El Gallo Drilling Intersects Impressive Silver Mineralization
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Oct 25, 2011 08:43AM
A high growth, low cost mid-tier silver and gold producer in the Americas
October 25, 2011 | |
US Gold Corporation: El Gallo Drilling Intersects Impressive Silver Mineralization
461.7 gpt Silver Over 11.3 Meters |
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TORONTO, ONTARIO--(Marketwire - Oct. 25, 2011) - US GOLD CORPORATION (NYSE:UXG)(TSX:UXG) is pleased to announce new drill results from the El Gallo Complex, in Sinaloa State, Mexico. Drill results contained in this news release were completed in order to increase the size of the silver and gold resources at El Gallo. Highlights include: 309.7 grams per tonne (gpt) silver over 10.3 meters (m), 727.7 gpt silver, 5.0 gpt gold over 2.7 m, 130.9 gpt silver over 19.0 m and 461.7 gpt silver over 11.3 m, with the last intersection occurring 20 m below the proposed pit bottom. "Since making the El Gallo discovery in 2009, we have completed an aggressive exploration program of 165,000 meters of core drilling and we still have not found the limits of the system. Impressive intersections of near surface silver mineralization continue to be encountered. In addition, I believe the proposed merger with Minera Andes will create an attractive, high growth, low cost mid-tier silver producer. The fundamentals look exceptionally bright for the company, despite the current share price decline," stated Rob McEwen, Chairman and CEO. Impressive Drill Intersections Drilling in order to expand the size of the resource focused on three areas: 1) east, 2) south and, 3) below the planned pit (Fig. 2). Each of the holes encountered impressive intersections of silver mineralization. Drilling to follow on these results is underway: 1) East of Proposed Pit: GAX-380 intersected two zones. The first zone returned 727.7 gpt silver, 5.0 gpt gold over 2.7 m, including 2,260 gpt silver, 16.2 gpt gold over 0.8 m. This intercept is the up-dip extension of the Main Zone. The result demonstrates that the mineralization continues to surface. The second intersection came from the Lower Zone, which continues to be defined and expanded, returning 309.7 gpt silver over 10.3 m, including 3,510 gpt silver over 0.7 m. Both intersections occur approximately 120 m east of the proposed pit design, released in February as part of the Preliminary Economic Assessment (PEA) (Fig. 2). 2) South of Proposed Pit: GAX-369 intersected 130.9 gpt silver over 19.0 m in an area that was believed to have limited expansion potential. This hole encountered a much wider zone of better than expected grade. The intersection occurs 125 m south of the PEA pit design (Fig. 2 & 3). 3) Below the Proposed Pit: GAX-374 successfully encountered 461.7 gpt silver over 11.3 m, including 1,945.6 gpt silver over 2.4 m, 20 m below the present PEA pit bottom. This hole was drilled with the belief that a high-grade cross-cutting structure is present through this portion of the Main Zone. This hole helps confirm US Gold's geological model, as well as providing down-dip continuity to several other high-grade intersections in the area (Fig. 2). PHASE 1 MINING SCHEDULED FOR Q2 2012 Phase 1 mining at the El Gallo Complex is expected to commence during the second quarter 2012. The El Gallo Complex includes the El Gallo and Palmarito silver deposits and the Magistral gold deposits, which are located within a 13 km (8 mile) radius. Phase 1 will focus on the permitted gold deposits and is expected to produce 30,000 ounces of gold per year after initial ramp up. Capital costs have been estimated at $15 million and the projected cash flow will help fund Phase 2, which is forecasted to produce an additional 5 million ounces of silver per year, beginning in 2014. Readers should note that mineral resources that are not mineral reserves do not have demonstrated economic viability. |