Encouraging Eritrean geochemical results

During November 2009, Gippsland Limited [ASX: GIP, DB: GIX] completed a reconnaissance drainage geochemical survey from within the three Prospecting Licences ('PLs') the Company holds in Eritrea (Adobha Project).  A total of eleven Thematic Mapper (TM) alteration targets were sampled by collecting 196 drainage samples associated with zones of argillic alteration and favourable host lithologies.
 
Anomalous results for gold, copper and zinc were recorded from all of the three 100 km2 PLs.
 
·         TM target E26 (411400E/1920400N) located within the northern Afah PL yielded a coherent copper anomaly 2.8 km long with six samples containing anomalous copper values (>65 ppm), with the highest being 193 ppm.  The copper anomaly is closely associated with an intense zone of argillic alteration measuring 6.4 x 1.4 km.  Anomalous, but non-coincident gold and copper values were also recorded from the target area.  Rock types within the anomaly include felsic volcanics, quartz-chlorite-sericite schist and chloritic lapilli tuff, all of which are known to be frequently associated with volcanogenic massive sulphide VMS deposits.
 
·         A low order but coincident gold, copper and zinc anomaly was identified at the E21 target (404800E/1905000N) within the central Merba West PL.  The close association of this anomaly with the TM alteration target, favourable geology and low sample density make this a priority for further sampling.
 
·         TM target E14 (403700E/1888100N) located within the Rabae Tahat North PL yielded the highest gold values with two samples containing 1.1 and 3.7 g/t.  These two samples located 1 km apart drain from a strong zone of argillic alteration measuring 1.5 x 0.4 km.  Two rock-chip samples from the same area returned 0.287 and 0.210 g/t Au.  The presence of widespread quartz-chlorite-sericite-schist containing pyrite makes this anomaly of particular interest.
 
Gippsland Directors are greatly encouraged by the results of this first pass widely spaced sampling programme which will now be followed up by infill drainage sampling to determine the source of the anomalous gold, copper, and zinc values.  This fieldwork will also involve a rock chip sampling programme and geological mapping.
 
The three PLs cover 300 km2 of ground that is prospective for both VMS mineralisation and structurally controlled gold mineralisation.  The PLs were selected following an interpretation of Thematic Mapper (TM) satellite data of a large part of northern Eritrea.  During this study, the Bisha and Zara (Koka) mineral deposit areas were used as type examples.  The Bisha deposit was selected as it represents a VMS deposit of the type that can be expected to occur in the area of interest.  Zara (Kola) was selected as it represents a structurally controlled gold deposit located in the southern part of the area of interest.
 
The three PLs are located in a geological setting similar to the Bisha gold-base metal deposit located some 174 km to the south that contains 1.44 Moz Au, 0.39 Mt Cu and 0.499 Mt Zn.  The structural setting of the area covered by the PLs is also similar to that found at the 0.94 Moz Zara (Koka) gold project located along strike some 65 km to the south.
 
As a result of the above results, Gippsland Directors have unanimously agreed to make application for a further three 100 km2 Prospecting Licenses in the Adobha region.  If successful, the additional licences will double the Company's holdings in Eritrea.
 
 
The Directors believe that Gippsland's first-mover advantage in this highly prospective province improves the likelihood of identifying substantial gold and copper deposits similar to those situated on strike to the south of the Company's PLs, and elsewhere in the Arabian-Nubian Shield.