Toronto, Ontario, June 20, 2017 − NewCastle Gold Ltd. (NCA:TSX) (“NewCastle Gold” or the “Company”) is pleased to report new assay results from the upper portions of the additional drilling in the JSLA open pit area at the Castle Mountain gold project (the “Project”) located in San Bernardino County, California. These results are for the holes that penetrated the backfill in the former JSLA pit, and form part of the Phase II definition drill program (the “Program”) in the JSLA pit area, that totaled 111 holes/39,700 metres of reverse circulation (“RC”) and diamond core drilling.
The JSLA pit, mined from 1991-1996, was subsequently backfilled with blasted Run-of-Mine (“ROM”) ‘waste’ and was below the historical cut-off grade of 0.5 grams per tonne gold (“g/t Au”) material from the later mined Jumbo and Oro Belle pits, located to the north. The Company will be required to remove part of this material in its initial pre-stripping activity and is currently assessing the viability of processing some, or all of it as described further below.
Assays results from RC Hole CMM-215, drilled within 100 metres of the approximate centre of the former mined pit returned an encouraging 0.46 g/t Au over 155.4 metres, including 1.94 g/t Au over 18.3 metres. This result suggests that pockets of higher grade material may be present within the backfill.
Gerald Panneton, President and CEO commented: “We are very pleased with the additional results obtained in the upper portions of the drilling through the JSLA backfill. With all 60 holes drilled through the backfill, we have been able to demonstrate the potential of a substantial volume of low-grade material, which would be part of the pre-stripping activities in a potential start-up. With the completion of these 60 holes, we are planning to include a ‘target potential’ resource for the backfill supported by metallurgical work that is scheduled for release at the same time as our mineral resource update in September of this year.”
Results from the remaining 22 RC and core drill holes of the 60 hole program reported today were drilled through, or near the JSLA backfilled pit. The Company targeted areas under the existing 2015 mineral resource, on approximately 100-200 foot centers. Assaying the upper part of these holes that penetrated the backfill material was also carried out and complements the 242 short 10m vertical rotary drill holes that were completed by the Company in January-February 2016 (see press release by the Company dated April 3, 2017).
Significant results from the upper portions of the 22 holes through the backfill material are highlighted in Table 1 below, and on the attached drill hole plan and cross-section maps.
Table 1 – Summary of Significant Assay Intercepts, JSLA Backfill Testing Program
All new RC and core holes were drilled at 290 degrees azimuth, with dips of -60 degrees and cored intervals of backfill material from 0 to 195 metres (640 feet). No true widths for the intercepted intervals have been calculated due to the lack of geological continuity within the unconsolidated backfill material.
Assessment of the JSLA backfill material and its viability for use in a potential ROM Program is ongoing. 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 potential overall gold recovery for the ROM heap leach. Given previous test work performed on ROM samples from various locations in the Project with different grade ranges, the Company anticipates the ROM heap leach gold recovery to be in the 50% to 65% range. In addition, four (4), 10 tonne samples of typical ROM material found in the JSLA backfill have been recently shipped to McClelland Labs in Sparks Nevada for large scale column testing.
Assays and Quality Assurance/Quality Control
Reverse circulation drill samples and half sawn core 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.
Manager, Investor Relations and Corporate Communications
Telephone: 437 993 4353
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.
Figure 1 – Castle Mountain Gold Project Plan Map
Figure 2 – Drill Hole Plan Map – JSLA Backfilled Pit
Figure 3 – Drill Hole Cross- Section 11800N- JSLA Backfilled Pit- Looking Northeast