LOOOOKING GOOOOOD!!!
US Gold Corporation: El Gallo District Resource Estimate Update
Symbol Price Change
UXG 5.66 +0.23
Press Release Source: US Gold Corporation On Thursday November 18, 2010, 8:30 am EST
TORONTO, ONTARIO--(Marketwire - 11/18/10) - US GOLD CORPORATION (NYSE:UXG - News)(TSX:UXG - News) is pleased to announce details of an updated resource estimate for the El Gallo District (100% owned) in Sinaloa State, Mexico. The resource estimates were prepared by Pincock, Allen and Holt (PAH) of Denver, Colorado in accordance with Canadian National Instrument 43-101 standards (NI 43-101) and updates the previous estimates released on July 6, 2010.
RESOURCE ESTIMATE HIGHLIGHTS
-- El Gallo District (El Gallo, Palmarito and Magistral Projects) silver resources continues to show encouraging growth (See Table 1,2,3 for total ounces, tonnes and grade for each project):----------------------------------------------------------------------------Jul-2010 Resource Estimate Nov-2010 Resource Estimate % Change----------------------------------------------------------------------------Measured + Indicated Silver: Measured + Indicated Silver: 39.8 +18% 33.6 million oz million ozInferred Silver: 15.5 million Inferred Silver: 19.7 million oz +27% oz----------------------------------------------------------------------------Measured + Indicated Gold: Measured + Indicated Gold: +1% 540,115 oz 543,728 ozInferred Gold: 23,282 oz Inferred Gold: 23,764 oz +2%------------------------------------------------------------------------------ Mineralization at the El Gallo Project, where the majority of the silver resources are located, is close to surface with 93% of the Measured + Indicated and 91% of the Inferred resource located less than 325 feet (100 meters) below surface.-- Mineralization at El Gallo and Palmarito remains open for expansion in several directions. Seven drills are operating at the projects and throughout the district in order to expand current resources and identify new mineralized areas.
El Gallo Resource Estimate
The El Gallo resource estimate includes two cut-off grades since two process methods are being considered. A 40 gpt silver cut-off was used for the higher grade mineralization using a Mill recovery process (Table 1) and a 20 gpt silver cut-off was used for the lower grade mineralization using a Heap Leaching recovery process (Table 1). The cut-off grade for leachable silver mineralization was lowered from 25 gpt used in the previous estimate due to higher silver prices. El Gallo's updated estimate includes lower grade sulphide mineralization that was excluded from the initial estimate. This mineralization has been included in the updated resource estimate based on early column leach testing, which has returned positive silver recoveries and reagent consumption (Table 4). A total 70 core holes (38,700 feet or 11,795 meters) of new core drilling was used to update the El Gallo Project resource estimate.
1) Higher Grade Mill Mineralization (Table 1)
Measured and Indicated silver resources increased by 1,924,903 oz to 26,536,461 oz within 7,461,000 tonnes of material with an essentially unchanged grade of 110.6 gpt. Inferred resources decreased by 547,669 oz silver to 11,012,828 oz silver within 3,525,000 tonnes of material with an average grade of 97.2 gpt, which is 5% higher than the initial estimate. On-going drilling at El Gallo is currently focused on expanding the silver mineralization further to the East. A summary of the higher grade Mill mineralization is below:
----------------------------------------------------------------------------METRIC------ Tonnage Average Average ('000 Silver Silver Grade Gold Gold Grade tonnes) (oz) (g/tonne) (oz) (g/tonne)----------------------------------------------------------------------------Higher Grade Mill Mineralization-----------------Measured 4,437 17,194,342 120.5 13,275 0.09Indicated 3,024 9,342,119 96.1 7,195 0.07 ----- ---------- ----- ------ ----Measured + Indicated 7,461 26,536,461 110.6 20,470 0.09Inferred 3,525 11,012,828 97.2 7,326 0.06----------------------------------------------------------------------------
2) Lower Grade Heap Leach Mineralization (Table 1)
Measured and Indicated silver resources of this material increased by 4,217,865 oz to 4,706,783 oz within 5,136,000 tonnes of material. Average silver grade decreased by 9% to 28.5 gpt due to a lower cut-off grade. Inferred silver mineralization increased by 5,114,399 oz to 5,721,391 oz within 6,485,000 tonnes of material. Average silver grade decreased 14% to 27.4 gpt due to a lower cut-off grade. The increase in resources was due to the addition of sulphide mineralization that was excluded from the initial estimate, new drilling and a lower cut-off grade due to higher silver prices. A summary of the lower grade Heap Leach mineralization is below:
----------------------------------------------------------------------------METRIC------ Average Tonnage Silver Average ('000 Silver Grade Gold Gold Grade tonnes) (oz) (g/tonne) (oz) (g/tonne)----------------------------------------------------------------------------Lower Grade Leach Mineralization-----------------Measured 2,519 2,321,320 28.7 2,537 0.03Indicated 2,618 2,385,463 28.3 1,874 0.02 ----- --------- ---- ----- ----Measured + Indicated 5,136 4,706,783 28.5 4,411 0.03Inferred 6,485 5,721,391 27.4 2,972 0.01----------------------------------------------------------------------------
A conceptual open pit mining method was used for the purpose of delineating the mineralization with a reasonable prospect of economic extraction. Tonnage estimates were based on a 2.5 grams/cubic centimeter density factor. Ordinary kriging was used to interpolate silver grade and inverse distance was used to interpolate gold grade in the resource model (geostatistical methods of calculating resources). The El Gallo Project resource estimate was generated from sample data up to September 2010 and contained within a total of 250 core holes (135,810 feet or 41,395 meters) completed during US Gold's ongoing drilling program.
Palmarito Resource Estimate
The Palmarito resource estimate includes silver and gold mineralization from three sources: 1) in-situ mineralization (material that has not been previously mined), 2) stockpiled mineralization (material that was previously mined, but not processed by the historic mill), 3) tailings mineralization (material that the historic mill processed, but was unable to recover). Cut-off grade remains unchanged from the previous resource estimate.
1) In-situ Mineralization (Table 3)
Measured and Indicated resources increased by 402,839 oz silver to 7,097,196 oz silver within 3,447,000 tonnes of material with an unchanged average grade of 64 gpt. Inferred resources increased by 259,697 oz silver to 2,982,561 oz silver within 1,604,000 tonnes of material with slightly lower average grade of 58 gpt. A total of 14 new core holes (11,825 feet or 3,600 meters) were used to update the in-situ resource. The new drilling expanded the vertical extent of the previous resource and also included mineralization from the recently discovered Southwest Zone. A summary of the ln-Situ Mineralization is below:
----------------------------------------------------------------------------METRIC Average------ Tonnage Silver Average ('000 Silver Grade Gold Gold Grade tonnes) (oz) (g/tonne) (oz) (g/tonne)----------------------------------------------------------------------------In-Situ Mineralization----------------------Measured 2,424 5,071,055 65 10,863 0.14Indicated 1,023 2,026,141 62 4,013 0.12 ----- --------- -- ------ ----Measured + Indicated 3,447 7,097,196 64 14,875 0.13Inferred 1,604 2,982,561 58 5,299 0.10----------------------------------------------------------------------------
2) Stockpiled Mineralization (Table 3)
Measured and Indicated resources for the Stockpiled material increased by 87,555 oz silver to 670,734 oz silver within 119,000 tonnes of material with an average grade of 175 gpt, which is 2% less than the previous estimate. The increase in total resources was the result of additional sampling.
----------------------------------------------------------------------------METRIC Average------ Tonnage Silver Average ('000 Silver Grade Gold Gold Grade tonnes) (oz) (g/tonne) (oz) (g/tonne)----------------------------------------------------------------------------Stockpiled Mineralization-------------------------Measured 47.5 298,485 195 430 0.28Indicated 71.5 372,249 162 480 0.21 ----- ------- --- --- ----Measured + Indicated 119.0 670,734 175 910 0.24----------------------------------------------------------------------------
3) Tailings Mineralization (Table 3)
Measured and Indicated resources for the Tailings material decreased by 442,094 oz silver to 752,417 oz silver within 148,000 tonnes of material with an 74% higher average grade of 158 gpt. All previous Inferred mineralization was either upgraded to Measured or removed from the resource. The decrease in ounces and increase in grade was due to a new sampling method that is believed to be a more representative. Although the total ounces decreased, US Gold believes the net impact is positive due to the increased grade, which should make the tailings mineralization more economic to ship and process at El Gallo.
----------------------------------------------------------------------------METRIC Average------ Tonnage Silver Average ('000 Silver Grade Gold Gold Grade tonnes) (oz) (g/tonne) (oz) (g/tonne)----------------------------------------------------------------------------Tailings Mineralization---------------Measured 148 752,417 158 596 0.12----------------------------------------------------------------------------
A conceptual open pit mining method was used for the purpose of delineating the mineralization with a reasonable prospect of economic extraction. Tonnage estimates were based on a 2.65, 1.2 and 1.51 grams/cubic centimeter density factor for the In-situ, Stockpiled and Tailings mineralization, respectively. Kriging was used to interpolate silver grade for the In-situ mineralization and inverse distance was used to interpolate silver grade for the Stockpile and Tailings as well as gold grades for all models. The database used to establish Palmarito's resource is based on 57,620 feet (17,560 meters) of core and reverse circulation drilling, in addition to trench sampling (Stockpiled and Tailings material).
Magistral Resource Estimate
The resource calculation for Magistral remains unchanged from the previous estimate. Management believed there was insufficient data to materially change the total ounces of gold.
Mr. Aaron McMahon, P.G., of PAH will be the author of a NI 43-101 compliant Technical Report on the Mineral Resource Estimate for the El Gallo District, to be filed within 45 days of this news release. Mr. McMahon is independent of US Gold as defined by NI 43-101.
ABOUT US GOLD (www.usgold.com)
US Gold's goal is to qualify for inclusion in the S&P 500 within the next 5 years. US Gold explores for gold and silver in the Americas, has an exciting silver discovery called El Gallo in Mexico, and is advancing its Gold Bar Project in Nevada towards production. US Gold has a strong treasury and is debt free. The company's shares are listed on the NYSE and the Toronto Stock Exchange under the symbol UXG, trading 1.2 million shares daily. US Gold's shares are also included in S&P/TSX and Russell indices.
finance.yahoo.com |
