New Veins Discovered North of El Gallo & Successful Expansion of Several Known Zones Throughout District
TORONTO, ONTARIO -- (Marketwire) -- 01/13/11 -- US GOLD CORPORATION (NYSE: UXG)(TSX: UXG) is pleased to announce very encouraging drill results from several different areas at and surrounding the company's El Gallo project in Sinaloa state, Mexico (Fig. 1). Drilling has discovered a series of new veins 6 miles (10 km) north of the main resource and has also extended many of the known zones throughout the district.
These results will not be included in the El Gallo Preliminary Economic Assessment due to be released in early February.
EXPLORATION HIGHLIGHTS
(See Fig. 1 for Drilling Locations)
1. Several new silver-gold veins, located 6 miles (10 km) north of the El
Gallo resource, have been discovered with intersections of 1,325.1 grams
per tonne (gpt) silver and 2.1 gpt gold over 1.2 meters, 235.0 gpt
silver and 18.3 gpt gold over 0.7 meters and 273.6 gpt silver and 0.7
gpt gold over 10.5 meters.
2. Near surface expansion and delineation drilling at Palmarito intersects
135.1 gpt silver and 0.3 gpt gold over 21.1 meters, 121.4 gpt silver and
0.6 gpt gold over 12.2 meters and 70.6 gpt silver, 0.6 gpt gold over
26.4 meters all starting from surface.
3. First follow-up holes at the El Gallo Gold Zone return more high-grade
16.9 gpt gold over 2.0 meters, 7.0 gpt gold over 1.1 meters, and 5.2 gpt
gold over 2.0 meters.
4. Near surface mineralization at Chapotillo extended to the southeast,
returning 218.3 gpt silver, 1.6 gpt gold over 4.6 meters, and 110.0 gpt
silver, 16.2 gpt gold over 0.5 meters.
5. Drilling at El Gallo, designed to increase the size of the resource
encounters more encouraging results 75.3 gpt silver over 22.2 meters.
6. Preliminary Economic Assessment for El Gallo due to be released in early
February
EL GALLO AND DISTRICT EXPLORATION
US Gold controls over 500,000 acres of land around El Gallo, with many areas having been mined historically on a small scale. Since many of these areas have not been subject to modern exploration, US Gold's management feels the district holds a lot of growth potential. Continued drilling at El Gallo will focus on expanding the total size of the resource and upgrading the inferred resource to the measured and indicated categories. Drilling on the new veins will focus on delineating the mineralization in order for them to be incorporated in an updated resource estimate. US Gold anticipates spending $15 million on exploration in Mexico during 2011, in addition to moving the project through to feasibility.
1) New Veins Discovered North of El Gallo Resource (Fig. 1 and 2)
A new series of veins have been discovered 6 miles (10 km) north of the El Gallo resource. A total of 14 core holes were completed on two of the veins known as Mina Grande and Los Mautos, which are separated by 1,300 meters. Drilling at Mina Grande occurred over a strike length of 550 meters. The best results were intersected along the northwest section of the vein where there is good potential to expand the mineralization laterally and at depth. Drilling on the Los Mautos vein occurred over a strike length of 120 meters. The mineralization at Los Mautos' is hosted in siliceous breccia bodies that outcrop at surface. This is important because this is the same type of occurrence that hosts silver mineralization at El Gallo. Highlights are shown below:
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Hole # Silver Gold Length From Silver Gold Length From
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(gpt) (gpt) (meters) (meters) (opt) (opt) (feet) (feet)
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MGX-001 209.6 1.7 2.0 50.0 6.1 0.05 6.6 164.0
And 1,325.1 2.1 1.2 58.3 38.6 0.06 3.9 191.3
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MGX-004 273.0 0.8 0.4 34.6 8.0 0.02 1.3 113.5
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MGX-006 236.0 2.5 0.6 20.0 6.9 0.07 2.0 65.6
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MGX-007 235.0 18.3 0.7 63.8 6.9 0.53 2.3 209.3
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LMX-004 273.6 0.7 10.5 32.2 8.0 0.02 34.4 105.6
Including 847.2 2.0 1.0 34.7 24.7 0.06 3.3 113.8
Including 562.8 1.4 2.1 39.7 16.4 0.04 6.9 130.2
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2) Palmarito - Good Grades & Thickness Discovered at Surface (Fig. 1 and 3)
The discovery of the Southwest Zone, announced in 2010, has opened up multiple areas for expansion at Palmarito. Since the discovery was announced, six additional core holes have been completed. The objective of these holes was to begin connecting the Southwest Zone to the main Palmarito resource located 250 meters to the north. Five of the six holes encountered encouraging grades and thicknesses starting at or near surface.
The results from these holes are important because: 1) the silver grades encountered are approximately 75% higher than the current in-situ resource at Palmarito, 2) the mineralization in each of the holes starts at or near surface, 3) the holes fill in the large gap that previously existed between the two zones and, 4) there appears to be multiple areas where the mineralization can be further expanded. Based on these results, a larger drill program is being designed for Palmarito and will commence in the coming weeks. Highlights are shown below:
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Hole # Silver Gold Length From Silver Gold Length From
------ ------ ---- ------- ------- ------ ---- ------ -----
(gpt) (gpt) (meters) (meters) (opt) (opt) (feet) (feet)
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PMX-054 121.4 0.6 12.2 0.0 3.5 0.02 40.0 0.0
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PMX-055 70.6 0.6 26.4 0.0 2.1 0.02 86.6 0.0
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PMX-056 135.1 0.3 21.1 0.0 3.9 0.01 69.2 0.0
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PMX-057 78.4 0.5 3.0 5.5 2.3 0.01 9.8 18.0
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PMX-059 167.9 0.5 6.2 1.2 4.9 0.01 20.3 3.9
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3) El Gallo Gold Zone - Early Success Continues (Fig. 1 and 4)
US Gold first announced the discovery of the Gold Zone on December 8, 2010 with the first two core holes returning 7.7 gpt gold over 4.8 meters and 6.4 gpt gold over 3.1 meters. The vein is located 300 meters southeast of the El Gallo silver resource. However, unlike El Gallo this new zone is predominately gold. Results from the first two follow-up holes have been received. The holes were drilled in order to test the down-dip potential and to establish the orientation of the vein, which appears to be trending east-west. Grades continue to be encouraging. It is also important to note that the 'basement rock', which underlies the El Gallo silver resource and acts as a floor to the mineralization, occurs much deeper at the Gold Zone. This is an encouraging development because it indicates potential for mineralization at increasing depths.
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Hole # Gold Length From Gold Length From
------ ----- ------- ------- ---- ------ -----
(gpt) (meters) (meters) (opt) (feet) (feet)
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GZX-003 16.9 2.0 10.0 0.49 6.6 32.8
Including 29.3 1.0 10.0 0.85 3.3 32.8
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GZX-004 4.2 4.9 132.2 0.12 16.1 433.7
Including 7.0 1.1 132.2 0.20 3.6 433.7
And 5.2 2.0 173.9 0.15 6.6 570.5
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4) Chapotillo - Near Surface Mineralization Expanded (Fig. 1)
The primary focus of US Gold's drilling at Chapotillo is to define the areas near surface potential. Since the discovery hole was announced on October 27, 2010, which returned 236.2 gpt silver and 1.6 gpt gold over 18.6 meters, results have been received for three additional holes. Each of the holes successfully intersected the zone at or near surface, expanding the mineralization by approximately 60 meters to the southeast. Drilling at Chapotillo is ongoing.
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Hole # Silver Gold Length From Silver Gold Length From
------ ------ ---- ------- ------- ------ ---- ------ -----
(gpt) (gpt) (meters) (meters) (opt) (opt) (feet) (feet)
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CHX-010 308.0 4.2 0.5 6.5 9.0 0.12 1.6 21.3
And 110.0 16.2 0.5 17.3 3.2 0.47 1.6 56.8
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CHX-012 78.0 1.0 4.4 26.2 2.3 0.03 14.4 86.0
Including 198.0 2.8 0.7 29.9 5.8 0.08 2.3 98.1
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CHX-013 218.3 1.6 4.6 0.0 6.4 0.05 15.1 0.0
And 71.9 0.6 4.2 19.5 2.1 0.02 13.8 64.0
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5) El Gallo - Expansion and Infill Drilling Continues to Encounter Success (Fig. 1 and 4)
Recent exploration at El Gallo has been focused on two goals: 1) Exploring for extensions of known zones in order to increase the size of the resource and, 2) Upgrading inferred resources to the measured and indicated categories.
Drilling to expand the mineralization focused on the southern extension of Main Zone. A total of seven holes intersected the zone, expanding the mineralization by 150 meters. The primary objective of US Gold's drilling at El Gallo is to expand the mineralization to the south and the east.
Highlights from the holes are shown below.
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Hole # Silver Length From Silver Length From
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(gpt) (meters) (meters) (opt) (feet) (feet)
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GAX-247 75.3 22.2 69.0 2.2 72.8 226.4
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GAX-250 61.8 9.8 122.6 1.8 32.2 402.2
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GAX-255 58.7 7.2 77.6 1.7 23.6 254.6
Including 196.0 1.4 83.5 5.7 4.6 274.0
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GAX-260 75.9 4.5 152.3 2.2 14.8 499.7
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GAX-264 150.0 4.6 0.0 4.4 15.1 0.0
Including 410.0 1.6 3.1 12.0 5.2 10.2
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GAX-266 76.0 7.5 100.4 2.2 24.6 329.4
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Drilling to upgrade mineralization into the measured and indicated categories focused on the area between the Main and North Zones. The results from these holes successfully met expectations. Ongoing in-fill drilling will occur throughout 2011 as US Gold moves towards the feasibility stage. Highlights from the recent in-fill holes are shown below.
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Hole # Silver Length From Silver Length From
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(gpt) (meters) (meters) (opt) (feet) (feet)
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GAX-248 91.3 1.0 47.0 2.7 3.3 154.2
And 358.0 0.9 68.5 10.4 3.0 224.7
And 76.2 1.1 89.0 2.2 3.6 292.0
And 98.0 2.0 110.8 2.9 6.6 363.5
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GAX-252 70.7 4.6 0.0 2.1 15.1 0.0
including 121.0 2.3 0.0 3.5 7.5 0.0
And 109.0 1.2 21.4 3.2 3.9 70.2
And 159.0 1.1 35.5 4.6 3.6 116.5
And 188.1 1.0 48.1 5.5 3.3 157.8
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6) Preliminary Economic Assessment Update
The Preliminary Economic Assessment for El Gallo is scheduled to be released in early February. This study will analyze potential production rates, capital expenditures and rates of return for the project and is expected to become the foundation for the El Gallo Feasibility Study.
ABOUT US GOLD (www.usgold.com)
US Gold's goal is to qualify for inclusion in the S&P 500 within the next 4 years. US Gold explores for gold and silver in the Americas, has an exciting silver discovery called El Gallo in Mexico, and is advancing its Gold Bar project in Nevada towards production. The Company's shares are listed on the NYSE and the Toronto Stock Exchange under the symbol UXG, trading 1.3 million shares daily during the past twelve months. US Gold's shares are included in S&P/TSX and Russell indices.
This news release has been viewed and approved by John Read, CPG, US Gold's consulting geologist, who is a Qualified Person as defined by National Instrument 43-101 and is responsible for program design and quality control of exploration undertaken by the Company at its Mexican exploration properties.
Samples from the core drilling were split on-site at the Company's Magistral Mine property. One quarter of the split drill core was shipped to ALS Chemex for sample preparation and analysis by 4-acid digestion with ICP determination for silver and fire assay for gold. Samples returning greater than 10 ppm gold were re-analyzed using gravimetric fire assay. Standards and blanks were inserted every 20 samples.
All holes were drilled with HQ bits and reduced to NTW where required. Samples were taken based on lithologic and/or mineralized intervals and vary in length. The true width of the mineral zone has not yet been determined.
Certain statements contained herein and subsequent oral statements made by and on behalf of the Company may contain 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be identified by words such as 'intends,' 'anticipates,' 'believes,' 'expects' and 'hopes' and include, without limitation, statements regarding the Company's results of exploration, plan of business operations, potential contractual arrangements, receipt of working capital, anticipated revenues and related expenditures. Factors that could cause actual results to differ materially include, among others, those set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009 and other filings with the Securities and Exchange Commission, under the caption 'Risk Factors'. Most of these factors are outside the control of the Company. Investors are cautioned not to put undue reliance on forward-looking statements. Except as otherwise required by applicable securities statutes or regulations, the Company disclaims any intent or obligation to update publicly these forward looking statements, whether as a result of new information, future events or otherwise.
To view Table 1., please visit the following link: http://media3.marketwire.com/docs/uxg0113_table_1.pdf
To view Figure 1, please visit the following link: http://media3.marketwire.com/docs/uxg_0113_fig_1.pdf
To view Figure 2, please visit the following link: http://media3.marketwire.com/docs/uxg_0113_fig_2.pdf
To view Figure 3, please visit the following link: http://media3.marketwire.com/docs/uxg_0113_fig_3.pdf
To view Figure 4, please visit the following link: http://media3.marketwire.com/docs/uxg_0113_fig_4.pdf
Contacts:
US Gold Corporation
Ian J. Ball
Senior Vice-President
(647) 258-0395 or Toll Free: (866) 441-0690
(647) 258-0408 (FAX)
US Gold Corporation
Mailing Address
99 George Street, 3rd Floor
Toronto, ON M5A 2N4
info@usgold.com
www.usgold.com