Sona Resources Clarifies Technical Disclosure
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 04/18/11 -- Sona Resources Corp. (the 'Company' or 'Sona') (TSX VENTURE: SYS)(FRANKFURT: QS7) announces that as a result of a review by the British Columbia Securities Commission, the Company is issuing the following news release to clarify disclosure issues. Investor presentations and management interviews on the Company's website have been removed, pending modification, to comply with National Instrument 43-101 ('NI 43-101').
Clarification regarding preliminary assessment
The PowerPoint presentation dated March 14, 2011, previously posted on the Company's website, outlined the basic assumptions of the Micon International Limited ('Micon') Preliminary Assessment ('PA') base case at 200 tonnes mill throughput per day, dated June 10, 2010 (news releases dated May 18, 2010, and June 22, 2010). The Company based this figure on the available Indicated and Inferred resources at the Blackdome Gold Mine ('Blackdome'), and Inferred resources from the Elizabeth Gold Deposit ('Elizabeth'), as supported by a NI 43-101 Technical Report dated July 22, 2009 (news releases dated June 8, 2009, and Sept. 10, 2009). However, the PowerPoint presentation also contained a table comparing the economic parameters of the Micon PA base case, which used a gold price of $950 per ounce, to a sensitivity of the base case using $1,350 per ounce. The only parameter changed was the price of gold, which was input by the Company into the Micon spreadsheet analysis. The sensitivity analysis was not titled 'Sensitivity' and could be construed as a new or improved economic analysis, which is not the case and should not be interpreted as such. The Company did not intend the $1,350 sensitivity to represent a new economic analysis, and the Company retracts it and the resulting economic parameters.
The March 14, 2011, PowerPoint also projected eight-year estimated revenue and economic parameters based on a $1,350 per ounce gold price and 300 tonnes per day throughput, the upper capacity of the Blackdome Mill. However, NI 43-101 prohibits disclosure of these results, because the analysis assumed additional quantities of resources not outlined in the Company's current resource estimates. The Company retracts the resulting economic parameters.
In the event that the Company receives an increased resource estimate or an updated PA that constitutes a material change in its affairs since the Micon report, it will make a prompt announcement and file a supporting Technical Report, as required by NI 43-101.
Results of the Micon PA
The details of the Micon preliminary assessment base case first announced on May 18, 2010, are reproduced here for clarity. They included the following summary:
'The economic review contemplates underground mining at Blackdome and Elizabeth with a 200 tonne per day mill throughput over an eight-year mine life, to recover 183,600 ounces of gold and 62,500 ounces of silver. Operating cash costs are projected to average $686 per ounce or $208 per tonne milled over the life of the project. Pre-production capital costs at Blackdome and Elizabeth are estimated at $11.4 million and $9.4 million, respectively, with a combined sustaining capital of $9.45 million. The pre-tax cash flow is estimated to be a positive $27 million, and the after-tax cash flow $20 million.'
At US$950 per ounce of gold, US$15 per ounce of silver, and a 1.08 Canadian to U.S. dollar exchange rate, pre-tax net present value (NPV) of $11,459,000 at a 10 percent discount rate, generating an internal rate of return (IRR) of 31 percent. The PA was based predominantly on Inferred resources, and the assumptions for the assessment are further presented in the news release dated May 18, 2010, and in the Technical Report filed on SEDAR.
Cautionary language required for PA
Some prior corporate disclosure of the Micon PA results omitted mandatory cautionary language required by NI 43-101. The Company clarifies that its PA is preliminary in nature; it includes Inferred mineral resources considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves; and that there is no certainty that the preliminary assessment will be realized. Investors are cautioned that any disclosure of the Company's PA should have included this cautionary language and should be interpreted with such language in mind.
Potential exploration targets
The Company made various statements about exploration potential at the Blackdome and Elizabeth properties in its PowerPoint presentation, the corporate fact sheet, and its audio and video presentations previously posted on its website. Statements of potential quantity and grade were not expressed as ranges as required by NI 43-101, did not disclose the basis on which quantities were determined, omitted grade, and did not include required cautionary language. The Company's Qualified Person has reviewed geological and exploration information relevant to estimates of potential. Based on this review, the Company restates the potential mineral deposits targeted by its exploration programs at Elizabeth and Blackdome as follows.
At Blackdome, exploration potential exists in several near-parallel quartz veins, where gold values require follow-up. A target with particularly good potential is the extension of the Giant Vein on the property. The additional work planned over the next two years targets a potential mineral deposit of between 250,000 and 400,000 tonnes, grading between 9.0 and 12.0g Au/t and potentially containing 70,000 to 150,000 ounces of gold.
The Company also wishes to clarify the disclosure of additional potential exploration targets on the Elizabeth Gold Deposit property. The Indicated mineral resource estimate by SRK Consulting (Canada) Inc. ('SRK'), (news release June 8, 2009), does not include results from the 25 additional holes, totalling 3,779 metres, drilled in the summer of 2010, principally into the Southwest Vein on the Elizabeth property. The holes were partly for infill and partly step out, particularly to the southwest over an additional strike length of approximately 100 metres and open to the southwest. The last three holes on a cross-section in a southwesterly direction assayed 109.5g Au/t over a 2.5-metre core length (E10-67); 20g Au/t over 1.0 metre (E04-11a); and 77.9g Au/t over 5.1 metres (E10-69). The three intersections occurred over a vertical interval of approximately 50 metres, centred at a depth of approximately 75 metres. Mineralization at the Elizabeth zones has never been drilled below approximately 200 metres. In the Company's Management opinion, good potential remains on the Southwest Vein, both along strike and at depth.
As well, mineralization on the No. 9 Vein has not been included in the SRK Inferred resource estimate, and to date the Company has done little work in the area and has not verified the gold values cited.
On the Elizabeth property, there are six known northeast-southwesterly trending veins located over 700 metres, drawn at right angles to the southwesterly strike of the veins. The Elizabeth veins occur at approximately 2,300 metres above sea level, dipping approximately 80 to 85 degrees into the mountain, with a slope of approximately 30 degrees, and are mostly covered with talus. In places, the veins are difficult to drill from surface, outcrop is scarce, and their absolute location may be in doubt.
The on-strike and dip extensions of both veins that host known gold mineralization have not been tested and could potentially host additional gold mineralization. The remainder of these veins and the other four known veins have yet to be drill tested.
For the reasons summarized above, the Company's Management is of the opinion that additional potential mineral deposits exist on the Elizabeth property. Future exploration programs will target potential mineral deposits of one to two million tonnes grading 9.0g Au/t to 12.0g Au/t, and potentially containing 260,000 to 770,000 ounces of gold.
Investors are cautioned that the potential quantity and grade of the material over and above the known mineral resources for both the Blackdome and Elizabeth properties are considered to be conceptual in nature; there has been insufficient exploration to define a mineral resource; and it is uncertain whether further exploration will result in the target being delineated as a mineral resource.
Current resource estimates
Current NI 43-101 compliant mineral resources of the Company as estimated by SRK and Micon in Technical Reports are outlined in the following tables.
Blackdome Gold Mine Mineral Inventory
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Contained
Grade Grade Contained silver
Tonnes (g Au/t) (g Ag/t) gold (oz.) (oz.) Source
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Indicated 144,500 11.29 50.01 52,600 232,300 SRK (2010)
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Inferred 90,600 8.79 18.61 25,900 25,900 SRK (200)
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Tailings 298,000 1.47 - 14,145 - Micon
Inferred (2010)
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The Blackdome Mine mineral resource was estimated by SRK using a cut-off
grade of 5.0g Au/t and a minimum width of 2.0 meters (news release dated May
4, 2010). The tailings resource was reported by Micon at a cut-off grade of
0.5g Au/t (news release dated May 5, 2010).
Elizabeth Gold Deposit Mineral Inventory
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Contained
Grade Grade Contained silver
Tonnes (g Au/t) (g Ag/t) gold (oz.) (oz.) Source
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Inferred 523,000 12.26 N/A 206,000 N/A SRK (2009)
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The Elizabeth Gold Deposit mineral resource was estimated by SRK using a
cut-off grade of 5.0g Au/t and a minimum width of 1.5 meters (news release
dated June 8, 2009).
Mineral resources are not mineral reserves and have demonstrated no economic viability. All figures are rounded to reflect the relative accuracy of the estimate. SRK has reported the resources at a cut-off grade of 5.0g Au/t, assuming an underground mining scenario and 100 percent metallurgical recovery.
The content of this news release has been reviewed by John P Thompson, a Qualified Person for the purposes of NI 43-101, with the ability and authority to verify the authenticity and validity of the data.
This news release contains certain forward-looking statements, and such statements involve risks and uncertainties. The results or events predicted may differ materially from actual results or events. Any forward-looking statement speaks only as of the date of this news release. Except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results, or any other occurrence.
Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Sona Resources Corp.
1 (888) 236-5200
1 (604) 684-6678 (FAX)
info@sonaresources.com
www.sonaresources.com
Marston Webb International
Victor Webb/Madlene Olson
Media Inquiries
1 (212) 684-6601
1 (212) 725-4709 (FAX)
marwebint@cs.com