Adelaide Resources Limited Baggy Green Set to Increase Local Gold Resources

Adelaide - Adelaide Resources Ltd. (ASX:ADN) advise the preliminary interpretation of the Baggy Green drill data, incorporating results from the recent RC programme, confirms the prospect an materially add to the existing 107,000 ounce gold resource at the nearby Barns deposit.

- Assays from the remaining Baggy Green holes include gold intersections in three adjacent, 50 metre spaced holes on the southern-most drill traverse.

- Results from the three holes include 11 metres at 1.00g/t gold from 36 metres downhole; 8 metres at 1.53g/t gold from 44 metres, including 2 metres at 4.74g/t gold; and 4 metres at 1.44g/t gold from 82 metres downhole.

- A hole drilled west of BGRC-1223 (11 metres at 9.32g/t gold), and BGRC-1222 (16 metres at 5.72g/t gold), intersected low grade gold in the target position.

- Baggy Green is a gently dipping structurally controlled deposit. In common with other deposits, it exhibits variations in gold grade in the plane of the structure including high grade shoots and areas that are weakly mineralised.

- Better grade gold zones remain open to the north and south of a 500 metre long area tested in detail, while very few historical RC holes have tested elsewhere along the entire 3,000 metre long target.

Introduction

The wholly owned Baggy Green gold prospect is located less than six kilometres from the Barns gold deposit on the Eyre Peninsula gold project which comprises eight tenements covering 2,807 km2 in the Gawler Craton (Figures 1 and 2 in link below).

On 4 November 2016, the Company announced the results from the first ten Reverse Circulation (RC) holes from a drill programme which totalled 23 holes for 2,515 metres at Baggy Green.

These results included the two best intersections recorded to date from the prospect. Adjacent 50 metre spaced holes BGRC-1222 and BGRC-1223 respectively recorded 16 metres at 5.72g/t gold and 11 metres at 9.32g/t gold.

Final Baggy Green assay results

Assaying of drill samples from the last 13 holes has been completed, with further gold intersections returned.

Table 1 (page 7 in link below) includes a listing of the gold intersections in all 2016 programme holes, along with drill hole collar location and set-up information.

Section 6362820mN

Three adjacent 50 metre spaced holes on the southern-most section drilled during the programme returned gold intersections from the targeted shallow westerly dipping mineralised structure (Figure 3 in link below).

Hole BGRC-1238 recorded 11 metres at 1.00g/t gold from a downhole depth of 36 metres (vertical depth of 32.6m). BGRC-1239, drilled 50 metres west, intersected 8 metres at 1.53g/t gold from 44 metres downhole, including 2 metres at 4.74g/t.

BGRC-1240, drilled 50 metres further west, recorded 4 metres at 1.44g/t gold from 82 metres downhole, and a second zone of 8 metres at 0.65g/t gold from 95 metres downhole.

The intersections quoted in each of these holes are internal to two subparallel zones of mineralisation which appear to be thickening in the downdip direction. Mineralisation remains open down-dip and to the south presenting future drill targets.

Section 6363140mN

Early programme holes BGRC-1222 and BGRC-1223, which recorded intersections of 16 metres at 5.72g/t gold and 11 metres at 9.32g/t gold, fall on section 6363140mN.

The high grade mineralisation in BGRC-1222 and BGRC-1223 remained open down-dip, and BGRC- 1241 was drilled to test this target. BGRC-1241 encountered low grade mineralisation in the target position including an upper zone of 19 metres at 0.19g/t gold from 81 metres downhole, and a lower zone of 5 metres at 0.31g/t gold from 126 metres downhole (Figure 6 in link below).

The results on section 6363140mN confirm the down-dip dimension of the high grade shoot intersected in BGRC-1222 and BGRC- 1223 is approximately 100 metres.

The high grade shoot on 6363140mN remains open to the north presenting a future target area warranting further drill testing.

Baggy Green interpretation

Figure 2 shows the locations of four drill traverses through the southern mineralised zone at Baggy Green, with the traverse cross sections shown in Figures 3 to 6. The sections are located in a 500 metre long area that has now been drilled in some detail.

The mineralised zone an all four sections is interpreted to be associated with a gently west-northwest dipping shear zone exhibiting between one and three sub-parallel lodes of variable gold grade. The continuity of the mineralised zone both on and between cross sections is robust.

Grade variation in the plane of mineralisation is a common feature in structurally controlled gold deposits, and the results at Baggy Green confirm areas of both good grade and weak grade are present.

The gold endowment of the Baggy Green structure in the area of more detailed drilling is illustrated in Figure 7 with the drill hole intersection points colour coded for true width gram metre product.

Two unclosed regions of better gold grade have emerged so far at Baggy Green, one at each of the northern and southern limits of recent drilling, presenting future exploration targets.

Baggy Green North target

Six holes were drilled at Baggy Green North to follow-up broad gold intersections recorded in historical drill holes, and to determine the mineralised zone's dip and strike.

On section 6364880mN, BGRC-1231 returned 20 metres at 0.31g/t gold from 66 metres, and BGRC-1236 hit 24 metres at 0.14g/t gold. On section 6364830mN, BGRC-1232 intersected 17 metres at 0.18g/t gold, and BGRC-1235 recorded 1 metre at 1.07g/t gold from 19 metres.

The intensity and dimension of the associated hydrothermal alteration system at Baggy Green North is notable, potentially indicating the presence of a large system. Furthermore, the results are consistent with a mineralised zone striking east-west and dipping to the north, requiring a re-oriented drill pattern for future evaluation.

Next Steps

The 2016 RC programme data has been incorporated with historical data and 3-D remodelling is underway.

Preliminary interpretation confirms that the 500 metre long part of the Baggy Green prospect now drilled in some detail shows excellent potential to deliver shallow resources that can materially build on the maiden 107,000 ounce gold Mineral Resource at the nearby Barns deposit.

The next work at Baggy Green will comprise additional drilling to test the higher grade gold zones which remain open to the north and south of the 500 metre zone of detailed drilling, and the estimation of a maiden resource.

Mineralised drill sample from the recent programme has also been retained for metallurgical testwork.

The collar locations of all deeper RC and diamond holes at Baggy Green are shown in Figure 2. Very few deeper holes have been drilled beyond the 500 metre long area of detailed testing, presenting worthy exploration targets where success could significantly increase the resource potential of the prospect over and above that already established in the area of detailed testing.

To view tables and figures, please visit:
http://abnnewswire.net/lnk/6CO37507


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.

Source: Adelaide Resources Ltd.



Contact:

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