Adelaide Resources Limited: Baggy Green Drilling to Add to Barns Gold Resource Inventory

Adelaide - Adelaide Resources Ltd. (ASX:ADN) drilling programme focused at the 100% owned Baggy Green prospect on the Company's Eyre Peninsula gold project is scheduled to commence in the first week of October.

- The programme aims to delineate gold mineralisation that can build on the maiden 107,000 ounce Mineral Resource announced in July 2016 for the Barns deposit, located just 5.5km northwest of Baggy Green.

- Baggy Green can potentially deliver additional nearby resources that are both material in magnitude and, importantly for possible future open pit mining economics, commence at relatively shallow depths below surface.

- Drilling at a southern target at Baggy Green will test a gently dipping zone of mineralisation where historical intersections include 11 metres at 3.55g/t gold and 24 metres at 2.04g/t gold, including 7 metres at 5.56g/t gold.

- At a second target, located 1.9km north of the first, drilling will follow-up historical intersections that include 36 metres at 0.78g/t gold and 38 metres at 0.82g/t gold, including 10 metres at 2.59g/t gold.


Introduction

The Eyre Peninsula gold project comprises eight tenements which cover 2,807 km2 in the Gawler Craton. A camp of gold prospects, including Barns, Baggy Green and White Tank, fall within 6km of each other on two adjoining, wholly owned tenements (Figure 1, see link below).

In July 2016, with the assistance of independent consultant Mining Plus Pty Ltd, the Company announced a maiden Mineral Resource for the Barns deposit in accordance with the JORC Code 2012.

The Barns Mineral Resource estimate totals 2.11 million tonnes at 1.6g/t gold for 107,000 ounces at a 0.5g/t cut-off grade.

The Resource is classified into 380,000 tonnes of Indicated Resources and 1,730,000 tonnes of Inferred Resources.

Baggy Green gold prospect

The nearby Baggy Green prospect is located 5.5km to the southeast of Barns and shows potential to deliver additional resources which are both shallow and can materially add to the maiden 107,000 ounce Barns Mineral Resource.

A programme of reverse circulation drilling is scheduled to commence at Baggy Green in early October.

The Baggy Green target was originally revealed as a 3km long gold in calcrete geochemical anomaly in a survey completed by the Company. Subsequent systematic shallow RAB/aircore drilling tested the geochemical anomaly and discovered coherent zones of gold mineralisation in saprolite (Figure 2, see link below).

Potentially economic drill intersections at Baggy Green were made in early RC drill tests in 2004, with the discovery representing a true greenfields find.

Table 1 on page 7 of this report (see link below), presents a list of historical gold drill intersections recorded at Baggy Green.


Southern target zone

Drilling completed in 2004 in the southern part of the prospect defined a coherent zone of mineralisation dipping 23 degrees to the northwest. The mineralised zone is shown on the cross sections on Figures 3 and 4 (on page 4 - see link below).

The true width of the mineralised zone averages 27 metres in fresh rock, while it averages 14 metres in weathered rock.

Gold intersections through the mineralised zone range up to a maximum of 24 metres at 2.12g/t gold. Subintervals of better grade commonly occur and include 7 metres at 5.56g/t gold, 8 metres at 4.79g/t gold, and 7 metres at 2.31g/t gold.

Native gold is present in both weathered and fresh mineralised zones, often associated with anomalous copper. Significant gold mineralisation commences at depths of 35 metres below surface.

The dimensions, continuity and historical gold grades confirm the southern mineralised zone to be a worthy target.

Figure 5 (on page 5 - see link below) shows a plan projection of part of the southern zone. The dots indicate the position where drill holes pierce the mineralised zone, with the dots colour coded to indicate the gram x metre product (for example a 4 metre true width intersection at a grade of 2.0g/t gold would be 8.0 g x m Au).

The depth to the top of the mineralised zone is indicated by the set of structure contours shown in 50 metre depth increments.

The eastern limit of the deposit and the boundary between oxide and primary mineralisation is also shown on Figure 5.

The estimation of gold resources at the southern Baggy Green target requires drill spacing to be decreased from the existing coarse pattern, so reverse circulation holes in the upcoming programme will be sited on a nominal 50 metre pattern.

In consideration of potential future open pit economics, holes will only test the mineralised zone where it commences no deeper than 100 metres below surface. In this regard the gentle dip of the mineralised structure is advantageous, resulting in a shallow target area of up to 250 metres wide by 600 metres long as shown on Figure 5.

Drill holes will be also be focussed around the better grade areas as indicated by the higher gram x metre product information.

The dimension of the shallow target area, combined with the width of the mineralised zone, presents a significant volume of approximately 2.8 million cubic metres where gold prospectivity is high.

The delineation of attractive grade mineralisation in even a relatively modest portion of this volume can materially build on the established 107,000 ounce Barns Mineral Resource.

More broadly, the gold anomaly in saprolite associated with the southern mineralised zone has been established over a strike length of 2,000 metres, and remains open to the southwest (Figure 2, see link below).

Assuming that the same gently dipping mineralised structure extends along this 2,000 metre strike, the volume of potentially prospective rock to a depth of 200 metres below surface is estimated to be over 20 million cubic metres.

Much of this prospective volume is unlikely to be mineralised at economic grades, however its significant dimensions again present a longer term opportunity to build a relatively shallow resource inventory if only part of this volume is of good grade.


Northern target zone

Historical drilling in a second area at Baggy Green, located 1.9km north of the southern target, also recorded significant results.

Four reverse circulation holes were drilled to test below significant gold intersections recorded at the bottom of two adjacent, 50 metre spaced, aircore holes (Figure 6, see link below).

The reverse circulation holes recorded broad zones of gold mineralisation, including 36 metres at 0.78g/t gold and 27 metres at 0.58g/t gold in one hole, and 38 metres at 0.82g/t gold including 10 metres at 2.59g/t gold in another. Panning of drill samples confirmed the presence of native gold.

The 3 dimensional disposition of the mineralisation in the northern zone remains to be confidently established, however the results recorded in the historical drill holes warrant follow-up exploration and a number of holes will test this target further in the upcoming programme.

To view tables and figures, please visit:
http://abnnewswire.net/lnk/UR8QMZ7Z


About Adelaide Resources Limited:

Adelaide Resources Ltd. (ASX:ADN) is an Australian Securities Exchange listed company focusing on mineral exploration for gold, copper and lithium deposits. The company has built a highly prospective exploration portfolio of projects covering 7,969 sq kms within 21 exploration licences located in South Australia, Queensland, Western Australia and the Northern Territory. Adelaide Resources was incorporated on 23 December 1993 and subsequently listed on the ASX on 11 September 1996. The company's head office is in Adelaide, South Australia.

Adelaide Resources' vision is to be a sustainable minerals exploration company providing shareholders with risk managed discovery, development and mining opportunities.



Contact:

Adelaide Resources Ltd.
Chris Drown Managing Director
Nick Harding Executive Director, Company Secretary
Tel: +61-8-8271-0600
Email: adres@adelaideresources.com.au
www.adelaideresources.com.au