Toronto, Ontario, May 2, 2017 − NewCastle Gold Ltd. (NCA:TSX) (NewCastle Gold or the “Company”) is pleased to report new assay results from ongoing drilling on the JSLA backfilled pit at the Castle Mountain gold project (the “Project”) located in San Bernardino County, California. These results form part of the Phase II definition and exploration drill program (“the Program”) that ran from November 1, 2016 to March 31, 2017 and totaled 121 holes/44,500 metres of reverse circulation (“RC”) and diamond core drilling using seven drill rigs.
The JSLA open pit, mined between 1991 and 1996, was subsequently backfilled with blasted ROM ‘waste’ material from the Jumbo and Oro Belle open pits, located to the north. As the historical cut-off grade for mining was 0.50 g/t Au, the backfill in the JSLA pit contains waste material (sub 0.50 g/t Au) that the Company needs to remove in its initial pre-stripping activity when restarting the operation in 2018.
A total of 60 RC drill holes were completed, drilling through the JSLA backfilled pit, to target areas under the existing 2015 mineral resource on approximately 100-200 foot centers. Assaying of the upper portions of these RC holes that penetrated the JSLA pit backfill material was carried out and complements the 242 short vertical rotary drill holes that were completed by the Company in January-February 2016 (see press release by the Company dated April 3, 2017 and titled “Surface Drill Testing of the Backfill in JSLA Pit Indicates Great Potential for Quicker Restart of Operations Using Run of Mine”). Assessment of the JSLA backfill material and its viability for use in a potential Run-of-Mine program (“the ROM program”) is ongoing.
Results from the upper portions of 38 RC holes have been received, with significant assays from the backfill material highlighted below in Table 1, and on the attached drill hole plan map.
Gerald Panneton, President and CEO commented: “Today’s results further confirm our belief that the JSLA backfill represents a substantial volume of low-grade material that can be potentially processed in a ROM scenario as early as 2018. This current drilling outlines areas of better low-grade material shown in the highlights above, that suggest the presence of gold which may offset some of the costs associated with the required pre-stripping, as part of restarting the operation in the JSLA pit.”
The company is also performing five static gold recovery tests at the RDi test laboratory in Denver, Colorado on ROM samples taken from the JSLA backfill material to establish likely potential overall gold recovery in a ROM heap leach. Given previous test work performed on ROM samples from various locations in the Project and different at grade ranges, the Company expects the ROM heap leach gold recovery to be in the 50% to 65% range.
Table 1 – Summary of Significant Assay Intercepts, JSLA Backfill Testing Program
All new RC holes were drilled at 290 degrees azimuth, with dips of -60 degrees and cored intervals of backfill material from 0 to 236 metres (775 feet). No true widths for the intercepted intervals have been calculated due to the lack of geological continuity within the unconsolidated backfill material.
Assays and Quality Assurance/Quality Control
Reverse circulation drill samples were submitted to ALS Minerals in Reno, Nevada for crushing until 70% of the sample is finer than a nominal two millimeters in size. A 250 gram (“g”) sub-sample is taken from the crushed material and pulverized until 85% passes a 200 mesh (75 µm) screen (ALS Method PREP-31). A 30 g portion of pulverized material (pulp) is then sampled and subjected to fire assay (“FA”) with atomic absorption (“AA”) finish (ALS Method AuAA-23). Any gold assays greater than 10 g/t Au are re-analyzed where a 30 g portion is taken from the pulp and assayed by FA with a gravimetric finish (ALS Method Au 30 g FA – GRAV). All samples that yield greater than 0.2 ppm assay are also analyzed for gold cyanide solubility (ALS Method AuAA-13).
Reverse circulation drill samples drill samples were also submitted to Inspectorate America Corporation in Sparks, Nevada for crushing until 70% of the sample is finer than a nominal two millimeters in size. A 250 g sub-sample is taken from the crushed material and pulverized until 85% passes a 200 mesh (75 µm) screen (Method PRP70-250). A 30 g portion of pulverized material (pulp) is then sampled and subjected to fire assay (“FA”) with atomic absorption (“AAS”) finish (Method FA430). Any gold assays greater than 10 g/t Au are re-analyzed where a 30 g portion is taken from the pulp and assayed by FA with a gravimetric finish. All samples that yield greater than 0.2 ppm assay are also analyzed for gold cyanide solubility (Method CN403).
The Company employs an industry-standard QA/QC program consisting of standard pulps, coarse blanks and rig duplicates.
About NewCastle Gold
NewCastle Gold (an augustagroup company) has a 100% interest in the Castle Mountain property in San Bernardino County, California. The Castle Mountain heap leach gold mine produced over one million ounces of gold from 1992 to 2004. The Mine and Reclamation Plan, under which the mine operated, was authorized by the County of San Bernardino as the Lead Agency and remains in effect. Water for the drill programs was accessed from existing patented wells on the Project.
An updated NI 43-101 resource for the project was announced December 2, 2015 which includes Measured Mineral Resources of 17.4 million tonnes grading 0.86 g/t gold containing 0.48 million gold ounces, Indicated Mineral Resources of 202.5 million tonnes grading 0.57 g/t gold containing 3.71 million gold ounces along with Inferred Mineral Resources of 40.8 million tonnes grading 0.58 g/t gold and containing 0.76 million gold ounces. The Project hosts a disseminated low sulphidation epithermal system. Gold is primarily hosted by late-stage rhyolite volcanic units within zones of silicification and brecciation associated with northeast-southwest trending/southeast dipping fault structures which are interpreted to have developed within a collapsed caldera environment. Eleven gold domains are represented by both steep and shallow-dipping orientations.
Ian R. Cunningham-Dunlop, P. Eng., the Company’s Senior Vice President Technical Services, is the designated Qualified Person for this news release within the meaning of NI 43-101. He has reviewed and verified that the technical information contained in this release is accurate and has approved of the written disclosure of the same.
For further information, please contact:
NewCastle Gold Ltd.
Vice President, Investor Relations and Corporate Communications
Neither the TSX Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Exchange) accepts responsibility for the adequacy or accuracy of this news release.
This news release contains “forward-looking statements” and “forward-looking information” (collectively, “forward-looking information”) within the meaning of applicable Canadian securities legislation. Forward-looking information includes information that relates to, among other things, statements with respect to the completion of the proposed drill program at Castle Mountain, the mineral resource expansion at Castle Mountain and the identification of future expansion targets at Castle Mountain. Forward-looking information is not, and cannot be, a guarantee of future results or events.
Forward-looking information is based on, among other things, opinions, assumptions, estimates and analyses that, while considered reasonable by us at the date the forward-looking information is provided, inherently are subject to significant risks, uncertainties, contingencies and other factors that may cause actual results and events to be materially different from those expressed or implied by the forward-looking information. The material factors or assumptions that we identified and were applied by us in drawing conclusions or making forecasts or projections set out in the forward looking information include, but are not limited to that the Company is able to procure personnel, equipment and supplies required for its exploration and development activities in sufficient quantities and on a timely basis and that actual results will be consistent with management’s expectations.
The risks, uncertainties, contingencies and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information may include, but are not limited to, the risks discussed under the heading “Risks” in general to the business of NewCastle in documents filed (or to be filed) with Canadian regulatory authorities. Should one or more risk, uncertainty, contingency or other factor materialize or should any factor or assumption prove incorrect, actual results could vary materially from those expressed or implied in the forward-looking information. Accordingly, the reader should not place undue reliance on forward-looking information. NewCastle does not assume any obligation to update or revise any forward-looking information after the date of this news release or to explain any material difference between subsequent actual events and any forward-looking information, except as required by applicable law.
Map 1 – Castle Mountain Gold Project Plan Map
Map 2 – Drill Hole Plan Map – JSLA Backfilled Pit