High Grade Drill Results & Enlarged 2021 Campaign

Resources Plc / EPIC: CHF / Market: LSE / Sector: Mining 

24 February 2021 

Chesterfield Resources announces high grade drill results and commencement of an enlarged 2021 exploration campaign

Chesterfield Resources is pleased to announce results for its recent diamond drill programme on its copper, gold, zinc and silver exploration project in Cyprus.  The company also announces details of its forthcoming integrated exploration programme for the 2021 season, to commence in the next few weeks. 

·    High-grade polymetallic massive sulphides and native copper intersected at several locations on primary targets. Highlights include: 

o  2.65m grading 2.8% Cu, 3.0 g/t Au, 3.8% Zn, 30 g/t Ag. Total mineralized intersection width of 11.6m. 

o  2.45m grading 1.4% Cu, 3.0 g/t Au, 4.4%* Zn, 38 g/t Ag. Total mineralized intersection width of   16.6m. 

o  Native copper encountered in three holes, with copper visible in the core and, unusually, smeared on the drill bit. 

·   Successful proof-of-concept drilling programme leads to enlarged integrated exploration campaign for the 2021 season, scheduled to commence in mid-March with percussion drilling and AMT geophysics.

·    Extensive down-hole electromagnetic surveys and gravimetric surveys scheduled to be conducted in April.  

·    Diamond drilling campaign contracted to commence at the beginning of May. 

Said Neil O'Brien, Director of Exploration "Our targeting approach is clearly working as copper mineralization was intercepted in all three priority targets with two of them returning ore-grade results.  Perhaps the most difficult part of any programme is exploring for grade.  The presence of high-grade polymetallic sulphides at two of our targets is a big win as we now just need to focus on locating nearby large VMS bodies.  To help in this regard we are adding to our exploration toolkit two tried and tested targeting methods, gravity, and downhole EM, which will be very useful in helping us vector from these latest high-grade intercepts towards large, blind, massive sulphide bodies." 

Results have now been received and interpreted for the company's diamond drill programme, which was conducted in the last quarter of 2020. The objective of the programme was to discover ore-grade Volcanogenic Massive Sulphide (VMS) mineralisation at shallow depths of around 50-200 metres. The programme was also designed to reduce the search area for priority targets, as well as test and calibrate the company's AMT geophysics surveys. Assay results were delayed somewhat due to Covid-19 related bottlenecks.  

A total of 2,152.8m in 13 cored holes were drilled in late 2020. The focus of this diamond drill-testing programme was to test the top three ranked target areas, Evlim, Hillside and Kin Valley. The drilling was on the company's Troodos West area of licences where mining took place in the 1960s and 1970s, but only on deposits that had surface expressions and were therefore visible to miners. It is well-established that VMS deposits occur in clusters, but miners at that time did not have the geophysics technology, or degree of geological knowledge, to effectively explore for VMS deposits buried farther underground. Chesterfield's exploration programme is to use modern technology to locate such "blind" deposits buried at relatively shallow depths of around 50m to 250m sub-surface. 

At the target area Evlim, drill results clearly indicate a vectoring towards more massive and higher-grade VMS-type sulphide mineralization, with hole 20EV03 intercepting 11.6m of semi-massive sulphides at a depth of 147.9m that returned an average grade of 0.65% Cu, 1.0% Zn, 2.5 g/t Au, 8.9 g/t Ag including 2.65m grading 2.8% Cu, 3.8% Zn, 3.0 g/t Au, 30 g/t Ag.  Importantly, this lowermost, higher grade interval was found to be faulted off at its lower contact indicating that a larger deposit of this high-grade polymetallic mineralization may be present nearby, across the encountered fault.   

At the Hillside target area, drill hole 20HS02 encountered an interval of 16.6m of sulphide breccia mineralization at a depth of 137.9m that returned an average grade of 0.36% Cu, 1.1% Zn, 1.2 g/t Au, 9.7 g/t Ag including a lowermost interval of 2.45m @ 1.4% Cu, 4.4% Zn, 3.0 g/t Au*, 38 g/t Ag. The mineralization in this higher-grade interval is present as semi-massive to massive sulphide clasts caught up within a post-mineralization fault suggesting that the source of these polymetallic sulphide clasts came from a nearby high-grade massive sulphide body cut by this fault.   

At Kin Valley, three holes were drilled to test a very broad AMT geophysical anomaly. Common traces of visible native copper were identified within weathered clay-rich zones in each hole. Unusually, copper was observed smeared across the diamond drill bit. The presence of native copper is significant as it is likely to represent remobilized copper from a copper bearing sulphide body, located upslope of these holes. The company will now explore for this target.

The company's 2020 programme advanced its exploration at the West Troodos project from proof-of-concept stage by clearly demonstrating that ore-grade VMS-type polymetallic sulphide mineralization is present at the company's target depth. Results of the 2020 programme also clearly validate the targeting approach employed by the company to locate these previously unknown VMS mineralisation at its best ranked targets.  This provides confidence that larger deposits of similar ore-grade material sit nearby.  

Each of these stages of target development was designed to incrementally reduce the large regional search area across our West Troodos license block down to smaller specific target areas that were then ranked in priority based upon the results of the target development work that included analysis of historical work, geological mapping & prospecting, soil/rock geochemical sampling, structural analysis towards identifying VMS deposit traps, AMT geophysical surveying and percussion drilling.  From the results of this target development work several specific drill targets were defined and tested by core drilling with a diamond drill rig. 

2021 exploration campaign  

Chesterfield is now moving to the next phase of an enlarged exploration programme, scheduled to start in March, including further drill-testing at Evlim, Hillside and Kin Valley.  Target vectoring work, including AMT geophysics, percussion drilling and downhole electromagnetic ("EM") and gravimetric ("gravity") geophysics, followed by diamond drilling are planned to follow up on the successful results at these three priority target areas, in addition to other highly ranked targets that warrant drill-testing. 

Around 15 percussion drill holes are planned during March and April, to test target zones for presence of blind sulphide mineralisation and to provide boreholes for numerous downhole EM surveys. To increase the scope of these surveys, the percussion holes will be drilled generally deeper than those last year, at around 200-300m. The holes will be lined to enable the survey team to winch a high precision probe down the hole, which acts as a receiver to an electrically charged copper loop on the surface. VMS deposits typically act as good electrical conductors whose conductivity can be picked up by the downhole receiver. Interpretation of the electromagnetic data gathered will allow the survey to potentially identify sulphide deposits some 50m to 100m distance around the hole. This dramatically increases the search area of each hole. Downhole EM is a well-proven discovery tool used at this detailed stage of VMS exploration. 

The company will be using gravity surveys on the project for the first time. This survey measures minute changes in the earth's gravitational pull and has to be finely calibrated to the exact altitude of the survey measuring device. It provides a means of calculating the density property of subsurface materials. Massive sulphide material is typically much denser than the lavas or sedimentary rocks around it and so gravity surveys can detect large massive sulphide bodies.   Any resulting coincident downhole EM and gravity anomalies are considered high priority drill targets as they indicate a dense and conductive body which could be a large tonnage VMS deposit. 

The company will be further extending its AMT (Audio-Magnetotellurics) surveys this year from those conducted in 2020. An AMT survey works by amplifying and measuring variations in electrical charges that already exist naturally in the earth's crust, from an accumulation of lightning strikes globally. AMT is particularly suited to shallower mineral surveys such as Chesterfield's exploration project in Cyprus and can also provide a useful indication of the depth at which mineralised deposits may occur.  

The company's technical team will combine all three geophysical survey techniques, down-hole EM, Gravity and AMT to produce coincident data to help identify target areas more likely to host mineral deposits. This information will be used to vector a diamond drill programme to commence in May of approximately 2000 metres.  

Chesterfield is working to secure the programme from the impact of Covid travel restrictions. The percussion drill and crew are already in-country. The diamond rig is also in-county at Chesterfield's storage facility. The diamond drill crew, AMT survey team and Chesterfield's UK geological team will all enter Cyprus under its quarantine programme.  

Said Martin French, Executive Chairman, "As they say in the mining business 'grade is king' and we have encountered high grades across four revenue metals and on two discrete targets. The native copper intercepts are also indicative of a nearby deposit. The grades discovered in the 2020 diamond programme fulfilled our primary objective, and exceeded our expectations. The next objective is to locate nearby larger deposits of similar grade material to delineate a commercial discovery. 

Planning for our 2021 campaign is now advanced and we expect to mobilise our percussion drilling programme, and three separate geophysics surveys, commencing in just a few weeks' time. We are entering a period of considerable activity for the technical team and will be posting regular updates in coming weeks." 

About Chesterfield Resources  

Chesterfield Resources is a copper, gold, zinc, silver exploration company active in Cyprus, where it holds the largest mineral exploration licence area of any operator on the island. Polymetal International, the FTSE100 mining group, recently announced it had taken a 23% strategic investment in Chesterfield via a placing of new shares, and has appointed a director to the board. 

Cyprus is regarded as a high quality exploration location. It is a member of the EU, and its legal system is based on English common law. An opportunity exists because there has been minimal exploration activity on the island in the last 46 years since the invasion by Turkey in 1974 put a halt to what had been a very active mining industry.  

Since that time, exploration technology and geological knowledge has improved significantly. The company is exploring for VMS (Volcanognic Massive Sulphide) deposits, which typically occur in stacks and clusters. Historically only those deposits which were visible from surface have been mined. It is believed that many more deposits remain undiscovered buried near surface, and the company is using modern techniques to locate them.  

While copper is the main exploration target, it is noteworthy that gold was not historically exploited in Cyprus as its price was pegged to just $35 per ounce when the mining industry was active in the 1960s and 1970s (less than 50 times today's price). Gold has been encountered in several locations in the exploration target area and is an important part of the exploration objective.  

The current focus of exploration is in the Troodos West group of licences belonging to the company, with around 30 defined targets in an area measuring 10km by 10km. The objective is to discover several VMS deposits in close proximity to each other to create a mining project with a centralised processing unit.  

The company has just announced high grade  results from its late season 2020 drilling campaign. These will be used for targeting an enlarged integrated 2021 geophysics, percussion and diamond drilling exploration campaign which is under advanced planning. The company is also appraising new business opportunities within the sector.  

Chesterfield Resources is committed to world-class environmental standards in all of its operations to mine copper, which is essential to developing clean technology projects worldwide. The company hopes to develop industry and opportunities for the benefit of the Republic of Cyprus.  

Competent Person 

The information in this announcement that relates to exploration results is based on information compiled by Michael Parker, who is a Member of the Australasian Institute of Mining and Metallurgy. Michael Parker has reviewed this announcement and consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears 

* in one hole indicated by the asterisk, 20HS02, semi-quantitative gold content has been determined by Aqua Regia digestion followed by analysis with ICP-MS ICP-AES methods. Fire assay analyses are underway on these samples. The correlation between the two methods in this context is not expected to substantially alter the exploration results.

Market Abuse Regulation (MAR) Disclosure 

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement. 

**ENDS** 

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