Estrella Gold Updates Pampa Poroma IOCG Project, Southern Peru
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 09/11/12 -- Estrella Gold Corporation (TSX VENTURE: EST) ("Estrella" or the "Company") is pleased to announce the results from the recent drilling program and future plans for its Pampa Poroma project in the Department of Ica, southern Peru. Estrella recently completed 11 drill holes testing four new target areas. Results are favorable for this early stage, grassroots program and additional follow-up work is being planned, including ground geophysics and drilling. The Pampa Poroma property contains an iron oxide-copper-gold exploration target ("IOCG") located approximately 20 km northeast of the Marcona-Mina Justa Iron Oxide Copper Gold district which contains at least three major IOCG deposits. The Marcona and Mina Justa deposits each contain between 400 million to 1.4 billion tonnes of iron-oxide-copper-gold resources. Pampa Poroma is held in an Alliance Agreement with Cliffs Natural Resources Exploration Inc., a wholly owned subsidiary of Cliffs Natural Resources Inc. (NYSE: CLF)(Paris: CLF) ("Cliffs"). Estrella is the program operator and Cliffs provides all funding.
Estrella completed 11 wide spaced, reconnaissance exploration core holes (2,424.2 meters) in four target areas. Drill holes were inclined from -55 degrees to -80 degrees and were drilled to depths ranging from 125 - 277 meters. Each target area was defined based on geological interpretation of geophysical studies (magnetics and gravity), rock samples, and alteration mapping. The geology of the area contains highly altered Cretaceous andesitic volcanic rocks that form small outcrops within a magnetite-rich alluvium-filled valley. The best drill results were obtained from drill holes PPO-6 and 9 which are listed below:
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Drill Hole From - To (m) Interval Copper Gold
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PPO - 6 183.9 - 185.2 1.3 m 1.93 % 0.33 g/t
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PPO - 9 2.0 - 52.8 50.8 m 0.16 % 0.03 g/t
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174.0 - 190.0 16.0 m 0.24 % 0.02 g/t
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A total of seven of the eleven drill holes intersected elevated copper mineralization in the range of 0.05 - 0.35% copper in addition to the above intervals. Anomalous intervals ranged from 20 - 108 meters in width and copper mineralization is accompanied by variable but elevated concentrations of cobalt, gold, molybdenum, manganese, nickel, and arsenic. The large areas of low grade mineralization may be peripheral to areas containing higher grade, economic mineralization which will be the subject of further exploration.
EXPLORATION PLAN: The results of these initial, wide-spaced drill holes have identified a prospective target area for follow-up at the Compara Prospect. Estrella is now planning ground geophysical surveys to help identify follow-up drill targets. Geophysical surveys are planned for 4Q 2012. Results of this survey will be used to determine if additional drilling will be completed. Mr. Keith Laskowski, QP, President and CEO of Estrella commented, "Our initial exploration programs at Pampa Poroma represent a textbook example of prospect generation. With the solid support of Cliffs we have been able to complete systematic exploration programs resulting in identification of a potentially significant target. It is unrealistic to conduct grassroots exploration resulting in the discovery of a new deposit, with the first round of drilling. However we have obtained encouraging results that warrant the next step of exploration, and we are pleased that Cliffs will support the completion of additional geophysical surveys."
AGREEMENT: In accordance with the terms of the Alliance Agreement, all work on the Pampa Poroma property conducted by Estrella since entering into the Alliance Agreement has been funded by Cliffs. Under the terms of the Alliance Agreement, Cliffs can earn an initial 50 percent interest in the Pampa Poroma project by making exploration expenditures of US$2 million by August 31, 2013, including a minimum of US$750,000 by August 31, 2012 which has been met. Estrella will operate the Pampa Poroma project until such time as Cliffs elects to take over as operator. Cliffs must spend an additional US$4 million and complete 3,000 meters of drilling within 4 years of earning its 50 percent interest, to earn an additional 20 percent, for a total 70 percent interest. If Cliffs fails to earn a 70 percent interest, the property will revert back to Estrella (100%) subject to Estrella granting an NSR royalty to Cliffs, based on the amount of expenditures Cliffs has made on the property. If Cliffs has spent a minimum of US$1,000,000 but less than US$3,000,000 they will receive a 0.5 percent NSR royalty. If Cliffs has spent at least US$3,000,000 but less than US$4,000,000 they will receive a 1.0 percent NSR royalty. Cliffs can acquire an additional 10 percent interest for a total 80 percent interest in Pampa Poroma, by completing a NI 43-101 compliant Pre-Feasibility Study or by defining a NI 43-101 compliant Inferred Mineral Resource containing a minimum of 1,000,000, ounces of gold or gold equivalent, within four years of earning its 70 percent interest. If Cliffs elects not to earn an additional 10 percent interest, Cliffs will pay Estrella $2 million within 60 days and the parties will fund their proportional interest on a 70/30 basis, subject to conventional dilution. If either party's interest is reduced to 10 percent or less, that interest will be converted to a 2 percent NSR royalty.
QA/QC: Drill hole samples were collected in 1-2 meter intervals in accordance with accepted industry standards and procedures. The samples were submitted to the ALS Chemex Labs (ISO 9001:2000 accredited) in Lima, Peru for analysis. Gold was analyzed by fire assay with an AAS finish and multi-element analyses were determined with aqua regia digestion and ICP MS/AAS techniques. The Company conducts routine QA/QC analysis on all assay results, including the systematic utilization of certified reference materials, blanks and field duplicates.
About Estrella Gold Corporation (TSX VENTURE: EST)
The Company has 24.1 million shares issued and outstanding on the TSX Venture Exchange (TSX VENTURE: EST). Estrella is a "Prospect Generator" company focused on gold exploration and resource definition in Latin America. Estrella has 35 exploration properties in Peru, with thirty-two held in Venture Agreements. Estrella holds 29 properties within the exploration area that is subject to its Alliance Agreement with Cliffs. The Company has a NI 43-101 compliant inferred resource containing a minimum of 313,000 ounces of gold at its Colpayoc Project in Peru (from 19.3 Mt @ 0.5 g/t gold, NI 43-101 Inferred Resource, 2011 Global Geotechnologies Inc., News Release dated 12/21/2011), and two other properties that are available for Venture Agreements. Mr. Keith A. Laskowski, MSc., is a Qualified Person for the purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators, and has prepared, reviewed and verified the technical information contained in this news release. Further information is available at Estrella Gold's website: www.estrellagold.com.
STATEMENTS IN THIS NEWS RELEASE, OTHER THAN PURELY HISTORICAL INFORMATION, INCLUDING STATEMENTS RELATING TO THE COMPANY'S FUTURE PLANS AND OBJECTIVES OR EXPECTED RESULTS, MAY INCLUDE FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS AND ARE SUBJECT TO ALL OF THE RISKS AND UNCERTAINTIES INHERENT IN RESOURCE EXPLORATION AND DEVELOPMENT. AS A RESULT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE DESCRIBED IN THE FORWARD-LOOKING STATEMENTS.
Neither 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 release.
Contacts:
Estrella Gold Corporation
Keith Laskowski, MSc., QP
President
(720) 272-6224, (303) 235-8099 or (604) 687-3520
(604) 688-3392 (FAX)
klaskowski@estrellagold.com
www.estrellagold.com
