a resource of over2,000,000 oz. Au and is now under development by the Canadian gold miningcompany Agnico - Eagle. Mines LimitedConroy P.l.c. has carried out an active exploration programme for gold inFinland and has acquired a significant knowledge of the style of golddeposition and mineralisation, in particular in the Central Lapland GreenstoneBelt. Conroy P.l.c. has built up an extensive database on gold occurrences inthe area which includes a comprehensive overview, detailed aeromagneticinterpretation, and a review of the entire GTK geochemical database (1 sampleper 4km‚²). The analysis of the data was followed by the collection and analysisof over 2,300 geochemical samples. This was undertaken by the GTK on behalf ofConroy P.l.c. and resulted in the identification of four areas of particularlyattractive prospectivity for gold in the Central Lapland Greenstone Belt.The Company proposes to continue the exploration programme over the prospectiveareas which have been identified and will also continue to employ, undercontract, the services of the GTK.The strategy of Conroy in Finland will be to identify economic gold depositsand thus increase value to shareholders funds. Finland, with its well-developedinfrastructure and mining culture, is a mining friendly country with geologicalpotential for large gold deposits.As the Chairman of Conroy is the main shareholder in Conroy P.l.c. and otherdirectors of Conroy are shareholders and directors of both companies anExtraordinary General Meeting will be held on Wednesday 1 November 2006 toconsider, and if thought fit, resolve to proceed with the acquisition which hasbeen independently valued at ¢â€š¬1 million (‚£675,300). Professor Richard Conroyholds 19,254,240 shares in Conroy P.l.c. (60.92% of its issued capital) and theholdings of other directors are: Maureen Jones 1,806,360 shares (5.72% of itsissued capital), J.P. Jones 1,650,120 shares (5.22% of its issued capital),L.J. Maguire 1,209,120 shares (3.83% of its issued capital) and H.H. Rennison1,320,120 shares (4.18% of its issued capital).CSA, a worldwide exploration management consultancy, has undertaken a valuationof the gold claims and information database held by Conroy P.l.c. in northernFinland through TIMEL a wholly owned subsidiary. . The nine claims are locatedwithin three separate blocks in the Sodankyla area, covering 5.1km2.CSA had previously visited Finland on behalf of Conroy P.l.c. to review goldand diamond properties and is familiar with the mineral licensing system there.To assist with the current study, Conroy P.l.c. provided technical andfinancial information and reports on the results of work carried out on theproperties, and CSA obtained information on other gold prospects and depositsin the region.CSA classifies the Conroy P.l.c. claims as "exploration areas" until such timeas a defined mineral resource is outlined.The choice of valuation methodology applied to mineral assets, including aclaim (or exploration licence), depends on the amount and nature of dataavailable and the reliability of that data. Mineral assets can be classified asExploration Areas, Advanced Exploration Areas/Pre-Development Projects,Development Projects and Operating Mines. These categories represent a spectrumfrom areas in which mineralisation may or may not have been found but where aMineral Resource has not been identified, through to Operating Mines which havea well-defined Mineral Reserve. The categories as listed above progressivelyrepresent areas within which there is an increasing certainty or confidencethat a Mineral Resource/Reserve is present.The following standardised methodologies were employed by CSA in valuing theConroy P.l.c. claims(a) Geoscience Rating Method,(b) Multiple of Exploration Expenditure.THE CONROY PLC EXPLORATION PROPERTIESConroy P.l.c., through a wholly owned subsidiary TIMEL, holds nine claims inthree sub-areas within the Sodankyla target zone, covering 508.31 hectares(5.08km2) as set out in Table 1 below: Claim Claim Company Area Valid- Valid- Area No. Name From To (Ha) 7768/1 Kirves 3 Trans-International Sodankyla 23/04/2004 23/04/2009 71.20 Mineral Expl. 7768/2 Kirves 4 Trans-International Sodankyla 23/04/2004 23/04/2009 34.48 Mineral Expl. 7768/3 Kirves 5 Trans-International Sodankyla 23/04/2004 23/04/2009 38.83 Mineral Expl. 7768/4 Kirves 6 Trans-International Sodankyla 23/04/2004 23/04/2009 82.51 Mineral Expl. 7768/5 Kirves 7 Trans-International Sodankyla 02/06/2004 02/06/2009 55.51 Mineral Expl. 7768/6 Kirves 8 Trans-International Sodankyla 23/04/2004 23/04/2009 74.81 Mineral Expl. 7768/7 Kirves 9 Trans-International Sodankyla 23/04/2004 23/04/2009 74.90 Mineral Expl. 7746/1 Hakku 1 Trans-International Sodankyla 11/05/2004 11/05/2009 38.82 Mineral Expl. 7746/2 Hakku 2 Trans-International Sodankyla 11/05/2004 11/05/2009 37.33 Mineral Expl. Table 1 - Sodankyla claims held by TIMEL on behalf of Conroy P.l.c.The Sodankyla claims are located over the trace of the regionalnorthwest-trending Sirkka Line structural feature, represented by the majorSodankyla fault in the vicinity of the claims. This fault cuts the underlyingLower Proterozoic greenstone belt metasediments and metavolcanics, close totheir contact with older basement. In the area of the claims the 130‚º strikingSodankyla fault is intersected by the Kemijarvi fault, striking at 150‚º. Anumber of gold prospects and deposits have been located to date elsewhere onthe Sirkka trend, generally hosted by breccias, vein networks and shear zones.These include the previously worked Saattopora gold deposit hosted inquartz-carbonate veins and a number of occurrences hosted in veins withingraphitic schists and carbonatised komatiites (chrome-bearing marbles).Conroy P.l.c. has recently acquired Landsat satellite imagery and has purchasedhigh quality airborne magnetic and radiometric data for all of northernFinland. This has been used to assist in geological and structuralinterpretation. These data are being integrated with earlier regional tillgeochemical sampling by the Geological Survey of Finland (GTK) and laterfollow-up by Conroy P.l.c. to identify new targets for follow-up explorationThe regional satellite, airborne geophysics and till geochemical database builtup by Conroy P.l.c. over a number of years in Finland is considered to be avaluable asset in ongoing ground selection and acquisition. CSA has ascribed avalue to this data based on the cost of acquiring the information, as reportedby Conroy P.l.c., without any addition for inflation, and on the estimatedvalue of the data for future target selection. The value of this database wasadded to the value of the existing ground holdings estimated by the GeoscienceRating Method.CSA reached the following conclusion:¢â‚¬¢ The exploration claims currently held by Conroy P.l.c. in Finland, selectedon the basis of regional and follow-up data, host several promising goldtargets for future testing. These are currently at a relatively early stage inthe exploration cycle, however sufficient data has been acquired to enable afair market value to be ascribed to the properties.¢â‚¬¢ Conroy P.l.c., through its acquisition and interpretation of regional golddata, is in a strong position to select further prospective gold ground innorthern Finland. The value of this database has been included in the overallvaluation of the Finnish projects.¢â‚¬¢ Taking into consideration the preferred range of values obtained from thevaluation methods used, the relatively strong gold price and the current marketfor gold properties, that the estimated Fair Market Value of Conroy P.l.c.'sgold exploration interests in Finland is ¢â€š¬1 millionThe gold exploration assets in Finland of Conroy P.l.c. have been independentlyvalued by CSA, a worldwide exploration management consultancy, at ¢â€š¬1 million.It is proposed that these assets be acquired by the Company for ¢â€š¬1 million(675,300) to be satisfied by the issue of 19,294,286 new Ordinary Shares toConroy P.l.c., valued at 3.5p per share (the average middle market share priceof the Company's Ordinary Shares in the 3 months, prior to the date of thisdocument). Conroy P.l.c. will hold 18.26% of the share capital of the Companyfollowing this transaction.Application will be made for the new Ordinary Shares to be admitted to tradingon AIM and dealings are expected to commence on Thursday 2 November 2006.ENDCONROY DIAMONDS & GOLD PLCRelated Shares:
Conroy Gld&nres