Gold Canyon Announces Updated Resource Estimate for Springpole Gold Project
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 02/27/12 -- Gold Canyon Resources Inc. (TSX VENTURE: GCU)(PINKSHEETS: GDCRF) ('Gold Canyon' or 'the Company') is pleased to announce an updated National Instrument 43-101 compliant resource estimate, effective February 27, 2012, for its 100% controlled Springpole Gold Project, located 110 kilometers northeast of the Red Lake, Ontario, Canada. This resource estimate is the first since the Company's original estimate prepared by P & E Mining Consultants Inc. on November 20, 2006 and includes approximately 39,000 metres of drilling completed in 2010-11.
Highlights:
-- Indicated mineral resource of 1.22 million ounces of gold and 4.82
million ounces of silver.
-- Inferred mineral resource of 2.45 million ounces of gold and 11.58
million ounces of silver.
-- Drilling continues at Springpole where Gold Canyon plans an additional
50,000 meters of drilling in 2012.
The updated estimate is summarized below:
----------------------------------------------------------------------------
Gold Silver Gold Silver
Tonnage Grade Grade Contained Contained
(million (grams (grams (million (million
metric per per troy troy
Classification tonnes) tonne) tonne) ounces) ounces)
----------------------------------------------------------------------------
Indicated 30.0 1.26 5.0 1.22 4.82
----------------------------------------------------------------------------
Inferred 60.0 1.27 6.0 2.45 11.58
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Notes:
(1) 1 troy ounce = 31.103 grams.
(2) Cut-off grade of 0.4 grams per tonne gold.
'The very positive news announced today is a testament to careful geological modelling, the hard work of project management and staff, and to the tenacity of Gold Canyon's management,' states Dr. Quinton Hennigh, technical advisor to, and Director of, Gold Canyon. 'Although the large size of this resource is impressive, we feel that the gold and silver grades are an equally important reflection of the high quality of the Springpole Project. This resource gives us a solid foundation upon which we believe we can quickly build significant upside through ongoing drilling in near-surface areas proximal to this resource, along the strike of the Portage Zone to the southeast, and at depth where drilling has recently encountered higher grade mineralization.'
Resource Modelling
Mineral resources were estimated on the basis of a gold price of US$1,300/oz and US$15/oz for silver, both considered reasonable economic assumptions by the modeller. In order to establish a reasonable prospect of economic extraction in an open pit context, the resources above were defined within an optimized pit shell with pit walls set at 45 degrees; and estimated recovery of 80% for gold and 60% for silver; and mining costs estimated at US$2.00/tonne, processing costs estimated at US$12.00/tonne and general and administrative costs estimated at US$2.00/tonne. The cut-off grade used of 0.4 grams gold per tonne is considered to be an economically reasonable estimate of breakeven mining costs.
Mineral resources were estimated by ordinary kriging using 3-D Gemcom block modelling software in 10 by 10 by 6 meter blocks. Grade estimates were based on capped, 3 meter composited assay data. Gold capping levels were set at 20 grams per tonne gold for the Portage Zone, 31 grams per tonne gold for the East Extension Zone and 12 grams per tonne gold for the Main Zone. Blocks were classified as indicated mineral resources if at least two drill holes and six composites were found within a 72 by 72 meter search ellipse. All other interpolated blocks were classified as inferred mineral resource.
This resource model includes mineralized material in the Main, East Extension and Portage zones spanning from geologic sections 0+1,150 m in the northwest to 0-150 m in the southeast. Along the axis of the Portage Zone, resource modelling includes mineralized material generally ranging from 240-360 meters below surface.
Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues. The quantity and grade of reported inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category. The mineral resources in this news release were estimated using current Canadian Institute of Mining, Metallurgy and Petroleum (CIM) standards, definitions and guidelines.
The Company is preparing a NI 43-101 compliant technical report in respect of the updated resource estimate discussed in this news release and will file the technical report on SEDAR within 45 days of the date this news release was disseminated.
Dr. Gilles Arseneau ('Arseneau') has prepared the Mineral Resource Estimate for the Springpole Gold Project, and is independent of Gold Canyon for purposes of National Instrument 43-101 - Standards of Disclosure for Mineral Projects ('NI 43-101'). Gilles Arseneau (P.Geo.) is a Qualified Person as defined by NI 43-101.
Future Plans
Drilling continues at Springpole where Gold Canyon plans 50,000 meters in 2012. A winter drill program is presently underway with approximately 4,000 meters of diamond core drilling having been completed since January 20, 2012. Two additional drill barges have been delivered across the winter road to the Springpole site bringing the total number of barges to four. Barge drilling is expected to commence following breakup, which is estimated to be sometime in May.
Gold Canyon plans to focus approximately 80% of 2012's planned drilling at increasing the resource along the Portage Zone, including testing near-surface areas that currently have a low density of drilling, deeper areas where higher grade mineralization has been recently discovered (127.5 meters at 3.51 grams per tonne gold in diamond drill hole SP11-106 announced in a news release dated January 26, 2012) and along the southeast corridor where the deposit remains open for expansion. The remaining 20% of drilling will be directed at exploration elsewhere on the property.
Gold Canyon and SRK Consulting (Canada) Inc. have recently initiated work on a preliminary economic assessment (PEA). Completion of this PEA is expected by early quarter four, 2012, and it will be accompanied by an updated NI 43-101 compliant resource estimate that includes some of the aforementioned 2012 drilling.
Quinton Hennigh (Ph.D., P.Geo.) and Gilles Arseneau (Ph.D., P.Geo) are the Qualified Persons pursuant to National Instrument 43-101 responsible for, and have reviewed and approved, the technical information contained in this news release. Dr. Hennigh is a technical adviser to, and Director of, Gold Canyon and Dr. Arseneau is independent of Gold Canyon for purposes of NI 43-101.
About Springpole
Springpole is an alkaline intrusion hosting a gold system that represents a potentially new style of Canadian Archean Shield gold deposit. The Portage Zone is hosted by a trachytic porphyry intrusion displaying polyphase autolithic breccias that host gold mineralization. Other zones, including the East Extension and Main, consist of high-grade veins and pods hosted in diatreme breccias composed of intrusive and country rock fragments. These breccias surround the northwest and northern margins of the Portage Zone. The known mineralized zones underlie a total known area of about 4 square kilometers representing only about 15 percent of the greater alkaline intrusive complex which remains yet to be explored.
Conference Call
A conference call to discuss Gold Canyon and the resource estimate will be held at 9:00 A.M. (EST) on February 28, 2012. Investors are invited to participate by connecting to the call using one of the following dial-in numbers:
Date: February 28, 2012
Time: 9:00 A.M. Eastern Standard Time
Dial in Number: Local / International: 647-426-1845 or
North American Toll- Free: 1-866-782-8903
About Gold Canyon Resources Inc.:
Gold Canyon is engaged in the acquisition and exploration of mineral and precious metals properties. The Company controls a 100% interest in the Springpole Gold - Horseshoe Island Gold, Platinum, Palladium Project and Favourable Lake Poly-metallic property currently under option to Guyana Frontier Mining Corp. pursuant to an option and joint venture agreement entered into in December 2005 - all in the Red Lake Mining District of Ontario, Canada.
Through its wholly owned U.S. subsidiary, Gold Canyon Resources USA Inc., the Company controls a 100% interest in the Cordero Gallium Project situated in Humboldt County, Nevada, U.S.A.
Gold Canyon entered into a REE Joint Exploration Agreement with the Japan Oil, Gas and Metals National Corporation (JOGMEC) in January 2009.
Additional information can be found on the Company's website: www.goldcanyon.ca
Cautionary Note to U.S. Readers Regarding Estimates of Measured, Indicated and Inferred Resources
This news release uses the term 'inferred resources.' We advise U.S. investors that while this term is recognized and required by Canadian regulations, it is not recognized by the SEC. 'Inferred resources' have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an 'inferred mineral resource' will ever be upgraded to a higher category. Under Canadian rules, estimates of 'inferred mineral resources' may not form the basis of a feasibility study or prefeasibility studies, except in rare cases. The SEC normally only permits issuers to report mineralization that does not constitute 'reserves' as in-place tonnage and grade without reference to unit measures. The term 'contained gold ounces' used in this news release is not permitted under the rules of the SEC. U.S. investors are cautioned not to assume that any part or all of a measured, indicated or inferred resource exists or is economically or legally mineable.
Cautionary Note Regarding Forward Looking Statements
This news release contains statements that constitute 'forward looking statements' within the meaning of the United States Private Securities Litigation Reform Act of 1995 or 'forward looking information' within the meaning of applicable Canadian provincial securities legislation (collectively, 'forward-looking statements'). Forward-looking statements often, but not always, are identified by the use of words such as 'seek', 'anticipate', 'believe', 'plan', 'estimate', 'expect', 'targeting' and 'intend' and statements that an event or result 'may', 'will', 'would', 'should', 'could', or 'might' occur or be achieved and other similar expressions. Forward-looking statements in this news release include statements regarding the timing and nature of permitting studies, the timing and nature of infrastructure developments and construction, projections of future optimization, production timeline targets, the timing of negotiations with third parties, and the timing and nature of future exploration programs which are dependent on projections which may change as drilling continues, or if unexpected ground conditions are encountered. In addition, areas of exploration potential are identified which will require substantial drilling to determine whether or not they contain similar mineralization to areas which have been explored in more detail. The description of the extent of mineralized zones is not intended to imply that any economically mineable estimate of reserves or resources exists on any of Gold Canyon's projects.
The forward-looking statements that are contained in this news release are based on various assumptions and estimates by Gold Canyon and involve a number of risks and uncertainties. As a consequence, actual results might differ materially from results forecast or suggested in these forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of Gold Canyon to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause the actual results to differ include; risks relating to fluctuations in the price of gold; the inherently hazardous nature of mining-related activities; uncertainties concerning resource estimates; results of exploration, availability of capital and financing on acceptable terms, inability to obtain required regulatory approvals, unanticipated difficulties or costs in any rehabilitation which may be necessary, market conditions and general business, economic, competitive, political and social conditions. These statements are based on a number of assumptions, including assumptions regarding general market conditions, timing and receipt of regulatory approvals, the ability of Gold Canyon and other relevant parties to satisfy regulatory requirements, the availability of financing for proposed transactions and programs on reasonable terms and the ability of third-party service providers to deliver services in a timely manner. Although Gold Canyon has attempted to identify important factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements, there may be other factors which cause actual results to differ. Forward-looking statements contained herein are made as of the date of this news release and Gold Canyon disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws. There can be no assurance that forward-looking 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.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Contacts:
Gold Canyon Resources Inc.
Akiko Levinson
President & Director
(604) 682-3234 or Toll free: 1 (888) 242-3234
(604) 682-0537 (FAX)
info@goldcanyon.ca
www.goldcanyon.ca
Investor Relations:
Leo Karabelas
(416) 543-3120
leo@frontlineir.com
