VG Gold drills 0.9 m of 1,390 g/t Au at Paymaster West

2009-10-19 04:12 PT - News Release

Mr. Tom Meredith reports

VG GOLD CORP.: IMPRESSIVE GOLD GRADES INTERSECTED AT PAYMASTER WEST IN TIMMINS, ONTARIO

VG Gold Corp.'s new core drilling from its Paymaster West project in Timmins, Ont., has successfully intersected high-grade, near-surface gold mineralization, including 1,390 grams of gold per tonne (g/t) over 0.9 metre, or 40.54 ounces of gold per ton, over three feet. VG Gold has the option to earn a 60-per-cent interest in Paymaster West project from Goldcorp. The project is situated next to Goldcorp's Dome mine, which has produced 17 million ounces of gold.

                           DRILL RESULT HIGHLIGHTS

Hole No.           Gold grade      Interval       Gold grade        Interval
                        (g/t)           (m)           (oz/t)            (ft)

VGP-09-20           1,390.00           0.9            40.54             3.0
VGP-09-19               11.6           2.0            0.338             6.6

These positive results followed the initial drill hole results released in Stockwatch on Sept. 8, 2009, which returned 41.67 g/t over 1.8 metres (1.22 ounces per ton over 5.9 feet). Drilling at Paymaster has confirmed the presence of near-surface, widespread gold mineralization hosted within altered quartz feldspar porphyry, which is a favourable geological environment for the large gold deposits in Timmins.

The six drill holes reported in this release, shown in the attached table, targeted gold mineralization between 150 metres and 300 metres (500 feet and 1,000 feet) below surface.

Gold mineralization at the Paymaster West project is hosted within strongly altered and well-mineralized quartz feldspar porphyry. Alteration consists of pervasive ankerite and sericite alteration with local tourmaline, both disseminated and in veins. Pyrite mineralization is disseminated throughout, with local concentrations to 20 per cent. Visible gold (VG) was noted in hole VGP-09-20.

Based on the successful drill results to date, VG Gold is planning to expand its current 6,000-metre (19,685-foot) drill program. Drilling will continue to target porphyry-hosted high-grade mineralization located between 150 metres and 300 metres (500 feet and 1,000 feet) below surface. Two core drill rigs are currently operating at Paymaster.

Paymaster project historical summary

The Paymaster West property is located in the centre of the historic Timmins mining camp (70 million ounces of gold produced). The property is adjacent to the Goldcorp-owned Dome mine, which has produced 17 million ounces of gold to date. The mines in the Timmims gold camp have produced gold to depths exceeding 2,000 metres (6,560 feet).

Production and exploration on the Paymaster West project occurred between 1910 and 1928 to an approximate depth of 245 metres (800 feet). During the 1940s and 1950s, a series of core holes successfully intersected high-grade gold mineralization over good widths at depth. This drilling occurred at depths at 460 metres (1,500 feet) and at 760 metres (2,500 feet) below surface and demonstrated the excellent exploration potential of the Paymaster West project.

Qualified person

All exploration work was conducted under Kenneth Guy, PGeo, designated qualified person for VG Gold, who has reviewed this press release. Gold analysis of samples collected by VG Gold was assayed by ALS Chemex. Analysis consisted of a fire assay of a 30-gram sample with an atomic absorption finish. Samples assaying over 10 grams per tonne Au are reassayed with gravimetric finish. Samples noted to contain visible gold are analyzed via total metallic assay method. A rigorous quality control and assurance program (QA/QC) is in place, using control samples such as blanks and duplicate checks. In addition, duplicate analyses of 10 per cent of the samples are corroborated by check assays performed at a third party laboratory.

Hole No.   East North Length   Length  Dip  Az.   From     To Width       Au
                        (ft)      (m)              (m)    (m)   (m)    (g/t)

VGP-09-16  6181  9144 1,355     413.0  -50  172  176.4  177.4   1.0     6.06
                                                 259.9  282.9  23.0     1.40
                                                 294.5  296.1   1.6     2.26
VGP-09-17  6181  9144 1,169.6   356.5  -68  174  107.5  109.3   1.8     2.37
VGP-09-18  5997  9091 1,000.7   305.0  -50  180   39.6   41.1   1.5     1.39
                                                 186.5  188.1   1.5     1.03
                                                 236.1  237.7   1.6     1.19
                                                 284.4  285.9   1.5     1.03
VGP-09-19  5997  9091 1,335.3   407.0  -69  180  114.6  116.6   2.0    11.60
                                                 208.5  210.0   1.5     3.07
                                                 383.4  385.4   2.0     3.56
VGP-09-20  5797  8848   675.9   206.0  -50  165   41.5   42.4   0.9 1,390.00
                                                 155.0  156.5   1.5     1.66
VGP-09-21  5797  8848   764.4   233.0  -70  165  158.5  162.3   3.8     1.20
                                                 177.9  181.7   3.9     1.66
Six holes                     1,920.5

Lengths reported are core intersection lengths and do not represent true
widths.
It is anticipated that true width estimates will be made possible after
additional drilling.