Palmarito Expansion Drilling Continues to Return Good Results Starting at Surface-Growing Open Pit Potential 237.6 gpt Silver Over 12.2 Meters263.2 gpt Silver Over 6.5 Meters
237.6 gpt Silver Over 12.2 Meters
263.2 gpt Silver Over 6.5 Meters
TORONTO, ONTARIO -- (Marketwire) -- 09/08/11 -- US GOLD CORPORATION (NYSE: UXG)(TSX: UXG) is pleased to announce exploration results from its Palmarito deposit, part of the El Gallo complex in Sinaloa State, Mexico, where Phase 1 mining is planned for mid-2012. Drill results continue to show excellent potential for open pit resource growth, in addition to higher silver grades.
Exploration Highlights
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-- Near surface mineralization continues to expand in size and importance:
- 237.6 gpt silver over 12.2 m, including 891.0 gpt silver over 2.0 m-
from surface
- 263.2 gpt silver over 6.5 m, including 500.0 gpt silver over 1.0 m-
from surface
-- Drilling extends mineralization at depth, encountering the highest
grades to date at Palmarito:
- 5,870.0 gpt silver over 0.4 m
-- Drilling to increase the confidence associated with the mineralization
and upgrade inferred resources to the measured and indicated categories
continues to meet expectations:
- 523.1 gpt silver over 2.9 m
- 123.0 gpt silver over 7.0 m
- 102.0 gpt silver over 18.3 m
- 130.0 gpt silver over 12.0 m
-- Testing historic reverse circulation holes with core drilling continues
to return better silver grades, indicating an opportunity to add ounces
in previously defined areas:
- 87.4 gpt silver over 17.0 m (Grade increased by 77% over same
thickness)
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US Gold's exploration team has had considerable success extending the higher grade portions of the near surface resource at Palmarito this year. Through this work, the geological understanding of the mineralization has been greatly improved. Numerous intersections of impressive grades and thicknesses have been encountered, illustrating the potential to increase the size of the open pit resource. With on-going success, US Gold believes Palmarito could become an important contributor of future silver production for the El Gallo complex.
Near Surface Mineralization Continues to Grow
The three most important holes recently drilled at Palmarito were PMX-142, PMX-145 and PMX-130. These holes extended the near surface zone by approximately 25 meters (80 ft) up-dip, at two separate areas of the project (Fig 2). These areas represent just two of several important targets that have been identified for expansion. The targets were not tested previously because a specialized drill was required to access the area. The potential to extend the zone further appears promising and several follow up holes have already been completed.
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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-142 263.2 0.3 6.5 0.0 7.7 0.01 21.3 0.0
Including 500.0 0.5 1.0 0.0 14.6 0.01 3.3 0.0
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PMX-145 237.6 0.2 12.2 0.0 6.9 0.01 40.0 0.0
Including 891.0 0.2 2.0 3.6 26.0 0.01 6.6 11.8
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PMX-130 105.4 - 3.0 0.0 3.1 - 9.8 0.0
And 108.2 0.1 2.6 10.4 3.2 - 8.5 34.1
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PMX-153 82.9 - 7.1 0.0 2.4 - 23.3 0.0
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PMX-133 75.8 - 5.5 40.3 2.2 - 18.0 132.2
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PMX-144 86.0 0.1 6.4 61.6 2.5 - 21.0 202.1
Including 166.0 0.5 1.5 63.1 4.8 0.01 4.9 207.0
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Expanding Resources - Identifying Mineralization at Depth
Holes PMX-118 and 132 successfully intersected mineralization 50 m (165 ft) below the known limits of the zone. PMX-132 intersected the highest silver grades ever recorded at Palmarito in a narrow intercept that returned 5,870 gpt silver over 0.4 meters. This area, located along the west flank of the deposit, has recently been returning multiple intersections with values greater than 1,000 gpt silver, highlighting the potential for higher grade mineralization. Highlights from the area 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-118 128.5 - 5.2 145.8 3.7 - 17.1 478.3
Including 242.0 - 1.6 147.0 7.1 - 5.2 482.3
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PMX-132 5,870.0 1.5 0.4 103.5 171.2 0.04 1.3 339.6
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PMX-089(1) 638.0 0.3 2.9 46.1 18.6 0.01 9.5 151.2
Including 1,745.0 0.4 0.4 47.6 50.9 0.01 1.3 156.2
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PMX-079(2) 458.2 0.1 8.4 28.6 13.4 - 27.6 93.8
Including 1,009.7 0.1 2.3 29.0 29.4 - 7.5 95.1
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PMX-071(3) 184.6 0.3 25.9 0.0 5.4 0.01 85.0 0.0
Including 959.0 0.4 1.8 0.0 28.0 0.01 5.9 0.0
Including 948.0 1.6 1.2 16.6 27.7 0.05 3.9 54.5
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1 Previously Released on June 29th, 2011, 2 Previously Released on May 17th,
2011, 3 Previously Released on April 26th, 2011
Delineation Drilling Confirms Continuity of Resources
Delineation drilling at Palmarito has been successful at confirming the nature of the inferred mineralization, with the majority of holes returning higher than anticipated silver grades. This is expected to have a positive impact on the total mineable ounces in the resource. Delineation drilling is expected to continue throughout the remainder of 2011 in order to continue converting inferred mineralization to the measured and indicated categories and increase the confidence associated with the mineralization. This drilling is required in order to prepare a reserve estimate for the project.
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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-125 123.0 0.3 7.0 84.0 3.6 0.01 23.0 275.6
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PMX-134 84.8 - 6.0 16.0 2.5 - 19.7 52.5
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PMX-138 64.6 0.4 14.1 102.9 1.9 0.01 46.3 337.6
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PMX-140 523.1 0.2 2.9 53.7 15.3 0.01 9.5 176.2
Including 966.2 0.2 1.3 54.5 28.2 0.01 4.3 178.8
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PMX-143 130.0 0.1 12.0 123.1 3.8 - 39.4 403.9
Including 395.0 0.1 1.1 125.3 11.5 - 3.6 411.1
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PMX-149 92.6 - 7.0 10.0 2.7 - 23.0 32.8
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PMX-150 102.0 0.1 18.3 19.8 3.0 - 60.0 65.0
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PMXGT-01 297.7 - 4.2 0.0 8.7 - 13.8 0.0
Including 743.0 - 0.9 2.0 21.7 - 3.0 6.6
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Early Testing Continues to Upgrade Historical Drill Holes
On June 29th, US Gold announced the results of a new core hole that twinned a historic reverse circulation hole based on the belief that the historic grades were understated. The initial hole showed a 49% increase in silver grade. Since then, one additional hole has been received that showed a 77% increase in grade over the same thickness. US Gold has decided to twin the remaining historic holes at Palmarito with core, which will consist of 45 holes totaling 4,000 meters (13,125 ft) of drilling. The final results from this program will be released once all assays have been received and analyzed. Should this upgrading trend continue, US Gold believes it will have a positive impact on the resource size and grade.
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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-123 (New) 87.4 0.1 17.0 33.0 2.5 - 55.8 108.3
Including 323.0 - 1.0 34.6 9.4 - 3.3 113.5
Including 152.8 0.1 5.0 45.0 4.5 - 16.4 147.6
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P13
(Historic) 49.3 0.1 17.0 29.6 1.4 - 55.8 97.1
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Grade
Increase 77%
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PHASE 1 MINING SCHEDULED FOR MID-2012
On August 31st, US Gold announced the approval of Phase 1 development at the El Gallo complex, with mining expected to commence mid-2012. The El Gallo complex includes the El Gallo and Palmarito silver deposits and the Magistral gold deposits, located within a 13 km (8 mile) radius. Phase 1 will focus on the permitted satellite gold deposits at the project and is expected to produce 30,000 ounces of gold per year after initial ramp up. This decision is expected to generate cash flows approximately two years earlier than originally planned. Capital costs are low and the projected cash flow will help fund Phase 2 (including Palmarito), which is forecasted to produce an additional 5 million ounces of silver per year, beginning in 2014.
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 2.3 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 operating in the Americas. Each Minera Andes shareholder would receive 0.45 of a US Gold share for every Minera Andes share held.
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 El Gallo Complex. 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 Table 1 Drill Results: Core Holes Assays, please visit the following link:
http://media3.marketwire.com/docs/Drilluxg.pdf.
To view Figure 1: El Gallo Complex, please visit the following link:
http://media3.marketwire.com/docs/Elgallouxg.pdf.
To view Figure 2: Palmarito Resource, please visit the following link:
http://media3.marketwire.com/docs/palmaritouxg.pdf.
Contacts:
Jenya Mescheryakova
Investor Relations
(647) 258-0395 or Toll Free: (866) 441-0690
(647) 258-0408 (FAX)
US Gold Corporation
99 George Street, 3rd Floor
Toronto, ON M5A 2N4
info@usgold.com