Yugo Metals Strikes High-Grade Gold at Erak, Sinjakovo Project

Yugo Metals Reports Further High-Grade Gold Intercepts at Erak Prospect in Bosnia-Herzegovina

Yugo Metals (ASX:YUG) has reported additional diamond drilling results from its Erak Prospect at the Sinjakovo Project in Bosnia-Herzegovina, with the Yugo Metals Erak gold drilling results at Sinjakovo Project Bosnia-Herzegovina continuing to impress. Drillhole ERDD006 returned 36.1 metres at 2.3 g/t gold, including a high-grade interval of 1 metre at 42.5 g/t gold. The results add to a growing dataset supporting what the company describes as a coherent gold discovery within the Tethyan metallogenic belt, a mineral-rich geological province spanning southeastern Europe.

According to the announcement, nine diamond drillholes have now been completed at Erak for a total of 1,057 metres, with gold mineralisation reported to remain open in multiple directions. Drilling is ongoing, with further holes planned to test the extent of the system.

The Latest Results: A Summary of Drillhole Intercepts

The newly reported results span four drillholes, labelled ERDD006 through ERDD009, each contributing to the company's understanding of the mineralised system at Erak.

ERDD006 stands out among this batch. In addition to the headline 36.1-metre intercept, the hole contains two separate high-grade zones:

• 3 metres at 14.5 g/t gold from 51.8 metres, including 1 metre at 42.5 g/t gold
• 1.9 metres at 16.0 g/t gold from 86 metres, including 0.9 metres at 26.6 g/t gold

ERDD009 also warrants attention, with its headline 10.4 metres at 2.6 g/t gold anchored by a sharp 1.2-metre interval grading 20.9 g/t gold, indicating a potentially significant high-grade structure within the broader mineralised zone.

Understanding Phyllic Alteration and Its Relevance to the Discovery

One of the more technically important observations in the announcement relates to the consistent association between gold mineralisation and a hydrothermal alteration style described as "phyllic" alteration.

Phyllic alteration refers to a change in rock composition caused by hot fluids carrying dissolved minerals moving through cracks and fractures in the earth's crust. These fluids react chemically with the surrounding rock, replacing original minerals with a distinctive combination of quartz, sericite (a fine-grained mica mineral) and pyrite (an iron sulphide mineral). Geologists commonly recognise this alteration style as an indicator of gold-bearing hydrothermal systems.

This matters to investors for several reasons. Phyllic alteration zones tend to be geologically extensive, often following structural trends across considerable distances. They are also frequently associated with gold deposition, since the same fluids responsible for the alteration typically transport and deposit gold. Consequently, geologists can use the alteration footprint as a guide when planning further drilling.

At Erak, core photographs from ERDD006 reportedly show a strong phyllic alteration zone coinciding directly with the best gold grades. According to the announcement, the alteration has developed along a layer-parallel quartz-porphyry intrusive rock unit, with gold-bearing pyrite present at an estimated 5 to 15 percent abundance.

Key Terms Explained

• g/t Au refers to grams of gold per tonne of rock, the standard unit used to express gold grade.
• True thickness describes the actual width of a mineralised zone once corrected for the angle of the drillhole, as distinct from the longer down-hole measurement.
• Phyllic alteration is a hydrothermal alteration style producing quartz, sericite and pyrite, commonly associated with gold-bearing systems.
• PQ diameter refers to a large-format diamond drill core size, providing a greater sample volume for analysis.
• VWAP stands for Volume Weighted Average Price, a metric used in this case to determine option vesting conditions.

Mineralisation Remains Open as Drilling Continues

According to the announcement, positive intercepts at Erak remain open in several directions, meaning the mineralised system has not yet been closed off by drilling that returned no gold. This leaves open the possibility that the system could extend further along strike, at depth, or laterally.

The company has indicated that access tracks are being prepared to relocate the drill rig to the eastern part of the Erak Prospect, the location of the best surface trench result recorded to date at 61 metres at 1.5 g/t gold (as previously reported on 25 January 2023). This eastern zone has not yet been tested by drilling.

The current drilling programme has been described as relatively close-spaced scout drilling, with intercepts spaced between 20 and 50 metres, designed to confirm the presence of mineralisation and establish geological trends. Furthermore, the company has stated that, in certain parts of the prospect, current drill spacing may be sufficient to satisfy prerequisites for an inferred resource estimate, though resource estimation studies have not yet commenced.

Planned Activities Over the Coming Months

Yugo Metals has outlined several planned activities for the remainder of the year:

1. Continued diamond drilling at Erak, with additional holes planned to test extensions of the mineralised system
2. Relocation of the drilling rig to the eastern part of the Erak Prospect, coinciding with the location of the 61-metre trench result
3. Receipt and ongoing reporting of remaining assay results from the current drilling campaign
4. Initiation of preliminary metallurgical testwork to inform future technical and economic studies

CEO Commentary

"The drilling at the Erak gold discovery is delivering fantastic results. These results validate the Company's geological model and highlight the potential for Erak to host a Tier-1 gold asset. The mineralisation remains open in multiple directions. Drilling is ongoing and further drillholes are planned to delineate the extent of the gold mineralisation. The drilling is yet to commence at the location of the best trenching result of 61m @ 1.5 g/t gold. In the meantime, we are organising preliminary metallurgical testworks to inform the future technical and economic studies."

Petar Tomašević, Executive Director and CEO, Yugo Metals

Project Context and Points of Interest for Investors

The Erak Prospect forms part of Yugo Metals' wholly owned Sinjakovo Project in Bosnia-Herzegovina, situated within the Tethyan metallogenic belt, a geological province recognised for hosting a number of base and precious metal deposits across southeastern Europe.

Several features of the reported results may be of interest to investors monitoring the Yugo Metals Erak gold drilling results at Sinjakovo Project Bosnia-Herzegovina as the project advances:

• Consistency across multiple holes. Four of the six reported drillholes returned intercepts above 1 g/t gold, with two exceeding 2 g/t gold over meaningful widths.
• High-grade intervals within broader mineralisation. Several intercepts exceeding 20 g/t gold were recorded within wider, lower-grade zones, a feature that can influence project economics depending on continuity and scale.
• Reported geological coherence. The mineralisation is described as dipping at approximately 35 degrees to the north, with drilling conducted at near-orthogonal angles, meaning true thicknesses are close to down-hole lengths.
• No top-cuts applied. The company has stated that no top-cuts have been applied to reported grades, noting that high-grade values, including the 42.5 g/t intercept, have been validated through repeated assaying across more than one drillhole.
• Untested target area. The eastern zone of Erak, coinciding with the best surface trench result, has not yet been drill-tested.
• Location near infrastructure. The company states its projects are located near existing infrastructure and transport routes.

Investors should note that resource estimation has not commenced, and any references to a "Tier-1" asset reflect management commentary rather than a confirmed classification.

Board Remuneration Update

Separately, Yugo Metals announced that, subject to shareholder approval at the upcoming Annual General Meeting, the board will be granted unlisted share options as part of an annual remuneration review.

The options carry a zero exercise price and vest only if the company achieves a 20-day VWAP greater than $0.10 per share within three years of issue. Full terms will be included in the Notice of Meeting for the AGM.

Outlook

Yugo Metals continues to progress its maiden diamond drilling campaign at Erak, with mineralisation reported to remain open and a previously untested target area now being prepared for drilling. In addition, the receipt of outstanding assay results, continued drilling through the remainder of the year, and the initiation of preliminary metallurgical testwork represent the near-term milestones investors may wish to monitor.

However, it is worth noting that the Yugo Metals Erak gold drilling results at Sinjakovo Project Bosnia-Herzegovina remain subject to further confirmation as the programme progresses, and investors should consider management commentary in the context of early-stage exploration. As results continue to accumulate, the company's geological model will be further tested and refined across both the current and eastern drill target areas.

Want to Learn More About Yugo Metals and the Erak Gold Discovery?

As diamond drilling continues to deliver high-grade gold intercepts at the Erak Prospect, with mineralisation remaining open in multiple directions and a highly prospective eastern target zone yet to be tested, Yugo Metals (ASX:YUG) represents a compelling early-stage exploration story unfolding in one of Europe's most recognised mineral belts. To learn more about the company, the Sinjakovo Project, and how the Erak discovery is developing, visit the official Yugo Metals website at www.yugometals.com.