Mongolian Resource Play

[Ed Monton]

UGL cuts 3.38 g/t Au over seven metres at South Valley


2005-05-31 17:01 ET - News Release

Mr. Paul McKenzie reports

PROGRESS REPORT ON COPPER AND GOLD DRILL PROJECTS, MONGOLIA

UGL Enterprise Ltd. has provided a progress report on the company's copper and gold projects in Mongolia, including the Shavar Uul, the Bayan Undur and the Khondloy properties. A summary of results to date from the diamond drill program on the South Valley property is also provided.

Exploration is under way and continuing on the company's 100-per-cent-owned Mongolian copper-gold portfolio. Based on preliminary geological and sampling completed in the last field season, UGL's geologists have recommended a program of further detailed mapping, prospecting and sampling. The program will commence on three projects -- the Shavar Uul, Bayan Undur and Khondloy -- to better define Cu-Au targets. This exploration program will determine the areas within the licences that will be followed up with geophysics and diamond drilling.

Exploration crews are being mobilized with the plan to complete the exploration program over the next three months to allow for potential diamond drilling prior to the winter season. The three licences to be worked are all situated within the Gobi area of Mongolia.

South Valley summary of drill results

The South Valley property is located near Choilbasen in the Dornod province and is held under an option agreement with a Mongolian licenceholder to earn a 60-per-cent interest. The property is prospective for copper-gold porphyry mineralization, and previous surface sampling and trenching work indicated four anomalous zones for copper and gold.

The company completed a diamond drill program of 12 holes (with one additional abandoned hole) comprising 3,429 metres. Ten of the 12 holes were directed at porphyry targets, defined by soil and rock geochemistry and geophysics (magnetics and induced polarization). Holes SV-11 and SV-12 were directed at geological targets outside the interpreted porphyry system. All holes except SV-11 and SV-12 returned significant and/or anomalous values of copper, gold and silver. The following is a presentation of only the higher-value intervals, however wide zones of anomalous values of copper and gold mineralization were also intersected. Holes SV-1 to SV-4 were previously released (see news in Stockwatch dated Oct. 22, 2004), but the highlights are restated below.

 
  
                            Mineral- 
                    Inter-   zation 
 Hole   From   To  section  Au  Ag  Cu  
 No.     m     m      m    g/t  g/t  %           
  
 SV-01 245.0 265.8  20.8  0.82  2.6 
 SV-02 205.8 208.8   3.0  1.27 12.7 
 SV-03 274.0 280.0   6.0  0.26  6.7 
 SV-04  28.0 249.0 221.0  0.09  3.7 0.20 
 Incl.  10.0  21.0  11.0  1.07 18.9 0.06 
  
  
 Above data were previously released and new data follow below. 
  
  
                            Mineral- 
                    Inter-   zation 
 Hole   From   To  section  Au  Ag  Cu  
 No.     m     m      m    g/t  g/t  %           
  
 SV-05 188.0 205.0  17.0  1.27  0.8 
 SV-06  43.0  56.0  13.0  0.20  3.1 0.20 
 SV-07 Abandoned at 41.0 m 
 SV-07A 23.0 217.0  94.0  0.10  1.8 0.10 
 SV-08  21.0  46.0  25.0  0.06  0.9 0.12 
 SV-09  67.0 121.0  54.0  0.10  8.2 0.32 
       260.0 386.0 126.0  0.10  2.3 0.20 
 SV-10  73.0  80.0   7.0  3.38 24.2 0.16 
       190.6 240.6  50.0  0.23 13.3 0.29 
 SV-11 No significant values 
 SV-12 No significant values 
  
 

.........


Significant gold and copper values contained within multiphase sulphide mineralization related to a complex porphyry deposit have been encountered in 10 diamond drill holes in this phase 1 program. The target is a large, bulk, minable porphyry deposit with significant values of gold, copper and silver, and occasionally byproduct credits of lead and zinc. The project remains under review with plans for 2005 not yet finalized.

Drilling was conducted by Can-Asia Drilling of Mongolia, with logistical support supplied by Mine Info of Mongolia. This exploration program was under the direction of Robert Weicker, PGeo, the company's qualified person under National Instrument 43-101, who oversaw the preparation of this section of this release. UGL maintains a quality control program to ensure best practice in sampling and analysis of surface and drill core samples. All rock samples are prepared and analyzed by SGS Mongolia LLC (formerly SGS Analabs) of Ulan Bator, Mongolia. Standard and blank samples were inserted every 20th drill core sample.