US Gold Corporation: Drilling Around El Gallo Continues to Build on the Open Pit Potential
TORONTO, ONTARIO -- (Marketwire) -- 06/29/11 -- US GOLD CORPORATION (NYSE: UXG)(TSX: UXG) is pleased to announce new drill results from Palmarito and Haciendita, located within hauling distance of the company's El Gallo discovery and planned process facilities, in Sinaloa State, Mexico (Fig. 1). The results highlight the potential to grow the project as it moves through the feasibility stage. Currently 15 drills are operating at and around El Gallo.
Exploration Highlights
Palmarito
-- Mineralization has been extended approximately 300 meters (985 feet)
south, 100 meters (325 feet) west and 45 meters (150 feet) vertically,
with intersections of 124.4 gpt silver over 9.2 meters, 638.0 gpt silver
over 2.9 meters and 93.5 gpt silver over 12.5 meters. All results start
at or near surface.
-- Delineation drilling, designed to upgrade inferred mineralization to the
measured and indicated categories, continues to confirm wide, near
surface intersections of good grade: 106.5 gpt silver, 0.7 gpt gold over
18.8 meters.
-- Testing a historic hole returns better grades and thickness, indicating
an opportunity to potentially add ounces in previously defined areas.
Haciendita
-- Results from this recent discovery have returned additional
encouragement, with gold values being intersected over good thicknesses:
2.1 gpt gold over 28.9 meters and 1.2 gpt gold over 19.7 meters.
Palmarito Expanded in Multiple Directions
(Fig 1, 2 and 3)
The primary objective of US Gold's exploration at Palmarito is to continue expanding the near surface resource by drilling beyond and below the proposed open pit design. The latest results demonstrate the deposit has been extended in multiple directions, including a significant 300 meter (985 feet) step-out to the south (PMX-108), a 100 meter (325 feet) step-out to the west (PMX-095) and an additional 45 meters (150 feet) vertically (PMX-089 and PMX-106). Although infill drilling will be required, the silver mineralization intersected in these holes appears to be the continuation of the known zones and could have important implications for growing the resource. Highlights from the expansion holes 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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PMX-087 82.1 0.4 5.8 6.3 2.4 0.01 19.0 20.7
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PMX-089 638.0 0.3 2.9 46.1 18.6 0.01 9.5 151.5
Including 1,745.0 0.4 0.4 47.6 50.9 0.01 1.3 156.2
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PMX-091 72.3 - 18.0 140.0 2.1 - 59.1 459.3
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PMX-093 124.4 0.1 9.2 0.0 3.6 - 30.2 0.0
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PMX-095 82.2 - 7.4 140.6 2.4 - 24.3 461.3
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PMX-096 119.4 - 5.1 0.0 3.5 - 16.7 0.0
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PMX-106 133.1 0.2 9.4 103.5 3.9 0.01 30.9 339.6
Including 287.8 0.3 1.8 106.8 8.4 0.01 5.9 350.4
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PMX-108 93.5 - 12.4 0.6 2.7 - 40.7 2.0
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PMX-111 74.3 0.1 10.6 47.0 2.2 - 34.8 154.2
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Palmarito - Converting Inferred Mineralization
Three new holes were drilled with the objective of upgrading inferred mineralization to the measured and indicated categories. The results continue to successfully confirm the grade and thickness of this mineralization.
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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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PMX-082 106.5 0.7 18.8 9.2 3.1 0.02 61.7 30.2
Including 800.0 0.5 0.4 15.6 23.2 0.01 1.3 51.2
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PMX-114 71.3 1.4 11.4 16.6 2.1 0.04 37.4 54.5
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PMX-116 135.3 0.1 2.6 58.9 3.9 - 8.5 193.4
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Rethinking Historical Drilling
Palmarito was originally drilled in the mid-1990's. Based on the drilling method (reverse circulation), US Gold believes there is a possibility the silver grades were understated. Earlier this year, drilling to infill and offset these earlier holes consistently returned better grades, helping to confirm this theory. US Gold has now twinned several historic reverse circulation holes, with the results from the first hole having been received. The holes were selected for twinning because they generally fell just outside of the planned pit and upgrading the silver values could help make this mineralization economic. The first hole encountered silver grades approximately 50% higher than the original. In addition, the zone was wider than anticipated. Once results from the remaining holes have been received, US Gold will determine if more twinning is warranted. Results comparing the two holes 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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PMX-113
(New) 89.2 0.2 11.5 43.5 2.6 0.01 37.7 142.7
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P14
(Historic) 60.0 0.2 7.3 42.4 1.8 0.01 24.0 139.1
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Grade
Increase 49%
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Width
Increase 58%
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Currently, three of the fifteen drills located throughout the El Gallo district are working at Palmarito. Drilling to follow up on these results is underway.
Haciendita Exploration Drill Results (Fig. 1)
New drilling has extended the Haciendita discovery to the northeast. In addition, two new zones have been discovered northwest and northeast of the initial drilling. The new results continue to return near surface, gold and silver mineralization over good widths and build upon results released earlier this year. The Haciendita area is comprised of near surface zones that are shallow dipping. It is located 10 km (6 miles) north of El Gallo. Highlights from the recent drilling are shown below.
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Hole # Gold Silver Length From Gold Silver Length From
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(gpt) (gpt) (meters) (meters) (opt) (gpt) (feet) (feet)
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HCX-017 1.0 21.3 12.6 7.4 0.03 0.6 41.3 24.3
Including 3.5 65.0 2.4 17.6 0.10 1.9 7.9 57.7
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HCX-019 1.1 20.9 15.3 21.4 0.03 0.6 50.2 70.2
Including 6.2 29.9 1.2 27.2 0.18 0.9 3.9 89.2
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HCX-027 1.0 34.0 8.0 0.0 0.03 1.0 26.2 0.0
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HCX-030 1.0 11.6 5.2 83.6 0.03 0.33 17.1 274.3
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HCX-033 0.8 65.9 12.5 8.9 0.02 1.9 41.0 29.2
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MGX-019 2.1 9.5 28.9 7.7 0.06 0.3 94.8 25.3
Including 28.6 29.4 1.1 31.3 0.83 0.9 3.6 102.7
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MGX-020 1.2 6.2 19.7 7.8 0.04 0.2 64.6 25.6
Including 8.9 14.3 1.0 23.2 0.26 0.4 3.3 76.1
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ABOUT US GOLD (www.usgold.com)
US Gold's objective is to qualify for inclusion in the S&P 500 by 2015. US Gold explores for gold and silver in the Americas and is advancing its El Gallo Project in Mexico and its Gold Bar Project in Nevada towards production. US Gold's shares are listed on the NYSE and the TSX under the symbol UXG, trading 1.9 million shares daily during the past twelve months. US Gold's shares are included in S&P/TSX and Russell indices and Van Eck's Junior Gold Miners ETF. Rob McEwen, Chairman and CEO, owns 20% of the shares of US Gold. On June 14, 2011 the Company announced that Mr. McEwen proposed to combine the Company with Minera Andes to create a high growth, low-cost, mid-tier silver producer focused on the Americas.
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 to one half of the split drill core is 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 1500 ppm silver or 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 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, 2010 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 the table associated with this release, please visit the following link: http://media3.marketwire.com/docs/uxg0629table.pdf.
To view Figure 1, please visit the following link: http://media3.marketwire.com/docs/uxg0629fig1.pdf.
To view Figure 2, please visit the following link: http://media3.marketwire.com/docs/uxg0629fig2.pdf.
To view Figure 3, please visit the following link: http://media3.marketwire.com/docs/uxg0629fig3.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