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Additional	Information
Market:	AIM
Sector:	Gold Mining
Epic:	SOLG
News:	Latest news
Web Site:	Solomon Gold
Other Articles:	04-03-201001-03-201025-02-2010

Solomon Gold to buy 2 Queensland gold explorers

by Andre Lamberti

Solomon Gold PLC (AIM: SOLG) said that, in line with its previously flagged diversification strategy, has agreed in principle to acquire two separate Australian gold exploration companies for 86.8 million shares, A$1 million in cash and  A$1 million in convertible notes.

The company is acquiring Acapulco Mining Pty Ltd with its gold projects over the Mt Perry Goldfield in Queensland and Central Minerals Pty Ltd with its gold projects over a newly defined 200 kilometre Carlin style trend on the eastern margin of the southern Bowen Basin in central Queensland, including the Rannes property.

The acquisition of Acapulco and Central will complement its existing exploration project with Newmont Ventures Ltd, a subsidiary of Newmont Mining Corp (NYSE: NEM), for giant porphyry gold copper projects on Guadalcanal and Solomon Gold’s 100 percent owned Fauro Island project in the Solomon Islands.

The Acapulco and Central projects have yielded recent and significant gold discoveries from drilling in a low risk environment adjacent to existing gold mining operations in Queensland, Solomon Gold.

The projects at Mt Perry provide the opportunity to define deposits in excess of several million ounces of gold in strongly mineralised intrusive related porphyry systems. At Rannes, Solomon Gold believes there is potential for the discovery of several million ounces of gold in low temperature gold mineralising systems similar to the world renowned Carlin and Battle Mountain trends in Nevada, US.

Central and Acapulco geologists have recognised new common structural controls to mineralisation in both the Rannes and Mt Perry project areas, as a persistent north-north-west fracture system. Structural and geological similarities and management synergies between both projects are expected to assist in the efficient exploration of both areas.

Both Acapulco and Central hold granted exploration permits in Queensland which are in good standing, the company said.

Solomon Gold will pay 49.6 million of its shares to acquire Acapulco.  Chief executive Nicholas Mather and non-executive chairman Cameron Wenck are interested directors in Acapulco. Mather holds 20.03 percent of Acapulco and on completion would be entitled to a further 9,938,075 Solomon Gold shares.

For Central Minerals, payment will be 37.2 million Solomon Gold shares. The business is 79 percent owned by D'Aguilar Gold Ltd (ASX: DGR). Mather and Solomon Gold non-executive director Brian Moller are also directors of Central and D'Aguilar. Mather and associated interests will become entitled to a further 558,000 shares in Solomon Gold as a result of the Central deal.

Solomon Gold has also agreed to pay A$2 million in cash and convertible notes to D'Aguilar to purchase all of the debts owed by Central to D'Aguilar, which currently amount A$2.28 million.

After completion of the acquisition of Central D'Aguilar will be entitled to a further 29.39 million shares in Solomon Gold and will hold 32.94 million shares or a 17.05 percent stake of Solomon Gold. CEO Mather and his associated interests will hold a total of 30.78 million shares or 15.93 percent as a result of both the Acapulco and Central transactions completing, and Solomon Gold will have 193.17 million in issue.

Drilling programs are to commence immediately for 10,000 metres over the next 12 months at the Mt Perry Goldfield and Rannes properties.

Central holds exploration licences covering 3,670 square kilometres over a strike length of 200km on the eastern margin of the Permian Triassic Bowen Basin in central Queensland, approximately 200km south west of the Central Queensland port of Rockhampton.

The central Queensland district has recorded historical production of gold in excess of 10 million ounces, principally at the Mt. Morgan deposit to the north east and the Cracow epithermal vein deposit to the south and there is potential for similar endowment in this area.

Five prospects, Crunchie, Homestead, Kauffmans, Cracklin Rosie and Porcupine Pie in the Rannes Central area have been subject to first pass drilling by Central and previous explorers with potentially economic intersections in all five.

Acapulco holds extensive exploration tenements and applications covering 1,344 square kilometres over the historic Mt Perry and Normanby Goldfields in Queensland. There are significantly more targets and greater prospectivity at Mt Perry than at Normanby and accordingly Mt Perry will attract the bulk of the exploration focus in Acapulco from Solomon Gold.

Acapulco has conducted extensive airborne magnetic and electromagnetic surveys and detailed soil and rock chip sampling and mapping programs over the Mt Perry area. This has been followed up by drilling programs conducting first pass reconnaissance drilling on numerous targets.  Solomon Gold will prioritise resource definition drilling programmes. Drilling rigs are already on the property and will be allocated for immediate drilling at the highest priority targets, principally at the Chinaman's Creek zone.

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