Sergey Dr Sergey V Kurzin, Chairman of Oriel Resources Plc (“Oriel” or the “Company”), has announced that Oriel has entered into an Exclusive Option Agreement (the “Agreement”) giving the Company the right to acquire 100% of the Goltsovoye Silver Polymetallic Project (the “Project”) in the Magadan Region of the Russian Federation. Under the Agreement, the current owners of the Project have agreed to grant Oriel an exclusive right to conduct technical and legal due diligence in relation to the Project until 12 July 2004 in consideration of the payment of an option price of USD 100,000. If Oriel, in its sole discretion, decides to acquire 100% of the shares of the Russian-registered company, CJSC Ayaks, that hold title to the Project, Oriel will be obligated to pay to the shareholders of CJSC Ayaks, a total of USD5,000,000 in cash, together with the issue, credited as fully paid, of 1,300,000 shares of Oriel. In the event of successful completion of the acquisition of CJSC Ayaks, the Company has agreed to grant an option, by way of a finder’s fee, to a consultant to Oriel, to subscribe in cash for 975,000 new Oriel shares at 1p per share within one year of such completion.
The Goltsovoye deposit is along the same trend as the nearby Dukat and Luna silver mines. Dukat the third largest silver deposit in the world contains 14.8 thousand tonns of silver in reserves, and was discovered by the geologists from Omsukchan and explored along with Luna and Julietta deposits by Dukat GGK (Mining Geological Company) of which Mr Yuri Radchenko, consultant to Oriel and Chairman of the Board of Omsukchansk Mining Geological Company (Russian subsidiary of Bema Gold Corp., developing Julietta gold - silver mine) is President. Dr. Kurzin sees the development of such a partnership with Mr. Radchenko, with whom he created Julietta Joint Venture in 1994 in this major gold - silver district, as a strategic move by Oriel, one which could lead to the acquisition and discovery of additional deposits over the next few of years.
The Goltsovoye Deposit containing over 2,000 tons of silver of which 1,600 tons are on the State balance and have been approved by GKZ (in excess of 1 mln ounces of gold equivalent) is located approximately 600 km northeast of Magadan and 40 km southwest of Omsukchan, the main mining centre for the Dukat and Luna silver mines, Julietta and other gold mines. The area is covered by a 12.5 square kilometres Exploitation License which expires on 31st December, 2012. The deposit is hosted within Upper Cretaceous volcanics and consists of three zones comprising 17 separate ore bodies in total. Mineralisation is predominantly vein/structurally controlled, consisting of massive sulphide in veins and breccias, sulphide stringer zones and stringers and disseminations. The deposit has been extensively drilled and has three levels of exploratory adits over a 150 m vertical interval.
A total C1+C2 Category Resource of 2,142.8 tons of silver has been estimated for the three zones using a cut-off of 50 g/t silver. This consists of an initial C1 and C2 resource approved by the GKZ (State Committee for Reserves in Moscow) in 1987 and additional resources calculated by CJSC Ayaks (Russian legal entity - holder of Goltsovoye License) on the basis of analysis and revision of geological data and additional ore zones in 2003. The additional resources of 2003 have been independently audited by Dukat GGK, who conducted exploration work at the deposit as a subcontractor.
