WINNIPEG, MANITOBA--(Marketwire - June 14, 2012) -
San Gold Corporation (TSX:
SGR)(OTCQX:SGRCF) today announced an updated
mineral resource and mineral reserve estimate for the Company's 100%
owned Rice Lake Project located in
Bissett, approximately 235 kilometres
northeast of
Winnipeg, Manitoba, Canada. The Rice Lake Project has a
permitted, modern gold mill currently processing ore at a capacity of
2,500 tons per day, as well as modern surface infrastructure, including a
licensed tailings management facility and is connected to the
Manitoba
power grid system.
Highlights
- 93% increase in inferred mineral resources to 3.5 million ounces of gold.
- Drilled approximately 350,000 metres in 925 holes in 2011.
- To date, exploration costs have been approximately $26 per ounce of resource discovered.
- Current measured and indicated resources will allow mid-term production planning.
- Measured and indicated resources will be upgraded
to proven and probable reserves as detailed mid-term to long-term mine
plans are developed.
- Exploration success on Shoreline Basalt Unit continues.
- All deposits remain open along strike and at depth.
Mineral Resource and Mineral Reserve Summary, as of March 31, 2012
"The sheer scale of the increase in inferred mineral
resources announced today for our Rice Lake Project confirms the immense
value being realized by our aggressive approach to exploration. In
addition to greatly improving the understanding of the region's geologic
structure, this drilling continues to prove invaluable for developing
and refining our current mine plans. The knowledge accumulated during
the past few years of mining has also helped us construct a mineral
reserve profile that is congruent with our operational plans and marks a
significant step forward for the Company. We've achieved our stated
goal of significantly increasing our inferred mineral resources, which
are high-quality resources as they are readily accessible from existing
infrastructure. This will allow us to produce mid-term to long-term mine
plans over the next year," said San Gold President and CEO, George
Pirie.
The following table provides a detailed summary of the Company's mineral resources and mineral reserves, as of March 31, 2012:
San Gold Rice Lake Project Mineral Resources and Mineral Reserves, as of March 31, 2012
NOTES TO MINERAL RESOURCE AND MINERAL RESERVE ESTIMATE TABLE:
- Mineral resource and mineral reserve estimate has been
made in accordance with the Standards of the Canadian Institute of
Mining, Metallurgy and Petroleum and National Instrument 43-101.
- Tonnage and in situ ounce estimates have been rounded to the nearest thousand.
- Proven and probable mineral reserves are included in the measured and indicated mineral resources.
- The mineral reserve estimate is based on a 2.7
metre minimum mining width, a tonnage factor of 11.4 cubic feet per ton
(SG 2.7 to 2.8), a gold price of US$1,260 per ounce (100% exchange) and a
93% mill recovery.
- A 5.14 g/tonne (0.15 ounce/ton) cut-off grade has
been applied to deposits accessed from the Rice Lake mine shaft, while a
3.09 g/tonne (0.09 ounce/ton) cut-off grade has been applied to
deposits accessed via the Hinge/007 ramp.
- Mineral resources were estimated with a block model
utilizing inverse distance squared methodology on a block size of 3
feet x 3 feet x 3 feet.
- Assays were capped at 102.9 g/tonne (3.0 ounces/ton) for drill holes and 34.3 g/tonne (1.0 ounce per ton) for chip samples.
- Inferred mineral resources are not in the current mine plan and therefore do not have demonstrated economic viability.
- As per section 4.2(1) J (ii) of National Instrument
43-101, the change in mineral reserves for the Rice Lake Project does
not constitute a material change in the affairs of the Company. Refer to
the National Instrument 43-101 Technical Report filed on SEDAR, dated
October, 2010, by GeoEx Limited.
- The mineral resource and mineral reserve estimate
as of March 31, 2012 was prepared under the supervision of Dale Ginn,
P.Geo, a Qualified Person within the meaning of National Instrument
43-101.
- The data in this table was prepared by the
Company's Rice Lake Project geology and engineering teams led by: Chief
Geologist, Doug Berthelsen (P.Geo); Chief Engineer, Joe Hunter (P.Eng);
and Resource Geologist, Shawn Horte.
- The company is a producing issuer as per National Instrument 43-101 section 5.3.
MINERAL RESOURCE AND RESERVE ESTIMATE
Historically, resources at the Rice Lake Project were
estimated using the polygonal method. More recently, with the use of
Amine® software, the measured and indicated mineral resource estimate is
derived by creating a block model.
The construction of the block model begins by creating 3D
wireframes or meshes around mineralization as determined from both
underground and surface drilling, underground mapping and sampling,
and/or surface mapping and sampling. Once constructed, the drill hole
and chip assays enveloped in the meshes are composited by the software
and used to interpolate grade blocks. The resource block model was
estimated utilizing inverse distance squared methodology on a block size
of 3 feet x 3 feet x 3 feet.
The mineral resources at the Rice Lake Project are classified
as measured, indicated, and inferred categories based on the following
criteria:
1) Measured Mineral Resource:
A resource block can be classified as measured if its
vertical and lateral extents are bounded by mine development including
sills, lifts, and benches that has been sampled; or the block has been
projected to a maximum of one mine level (approximately 50 feet) from
mine development and there are diamond drill hole intersections to
indicate the continuity of the structure below or above the development.
2) Indicated Mineral Resource:
A resource block can be classified as indicated if it has
been projected to a maximum of one mine level (50 feet) from development
if there is no drilling beyond to indicate its continuity, or the block
has been sampled by tightly spaced diamond drill holes on structures
that have either been previously mined or mapped and sampled at surface.
A closely spaced diamond drill program is generally less than 100 feet
between drill hole intersections.
3) Inferred Mineral Resource:
Inferred mineral resources are determined using the polygonal
method from widely spaced diamond drill holes (greater than 100 feet
between intersections) whose structure can be extrapolated from previous
production history and relevant geologic data.
The Company's mineral reserve estimate is developed by
incorporating measured and indicated mineral resources on which detailed
near-term mine planning has been applied to date for the Rice Lake
Project. Each mining area has been analyzed and a distinct extraction
ratio and dilution factor was calculated using a minimum mining width of
2.7 metres with a mill recovery of 93%. Mineral resources which can be
shown to be economically extracted at a gold price of US$1,260 per ounce
are assigned to proven and probable mineral reserve status based on
geological confidence and professional opinion within the near-term
mining plan. As the mid-term to long-term mining plan is developed,
further measured and indicated mineral resources are anticipated to
convert to mineral reserves.
2011 Exploration Program
During 2011, the Company undertook its largest ever
exploration program, which included drilling of approximately 350,000
metres in 925 holes. The Company had up to 14 drill rigs operating in
2011, with exploration activities focused on the San Antonio Mining
Unit, the Shoreline Basalt Unit, an intermediate volcanic rock unit
north of the Shoreline Basalt Unit, and the Normandy Creek Shear Zone,
in addition to other exploration activities.
The San Antonio Mining Unit (or the Historic Mining Unit) is a
gold bearing, moderately dipping, mafic sub-volcanic rock unit. Gold
mineralization in the San Antonio Mining Unit is associated with
gold-bearing quartz veins and stockwork related to shear zones and
tensional fractures near the hanging wall contact. The San Antonio
Mining Unit was originally discovered in 1911 and intermittent mining
operations since 1927 have produced more than 1.5 million ounces of
gold. Mineralization in the San Antonio Mining Unit has been traced to a
depth of 1,500 metres.
In 2011, exploration activities in the San Antonio Mining
Unit focused on underground exploration and definition drilling of the
ore envelope ahead of mining crews for near and mid-term production
planning purposes in proximity to the 26 and 28 levels. In 2011, the
Company drilled 59,523 metres in the San Antonio Mining Unit.
The Shoreline Basalt Unit is a steeply dipping, mafic
volcanic rock unit that is geologically similar to the San Antonio
Mining Unit. In late 2010, the Company determined that a system of
stacked lenses containing several significant, near-surface, high-grade
gold-bearing zones, including the Company's 007 and L10 deposits, was
associated with the Shoreline Basalt Unit. Gold mineralization is
typically associated with tabular quartz veining along, or in close
proximity to, the north hanging wall contact of the Shoreline Basalt
Unit, that strike east-west, and dip steeply to the north.
Drilling from both surface and underground locations over the
past two years has demonstrated that the Shoreline Basalt Unit has a
strike length of more than two kilometres, a plunge that has been traced
to more than 1,400 metres from surface, and that it remains open along
strike and to depth. Recent geophysical surveys and other geologic
evidence suggest that the Shoreline Basalt Unit may extend for at least
another three kilometres east of the 007 deposit towards the Company's
SG-1 mine near the Normandy Creek Shear Zone.
Exploration activities in 2011 along the Shoreline Basalt
Unit consisted of both surface exploration drilling and underground
definition and exploration drilling to locate the down-dip extensions of
the near-surface Shoreline Basalt Unit deposits and to determine the
degree of continuity between them. Drilling repeatedly intersected
high-grade gold mineralization over mineable widths along the Shoreline
Basalt Unit in close proximity to the L10 and 007 deposits. The Company
is very encouraged by the results of the Shoreline Basalt Unit drilling
program as it continues to demonstrate the potential for the expansion
of existing mineralized zones and the discovery of new zones along the
Shoreline Basalt Unit both east and west and at depth.
The Company expects to continue its aggressive drilling program along the Shoreline Basalt Unit for the next several years.
The Company's L13, Hinge and Cohiba deposits are
near-surface, epithermal gold deposits contained within an intermediate
volcanic rock unit located to the north of the Shoreline Basalt Unit.
To-date, the epithermal deposits delineated along this trend typically
occur as tabular quartz veining within a northeast striking shear zone
and have individual drill-indicated strike lengths between 100 and 150
metres, vary in width from one to 10 metres, and have been located at a
depth of up to 400 metres below surface.
During 2011, drilling activities within this intermediate
volcanic rock unit have focused primarily on underground definition
drilling of the L13 and Hinge deposits, and exploration drilling in
close proximity to the Hinge deposit.
Late in 2011, a new Hinge-like deposit (L8) was discovered
immediately to the northwest of the original Hinge deposit. It has been
traced vertically from 300 to 700 metres below surface and is in close
proximity to both the Hinge deposit and Rice Lake mine workings (at 16
Level).
The Company continues to be encouraged by exploration results
from within this intermediate volcanic rock unit and considers this
southwest - northeast corridor to be very prospective for the discovery
of new epithermal gold deposits.
The Normandy Creek Shear Zone is a long splay fault of the
Wanipigow Fault, a large east-west regional fault that forms the
northern border of the Rice Lake greenstone belt that is associated with
the Wanipigow Plutonic Complex to the east of the Rice Lake Project.
This zone of intense ductile deformation is in close proximity to the
northwestern edge of the Ross River Pluton. Gold mineralization along
the Normandy Creek Shear Zone is typically strata-bound and tabular.
The 100%-owned SG-1 mine is located approximately 4.5
kilometres northeast of the Rice Lake mill and has a dedicated decline.
Near surface production at the SG-1 mine commenced in 2006, however, the
mine was placed on care-and-maintenance in October 2008 when the
Company reallocated mining and exploration resources to develop the
higher grade and lower cost Hinge deposit. Historically, gold
mineralization in the SG-1 mine and the SG-2 and SG-3 deposits has been
interpreted to be associated with the Normandy Creek Shear Zone. The
drill-indicated mineralized envelope of the SG-1 mine extends from
surface to a depth of approximately 200 metres.
Recent drill results, combined with other geological evidence
and geophysical interpretation, suggest that the Company may have found
a new horizon for gold mineralization along the Normandy Creek Shear
Zone that may be associated with an eastern limb of the Shoreline Basalt
Unit.
Outlook
The Company continues its aggressive drill program at the
Rice Lake Project and remains on track to complete 250,000 metres of
surface and underground diamond drilling in 2012. A large portion of the
2012 program will be targeted toward converting mineral resources to
mineral reserves. The Company will also continue to extend its overall
mineral inventory. The Company remains extremely excited about the
potential of the currently known ore bodies as none have yet been tested
below 1,500 metres depth, which is approximately half the vertical
extent of similar known Archean greenstone deposits.
The Shoreline Basalt Unit remains a top exploration priority
as exploration drilling along the unit represents approximately half of
the Company's current drill program. The Company will also continue
testing prospective targets along the Normandy Creek Shear Zone and
examining the potential of the Company's recently acquired local
property package which is within an economic radius of the Company's
expanded processing facility.
For further information on the Company, please visit
www.sangold.ca.
Cautionary Note
This news release includes certain "forward-looking
statements". All statements, other than statements of historical fact
included in this release, including, without limitation, statements
regarding forecast gold production, gold grades, recoveries, cash
operating costs, potential mineralization, mineral resources, mineral
reserves, exploration results, and future plans and objectives of the
Company, are forward-looking statements that involve various risks and
uncertainties. These forward-looking statements include, but are not
limited to, statements with respect to mining and processing of mined
ore, achieving projected recovery rates, anticipated production rates
and mine life, operating efficiencies, costs and expenditures, changes
in mineral resources and conversion of mineral resources to proven and
probable mineral reserves, and other information that is based on
forecasts of future operational or financial results, estimates of
amounts not yet determinable and assumptions of management.
Any statements that express or involve discussions with
respect to predictions, expectations, beliefs, plans, projections,
objectives, assumptions or future events or performance (often, but not
always, using words or phrases such as "expects" or "does not expect",
"is expected", "anticipates" or "does not anticipate", "plans",
"estimates" or "intends", or stating that certain actions, events or
results "may", "could", "would", "might" or "will" be taken, occur or be
achieved) are not statements of historical fact and may be
"forward-looking statements." Forward-looking statements are subject to a
variety of risks and uncertainties that could cause actual events or
results to differ from those reflected in the forward-looking
statements.
There can be no assurance that forward-looking statements
will prove to be accurate and actual results and future events could
differ materially from those anticipated in such statements. Important
factors that could cause actual results to differ materially from the
Company's expectations include, among others, the actual results of
current exploration activities, conclusions of economic evaluations and
changes in project parameters as plans continue to be refined as well as
future prices of precious metals, as well as those factors discussed in
the section entitled "Other MD&A Requirements and Additional
Disclosure and Risk Factors" in the Company's most recent quarterly
Management's Analysis and Discussion ("MD&A"). Although the Company
has attempted to identify important factors that could cause actual
results to differ materially, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can be no
assurance that such statements will prove to be accurate as actual
results and future events could differ materially from those anticipated
in such statements. Accordingly, readers should not place undue
reliance on forward-looking statements.
Drill core obtained as part of the surface drill program
was split, with half sent to TSL Laboratories in Saskatoon, SK and fire
assayed followed by an Atomic Absorption and gravimetric finish. Whole
metallic assays were performed on samples containing visible gold.
Underground drill core samples were assayed on site in the Company's
assay laboratory using the fire assay method with an Atomic Absorption
and gravimetric finish. The Company's quality control and assurance
program includes the insertion of standards, the retention of pulps and
rejects, and spot checks utilizing independent laboratories including
TSL Laboratories in Saskatoon, SK and Accurassay Laboratories of Thunder
Bay, ON.
Exploration results that include geophysics, sampling,
and drill results on wide spacings may not be indicative of the
occurrence of a mineral deposit. Such results do not provide assurance
that further work will establish sufficient grade, continuity,
metallurgical characteristics, and economic potential to be classed as a
category of mineral resource. A mineral resource that is classified as
"inferred" or "indicated" has a great amount of uncertainty as to its
existence and economic and legal feasibility. It cannot be assumed that
any or part of an "indicated mineral resource" or "inferred mineral
resource" will ever be upgraded to a higher category of resource.
Investors are cautioned not to assume that all or any part of mineral
deposits in these categories will ever be converted into proven and
probable reserves.
No stock exchange, securities commission
or other regulatory authority has approved or disapproved the
information contained herein.
