New Guinea says small-scale mining planned at Crater

2009-11-10 21:20 ET - News Release

Mr. Robert McNeil reports

CRATER MOUNTAIN UPDATE

New Guinea Gold Corp. (NGG) is providing the following update on the Crater Mt. project. NGG holds a 10-per-cent carried interest to bankable feasibility and is not required to provide further financing to the project until that milestone is reached.

NGG signed a joint venture agreement regarding Crater Mt. with TSX Venture Exchange-listed Celtic Minerals on Jan. 6, 2004. Subsequently, Celtic joint ventured the project to Triple Plate Junction (TPJ) (an Alternative Investment Market-listed company) and TPJ further concluded a joint venture agreement with Anomaly Resources Ltd. On Nov. 2, 2009, Anomaly Resources merged with Gold Aura Ltd. (listed on the Australian Securities Exchange) and formed a company called Gold Anomaly Ltd. (GOA). GOA has 676 million shares on issue, giving it a market capitalization of $24-million (Australian). Crater Mt. is the principle project of GOA.

Anomaly Resources, as part of the merger documentation, issued the following summary of the Crater Mt. project.

Crater Mt. is an advanced exploration project with potential to host a world-class gold deposit. The project comprises three contiguous exploration licences, EL1115, EL 1353 and EL 1384, which cover over 300 square kilometres of an eroded Pliocene-age volcano in the Papua New Guinea highlands approximately 50 kilometres southwest of Goroka. Crater Mt. is located in the New Guinea Orogen, a geological province which hosts a number of very large copper-gold deposits, including Grasburg/Ertsburg, OK Tedi, Porgera, Mt. Kare, Freida River, Nena, Yandera, Kainantu, Wafi Creek, Hidden Valley, Kerimenge, Hamata and the Morobe goldfields.

Anomaly entered into a joint venture with AIM-listed Triple Plate Junction to purchase an initial 25-per-cent equity and completing two phases of exploration. Anomaly has issued the scrip and completed the first-phase earning program, and currently holds 51-per-cent equity in the Crater Mt. project. A further expenditure of $900,000 (Australian) will increase its ownership to 70 per cent. This expenditure will commence in the second half of 2009, and is expected to be completed following the merger with Gold Aura.

Exploration by Anomaly commenced prior to listing in March, 2008, in accordance with the joint venture agreement for the Crater Mt. project, and has been continuous since that date. Four areas of gold mineralization and alteration have been outlined at Crater Mt., the most advanced of which is the Nevera prospect.

Nevera prospect

Work programs by previous explorers have all returned widespread gold in soils and rock chip sampling centred on the Nevera intrusive complex, a discrete dacitic volcanic diatreme intrusive complex outcropping over one square kilometre on the northern margin of the Crater Mt. andesitic volcanics. Sixteen wide-spaced holes have been drilled at Nevera to date and all have intersected gold mineralization. The average weighted grade for all drilling at Nevera (including internal waste zones) is 0.36 gram per tonne (g/t) gold, which demonstrates the large amount of gold potentially present in the intrusive-volcanic system.

Within the Nevera complex, a high-grade, near-surface gold zone was discovered by trench sampling, with results including 48 metres at 10.20 g/t gold, 26.5 metres at 6.27 g/t gold, 45 metres at 2.90 g/t gold, 35 metres at 3.10 g/t gold.

The mineralization is interpreted to be supergene, having been remobilized from a deeper source during weathering. This high-grade zone has been the site of artisanal mining operations since 2005, with annual production estimated by local gold buyers at 50 kilograms of gold (1,600 ounces).

The only two holes drilled in the artisanal mining area (NEV 04 and NEV 09) were both collared to the west of the zone and, although both intersected gold mineralization (as listed below), neither fully tested the zone not intersected the underlying mineralized diatreme-sediment contact zone discovered in other drill holes:

• NEV 04, 106 metres at 0.50 g/t gold, including two metres at 7.65 g/t gold;
• NEV 09, 17.8 metres at 1.94 g/t gold.

Significant widths of gold mineralization were intersected on the intrusive diatreme-sediment contact in five drill holes approximately 300 metres east of the artisanal mining zone. The contact is highly ruptured and brecciated, and hosts significant widths of gold mineralization in both the diatreme and adjacent sediment. Consultant geologist Terry Leach recognized two phases of mineralization in this zone and described it as typical carbonate-base-metal-type gold mineralization concentrated on a diatreme margin similar to that at Wafi Creek. The intersections in the five holes to date, which intersected the contact zone, are listed below:

• NEV 02, 121 metres at 1.77 g/t gold;
• NEV 05, 151 metres at 1.38 g/t gold, including 24 metres at 6.55 g/t gold;
• NEV 08, 178 metres at 1.30 g/t gold, including 32 metres at 2.76 g/t gold;
• NEV 10, 129 metres at 0.61 g/t gold, including 25 metres at 1.60 g/t gold;
• NEV 11, 205 metres at 0.86 g/t gold, including 25.5 metres at 2.36 g/t gold.

The Nevera diatreme is estimated to be one kilometre in diameter. Thus, there is an approximate three kilometres of prospective contact zone around the circumference of the diatreme. Mineralization on the contact zone intersected by drilling to date is up to 150 metres wide, and open along strike and at depth. Initial exploration will target a 700-metre section of the contact zone adjacent to and below the artisanal mining zone. It is thought that, likely, there is another mineralized structure below the artisanal mining zone. This will provide a second target which can be drill tested concurrently in this area.

Anomaly also plans to initiate a small- to medium-scale mining operation at the artisanal mining zone using a simple crushing and gravity circuit, while drilling the underlying target zones. Total operating costs for the small-scale mining are estimated to be approximately $200 (U.S.) per ounce.

The Nevera prospect contains outstanding drill targets with significant potential for the discovery of a multimillion-ounce, world-class orebody, as well as a high-grade gold zone at surface, which could be exploited in the short term. Three other advanced prospects with gold mineralization and similar geology to Nevera have been identified in the Crater Mt. tenements but have never been drill tested.

The information in this release was prepared under the direction of Robert D. McNeil, a fellow of the Australasian Institute of Mining and Metallurgy, and a qualified person as defined by National Instrument 43-101. Mr. McNeil has read and approves the information contained herein.