Operational Update and Large New Target Identified

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

6 May 2021

Operational update and large new target identified

Chesterfield Resources is pleased to provide an operational update on its copper, gold, zinc and silver project in Cyprus.  The company last month commenced an integrated exploration campaign for the 2021 season.

·    Good progress on percussion drilling and geophysics campaigns

·    Discovery of a compelling large new anomaly, which is now confirmed as a high-priority drill target

·    Down hole EM (electro-magnetic) campaign to commence imminently

·    Additional new geophysics campaign commissioned

·    Diamond drilling to start within weeks

Said Martin French, Executive Chairman, "We are making excellent progress with our 2021 exploration campaign in Cyprus. We have completed both our first phase geophysics programmes and also our percussion drilling programme of 14 holes. We are excited that the survey has identified a significant buried geophysical anomaly, similar in scale to the footprint of the large historic Limni mine nearby. Results from previous drilling nearby indicate that this could be a mineralised system. This has now become a new high-priority target that we have named "Olive".

A specialised survey team will arrive from Germany in a few days to start the next phase of geophysics work which involves lowering an electromagnetic probe down various drill holes. A further type of survey has also just been commissioned. We are very busy on the ground in Cyprus and are looking forward to our diamond drilling which is just weeks away."

Completion of first phase of geophysics in 2021 exploration campaign

In early April the company commenced two types of geophysics surveys, AMT (Audio-Magnetotellurics) and gravity, to provide geological data in various areas to help target a diamond drill core-sampling programme in the summer. The company also commenced a percussion drill programme to facilitate a subsequent down-hole EM (electro-magnetic) survey. The exploration programme is running on schedule with the AMT, gravity and percussion drill programmes now completed.

Chesterfield has just completed taking readings from 243 probe stations which covered a combined area of 2.5 km².   An AMT survey works by using a probe to amplify and measure 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 has also just completed taking readings from 845 data stations which covered a combined area of 5 km². A gravity survey involves taking minute measurements of the Earth's gravitational field with a gravity meter on surface. This data is used to calculate subsurface densities to model the underlying rock structures and, most importantly, to indicate possible large, massive sulphide targets.  Both surveys were focussed on the three main target areas within the company's Troodos West suite of licences, Evlim, Hillside and KinValley.  Some secondary target areas were also surveyed. 

Identification of a large new high-priority target, "Olive"

Following encouraging diamond drilling results in 2020 at Chesterfield's Hillside target, a gravity survey was conducted in the area to the west, including around the nearby Orchard target. The survey grid covered an area of 2.8 km² with 297 readings taken on a 100m x 100m grid. The objective was to identify areas of excess density to the surrounding host rocks which could indicate buried VMS mineralisation.

The results of the gravity survey highlighted a compelling North-South trending structure, manifesting as a residual gravity high. This anomaly extends 1 km in length and up to 300m in width and may be indicative of a type of early-forming subsidiary basin that often host VMS deposits. Similarly, orientated structures are associated with trapping mineralisation at the nearby historic Limni mine, which is of a similar scale to the new anomaly. The Limni mine is recorded to have produced around 8.1 million tons of ore yielding approximately 90,000 tons of copper.

The large structure lies between the Orchard and Hillside prospects, which are 500m and 600m away respectively. Prior diamond drill results at Orchard and Hillside would appear to back up the theory that this anomaly could be a large VMS deposit. In 2018, diamond drill hole 18AS01 intercepted a zone of pyrite and chlorite alteration with anomalous Zn-Pb mineralisation; this geochemistry is typically found at the periphery of VMS systems. Additionally, the 2020 drilling campaign at Hillside intercepted polymetallic, high-grade mineralisation, as seen in the results from diamond drill hole 20HS02:

·    16.6m @ 0.36% Cu, 1.07% Zn, 1.14 g/t Au, 9.7 g/t Ag from 137.90m-154.50m

·    Including 2.45m @ 1.37% Cu, 4.41% Zn, 2.90 g/t Au, 37.85 g/t Ag from 143.55m-146.00m

The higher-grade interval within 20HS02 was present as semi-massive to massive sulphide clasts entrained in a post-mineralisation fault suggesting that the fault had cut a nearby massive sulphide body. The proximity of the gravity high to these two known mineral occurrences makes this a prime target for follow-up work in locating a possible larger body of mineralization at depth. The new target has been christened "Olive".

The exploration team has commissioned an infill grid of gravity points in the survey area to increase resolution of the gravimetric data to 50m x 100m. This will then be compared with AMT data. Any coincidence in these independent geophysical signatures will allow for a greater level of confidence in designing drill holes to test the target.

Percussion drilling and down-hole EM programmes

The next phase of geophysics can now commence. A specialised team is due to arrive at the end of the week from Germany to conduct a down-hole EM programme.

Chesterfield has now drilled 14 percussion holes which have been lined to enable the 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 resistivity 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.

Further geophysics programmes commissioned

As a result of data analysed so far, the exploration team has focussed its attention on a number of areas that warrant closer investigation. A decision has therefore been taken to commission another type of survey called surface EM (electro-magnetics). This electro-magnetic survey is based on the response of the ground to  electromagnetic fields composed of an alternating electric intensity and magnetizing force. The electrical field is generated by passing an alternating current through a coil (loop of wire called a transmitter coil) placed over the ground. This is normally in the form of a fixed loop, although the company and its geophysics advisors are considering a "moving loop" survey which involves taking readings and then repeatedly moving the loop to form a grid pattern.

This new survey will also commence shortly. Five additional percussion holes are also planned. In order for the survey results to be interpreted and used for target vectoring, the company's diamond drill programme has been re-scheduled slightly and will now commence in approximately five weeks' time.

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 exploration team is led by senior geologists: Neil O'Brien, formally Head of Exploration, Lundin Mining, Dave Cliff, previously Head of Exploration Europe, Rio Tinto, and Mike Parker who previously worked for First Quantum mining for 20 years.

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 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. The campaign is now well underway and has already delineated a large new drill target called Olive. The company is

Chesterfield is also actively appraising new business opportunities within the sector and expects to significantly enlarge its exploration footprint.

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. 

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**

For further information, please visit www.chesterfieldresourcesplc.com or contact: